(Philippine legal context)

1) The core idea: the refund obligation normally belongs to the seller/business, not the rank-and-file employee

In most consumer transactions, the party that must return the money is the party that received the payment as a matter of law—usually the business entity (or proprietor) that sold the goods/services. When an employee merely collects payment or interacts with customers as part of the job, the employee is generally treated as an agent or representative of the employer. As a rule, an agent who acts within authority and in the name of a disclosed principal does not become personally liable on the contract; the obligation binds the principal (the employer/business).

So, when the employer received the money (directly or through the employee acting for the business), the customer’s refund claim is ordinarily against the employer—the merchant, service provider, proprietor, partnership, or corporation.

That said, employees can still face personal liability in specific situations—especially where the employee steps outside authority, makes a personal undertaking, commits a wrongful act, or misappropriates funds.

2) Typical real-world setups (and why the answer changes)

Refund disputes come in different “shapes,” and liability depends heavily on which of these fits the facts:

A. Employee collected as cashier/collector and remitted to the business

Normal outcome: refund duty is the employer’s.
Employee is a conduit/agent; the business is the contracting party.

B. Customer paid via company channels (bank transfer to company account, official online payment gateway, POS tied to company)

Normal outcome: employer is plainly the recipient; refund duty is the employer’s.
Employee usually has no personal exposure unless there’s fraud or a separate personal promise.

C. Customer paid “to the employee” (GCash/personal bank account) allegedly “for the company”

High-risk scenario: customers may demand refund from both, because it’s unclear who truly received the money.
If the employee used personal accounts without authorization, or kept the funds, personal civil/criminal exposure becomes more likely.

D. Employee issued unofficial receipts, altered invoices, or took side payments

Employee exposure increases (possible estafa, civil liability, termination for cause).
Employer liability depends on whether the customer reasonably believed the employee was authorized (apparent authority), and whether the employer benefited.

E. Employee personally promised “I’ll refund you” / signed a refund undertaking personally

Personal liability becomes plausible because the employee may have created an independent obligation (a personal promise or guarantee), separate from the employer’s contractual duty.

3) The legal frameworks that usually control refund liability

3.1 Contracts and obligations (Civil Code): who is the “debtor” for a refund?

Refunds typically arise from:

Rescission/cancellation of a contract,
Breach (non-delivery, defective performance),
Warranties in a sale, or
Payment without valid cause (e.g., double payment, mistaken payment).

In these situations, the party bound to return money is usually the seller/service provider—the business—because the customer’s contract is with the business, not the employee.

3.2 Agency (Civil Code): the employee as agent

Employees dealing with customers are commonly treated as agents of the employer. The key consequences:

If the employee acts within authority and in the name of the employer (disclosed principal), the employer is bound, not the employee.
If the employee exceeds authority or acts without authority, the employee can be personally liable unless the employer ratifies the act.
If the employee contracts in his/her own name or creates the appearance that the employee is the seller, the customer may pursue the employee as contracting party—especially if the business identity was not properly disclosed.

Practical translation:

If official receipts, invoices, chats, booking confirmations, and store signage clearly show the business as the seller, personal liability for the employee is less likely.
If the paperwork/messages make it look like the employee personally sold the item/service, personal liability risk increases.

3.3 Consumer protection (Philippine context): refunds are part of merchant accountability

Philippine consumer protection principles generally place the burden on the merchant/service provider to address defects, nonconformity, deceptive practices, and certain cancellation scenarios. Refunds can be ordered through administrative processes (often involving trade/consumer authorities) or through civil claims.

Even when a customer’s main complaint is triggered by an employee interaction (rude refusal, misinformation, mishandling), the business remains the primary accountable party for the customer transaction—because consumer remedies are typically directed at the seller/provider.

3.4 Quasi-delicts/torts (Civil Code): personal liability for wrongful acts

Even if the contract is with the employer, an employee may be personally liable for a separate wrongful act (fault/negligence) that causes damage to the customer—e.g.,

fraudulent misrepresentation,
negligent handling that destroys customer property,
defamatory statements,
intentional interference or harassment.

In such cases, the employer may also be liable under vicarious liability rules for acts of employees done in the service of the employer, but that does not necessarily erase the employee’s own liability. The employer who pays may later seek reimbursement from the employee if the employee was actually at fault.

3.5 Criminal exposure: when a refund dispute becomes estafa (or related offenses)

Most refund disputes are civil/consumer in nature. But they can cross into criminal territory when there is:

Deceit at the time of taking the money (false pretenses, fake authority, fake product/service), and/or
Misappropriation/abuse of trust (money received for a purpose but diverted).

Employee criminal exposure becomes more likely when the employee:

pockets collections,
uses personal accounts to receive “company payments” and keeps them,
issues fake receipts,
sells nonexistent inventory,
manipulates refunds.

Criminal liability is fact-specific; “the employer received the money” generally points away from employee misappropriation—but not always (because employers can receive money while an employee simultaneously commits fraud, or vice versa).

4) When an employee can be personally liable (the main exceptions)

Exception 1: The employee made a personal undertaking (guarantee/refund promise)

If an employee says (and the evidence supports), “I will personally refund you” or signs a document where the employee personally binds themself, that can create an independent obligation. Courts look at:

the wording used (“I promise,” “I will pay,” “I guarantee”),
whether the employee signed without indicating representative capacity,
whether the promise was part of a settlement supported by consideration (e.g., customer agrees not to file a complaint).

Risk-control tip: employees should avoid personal promises; use “on behalf of [Company]” and refer formal refund requests to authorized channels.

Exception 2: The employee acted without authority / exceeded authority

If the employee approved a refund or accepted payment in a way clearly outside policy and without authority—especially if the business disowns the act—customers may attempt to hold the employee liable. Whether that succeeds depends on:

whether the customer reasonably believed the employee had authority (apparent authority),
whether the employer benefited or later ratified the transaction,
how the employee represented their role.

Exception 3: The employee received the money personally (especially via personal accounts)

If payment went into an employee’s personal wallet/account, a customer can plausibly claim the employee is the recipient and must return it—unless the employee proves it was remitted and truly received by the employer as principal.

Even if the employer ultimately got the money, using personal channels can create confusion and risk, and it can violate company controls.

Exception 4: Fraud, misrepresentation, or bad faith conduct by the employee

Where the employee’s own wrongful act caused the customer’s loss, personal exposure may follow—civilly (damages) and sometimes criminally.

Exception 5: The employee is not just an employee (e.g., owner, partner, corporate officer acting in bad faith)

A different analysis applies if the “employee” is actually:

a sole proprietor (personally liable),
a partner (liability depends on partnership rules), or
a corporate officer who actively participated in wrongful acts or acted in bad faith/gross negligence.

This is where customers sometimes sue “everyone”—the corporation plus certain individuals. Personal liability is not automatic, but it becomes more plausible if the individual’s conduct is central to the wrong.

5) When an employee is not personally liable (the common rule in plain language)

An employee is usually not personally liable for a customer refund demand when all of the following are true:

The business was clearly disclosed as the seller/provider (store name, official invoice/receipt, booking record).
The employee acted within job duties and authority (cashier, sales associate, CSR following policy).
The customer’s payment was made to the business (or collected for and remitted to the business).
There was no personal promise/guarantee by the employee.
There was no fraud, misappropriation, or independent wrongful act by the employee.

In that setup, the employee is a representative; the employer is the proper party to refund.

6) Procedural reality: customers may still demand from the employee (and what that means legally)

Even if the law points to the employer, customers often demand refunds from whoever is “in front of them”—the cashier, the delivery rider, the branch staff, the chat support rep.

A customer demand is not the same as legal liability. But employees can be pressured, threatened with complaints, or dragged into disputes. The correct legal and risk response is:

Escalate to management/authorized refund channels.
Document everything (proof of payment, receipts, policies shown, timeline, messages).
Avoid personal admissions like “I owe you” or “I’ll pay you” unless authorized and true.

7) Employer vs employee internally: can the employer charge the employee for the refund?

Even if the employer is liable to the customer, an employer might try to make the employee “pay it back” internally. In Philippine labor law practice, that is constrained.

7.1 Wage deductions are regulated

As a general rule, employers cannot freely deduct from wages for “losses” or “refunds” unless allowed by law/regulations, or with proper basis and due process, and often with employee authorization where required. Employers must also observe procedural due process before imposing liability/discipline.

7.2 Employee liability to employer usually requires fault (and proof)

Employers may pursue employees for losses caused by:

willful breach of trust,
dishonesty,
gross negligence,
policy violations causing damage.

But “business losses” or ordinary customer refunds due to product defects or company service failures typically should not be shifted to employees absent clear employee fault.

8) How liability is determined in disputes: the evidence checklist

In refund conflicts, decision-makers often look for these:

A. Identity of the contracting party

Official receipts/invoices
Store signage/branding
Order confirmation and terms
Email domain / verified business accounts
Whether the customer knew they were dealing with the business, not the individual

B. Payment trail

To whom payment was made (account name, merchant name)
Whether funds were remitted to the employer
Whether the employee personally benefited

C. Authority and representations

Job title and role
Scripts/policies shown to customer
Whether employee said “I’m authorized” or “I own this”
Any written or recorded “personal promise”

D. The cause of the refund demand

Non-delivery or defective goods
Cancellation terms
Misrepresentation
Processing errors (double charge)
Delays and service failures

E. Conduct (good faith vs bad faith)

Were there deceptive statements?
Was there concealment?
Were there attempts to fix/replace/refund through proper channels?

9) Common scenarios and likely outcomes

Scenario 1: Branch cashier collected payment, issued official receipt, customer cancels and wants refund

Likely liable: employer (merchant).
Employee: not personally liable; should refer to refund process.

Scenario 2: Customer paid to company account, but employee refuses refund and says “company won’t refund”

Liability for refund: employer (if refund is legally due).
Employee: could create exposure only if the refusal involved an independent wrong (e.g., abusive conduct), but refund obligation remains with employer.

Scenario 3: Employee collected to personal GCash “for faster processing,” employer later got the money

Customer may sue both because payment routing suggests employee receipt/participation.
Employee can reduce risk by proving remittance and authorized arrangement; still a risky practice.

Scenario 4: Employee promised in chat: “If you cancel, I’ll personally refund you tonight.”

Employee liability risk: high (personal undertaking).
Employer may also be liable depending on authority/ratification and consumer protections.

Scenario 5: Employee kept the money, employer never received it

Employee exposure: high (civil + potential criminal).
Employer may still face consumer complaints depending on apparent authority and the customer’s reasonable reliance.

10) Best practices for businesses (and protection for employees)

For businesses

Make the seller identity unmistakable (receipts, invoices, online pages, terms).
Centralize refund approvals and document them.
Prohibit personal-account collections; enforce compliance.
Train staff on scripts: “Refunds are processed by the company through [process].”
Keep audit trails: cash count sheets, remittance logs, reference numbers.

For employees

Always communicate in representative capacity:
- “On behalf of [Company]…”
- Sign as “For and on behalf of [Company], [Name], [Position].”
Never accept customer payments to personal accounts.
Never make personal guarantees or “I will pay you” promises.
Keep records: screenshots, receipts, incident reports, supervisor instructions.

11) What customers can do (and why it usually targets the employer)

In the Philippine setting, customers commonly pursue refunds by:

demanding refund directly from the merchant,
filing a complaint with appropriate consumer/industry regulators (depending on product/service),
filing a civil case (including small claims when applicable),
barangay conciliation for certain disputes when required.

These routes typically focus on the business as the party responsible for consumer compliance and contractual performance.

12) Practical bottom line

If the employer received the money and the employee acted only as an authorized representative, the employee is usually not personally liable for the refund. The claim should run against the employer/business as the contracting party and recipient.

An employee becomes personally exposed mainly when the employee (1) personally received/kept the money, (2) acted without authority, (3) made a personal refund promise/guarantee, or (4) committed fraud or another independent wrongful act.

General information notice

This article is for general educational purposes and is not legal advice. If you have a specific fact pattern (e.g., payment channel, who signed what, what was promised, and what documents exist), the legal outcome can change materially.