Short version: A lot of AI checkout and fulfillment agents struggle to understand and enforce your refund policies--they're mostly just making educated guesses. The solution? You need to make your refund process machine-readable from start to finish. This means everything from policy markup and attestations to on-chain escrow and agent session controls. With this setup, refunds can be processed automatically, avoiding those pesky chargebacks or unexpected arbitration issues.

Sure! Please provide the long version you'd like me to rewrite.

How to Build Machine-Readable Refund Logic for Autonomous Agents

Your LLM-powered “autonomous checkout” bot gives a thumbs-up for a purchase at 3:02 PM. Fast forward ten days, and the buyer wants to return the item; your operations script has no clue if the product, country, carrier scans, or time frame meet the requirements. Human review gets bogged down, the chance to contest the dispute slips away, and you’re stuck with arbitration fees that weren't even in your budget. On top of that, your AA paymaster is feeling the pinch because your policy caps didn’t kick in during the agent’s session, and a bundler tossed in a tricky UserOp that pushed you over your post-op gas limit.

• When it comes to handling a single card dispute, you’re usually looking at network fees that can hit the mid-hundreds of dollars for every case. Merchants who escalate these disputes unnecessarily end up with losses they could have avoided. Mastercard has started focusing on programs aimed at cutting down on first-party (“friendly”) fraud, especially since escalations are on the rise worldwide. If you don’t nail down eligibility early using machine-readable rules, those avoidable escalations can pile up pretty quickly. (paymentsmastery.com)
• These days, having visible return policies is all about being machine-readable. Google is now insisting on country scoping in the MerchantReturnPolicy structured data; if you skip this step, it might hurt your product visibility and confuse those agents pulling data from your catalog. (searchenginejournal.com)
• The on-chain user experience really took a leap forward in 2025: Ethereum’s Pectra upgrade (launched on May 7, 2025) introduced EIP‑7702. This allows externally owned accounts (EOAs) to temporarily function like smart accounts--so your agents can manage session-scoped permissions and budgets without needing users to switch addresses. If your refund process isn't taking advantage of this (like with batched authorization, sponsor covering gas fees, or policy-limited spending), you might find yourself lagging behind the competition that’s adapting with 4337 + 7702. (blog.ethereum.org)
• Crypto refunds are available in PSP APIs, but they come with some strict limitations (like post-intent timeframes). If your bot isn’t set up to enforce those rules, you could end up manually resolving “unsupported funds.” (developers.circle.com)
• The risk associated with AA/Paymaster is genuine. Reports from January 2026 have pointed out a failure-path edge case in EntryPoint v0.8 that can lead to overcharges for paymasters when postOp goes out of gas (OOG). Even as solutions are rolled out, it's crucial for production paymasters to have clear caps and alerts in place. (github.com)

Here’s the practical approach we’re using at 7Block Labs: we make “refundability” something that can be calculated throughout the entire process--covering policy, evidence, payment, and agent execution--so that autonomous agents aren’t left to make guesses.

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• Who: We’re targeting Marketplace Platform PMs, along with the VP/Director of Ops & Risk, and Engineering Leads at retailers and fintechs that are managing agentic checkouts and returns, handling between 50k to 500k RMAs a month, working with multi-country catalogs, and using both card and crypto payment options.
• Key Terms: Here’s the list of must-know keywords that we’re weaving into our strategy: merchant of record (MoR), RMA automation, reverse logistics SLA, GS1-128/SSCC labels, EDI 856/ASN timing, first-party fraud, Rapid Dispute Resolution (issuer pre-decision), MerchantReturnPolicy JSON-LD with applicableCountry, Verifiable Credentials 2.0, EAS attestations, ERC-4337 UserOperation, EIP-7702 session delegation, paymaster policy caps, EntryPoint AA error codes, carrier scan events (like Delivered/Acceptance Scan), partial refund rules, and representment evidence packages. You can find more details here.

Phase 1 -- Express Refund Policy as Machine-Readable Contracts

• Web policy layer:
  • Share your organization's return logic at both the org and offer levels using MerchantReturnPolicy under Organization.hasMerchantReturnPolicy, along with any per-offer tweaks. Don't forget to include applicableCountry to follow the 2025 guidelines and help agents route based on geography. (developers.google.com)
  • Make sure seasonal windows and restocking fees are easy to find and understand with MerchantReturnPolicySeasonalOverride, including clear start and end dates. (developers.google.com)
• Agent governance layer:
  • Set up constraints just like ODRL policies (think rights and obligations) so agents can navigate through them smoothly: define allowable refund periods, evidence requirements (like photos, RMA scans, or carrier events), and any exceptions. The ODRL community pushed for better semantics and interoperability in 2025--use this to make it clear what's “eligible vs. ineligible,” rather than relying on vague terms. (w3.org)
  • When you need to verify identity (like for reseller eligibility or high-value returns), go for W3C Verifiable Credentials 2.0 for claims that machines can check (think “Authorized Reseller,” “KYC Level Verified,” or “Return Window Exception Granted”). VC 2.0 became a W3C Recommendation on May 15, 2025. (w3.org)

What you get: policy-as-data that any agent can easily understand. Plus, Google and marketplaces can accurately index the right terms for each country, which helps cut down on false approvals and any SEO issues.

Phase 2 -- Making Refunds Part of Payments and Contracts

• On-chain escrow and clear refund rules:
  • When you're aiming to give buyers a solid cryptographic right to refunds within a specific timeframe, check out ERC‑5528 (Refundable Fungible Token) or ERC‑5507 (Refundable Token extension for ERC‑20/721/1155). These standards help streamline escrow, refund, and withdraw operations, cutting down on custom coding. We’re tweaking these frameworks to work with stablecoin systems and real-world asset deposits. (eips.ethereum.org)
• Account abstraction and agent sessions:
  • Let’s merge ERC‑4337 smart accounts with EIP‑7702 to give agents temporary powers: this can mean capping refund amounts, limiting transactions to approved merchants/contracts, or needing certain confirmations when making calls. Pectra’s 7702 lets externally owned accounts (EOAs) delegate to secure smart-account code without changing addresses, and wallets and bundlers are already using 7702/4337 APIs. (blockworks.co)
  • Here are the checklist items we’re putting into action:
    • Paymasters: Set internal limits according to paymasterPostOpGasLimit and keep an eye out for AA50/AA51 scenarios (like postOp reverts or prefunding below cost). You can find the exact errors and monitoring tips in vendor documentation and community discussions. (alchemy.com)
    • EntryPoint reinforcement: Until we’re all on updated EntryPoint versions, add a “post‑op overcharge sentinel” to catch any Out Of Gas (OOG) failure behaviors. Follow Issue #606 and the relevant release notes for updates. (github.com)
    • Bundler APIs: Embrace ERC‑7769 JSON‑RPC so wallets/agents can handle UserOps like first-class citizens (simulating, submitting, tracing) which will help monitor refunds accurately. (eips.ethereum.org)
• Bridging off-chain/on-chain evidence:
  • Utilize the Ethereum Attestation Service (EAS) to back refund evidence like “RMA issued,” “Carrier Delivered,” “Warehouse Received,” or “Defect Confirmed.” We’ve got templates ready so agents and paymasters can ask for proof before releasing funds. EAS is already operational on both mainnet and L2s, with millions of attestations in circulation. (attest.org)
  • For sensitive info like IDs or invoices, issue VC 2.0 credentials and provide selective-disclosure proofs to agents and paymasters--this way, no personal data is on-chain, but we ensure robust machine verifiability. (w3.org)
• Aligning with card networks (let’s cut down on chargebacks):
  • Give agents “representment-ready” evidence so disputes can be resolved early through issuer programs (think first-party fraud detection or compelling-evidence initiatives), instead of dragging out to arbitration. Mastercard’s 2025 plans highlight how better signals (like device, delivery, identity, location) can influence issuer decisions; your refund policy should naturally generate these signals. (mastercard.com)
• Crypto PSP refunds:
  • Make sure your policy windows match up with PSP rules (for instance, Circle only allows crypto refunds within 30 days after intent expiry), or make sure the agent blocks any refunds that can’t be settled automatically. (developers.circle.com)

What you get: refunds that are programmable and can be audited. The agent can handle these refunds all at once--meaning they’ll only release the funds once the policy and evidence both check out as “true.”

Phase 3 -- Wire in Reverse-Logistics Truth (RMA → ASN → Receipt)

Returns really can’t happen without some solid supply-chain proofs in place. Here’s what agents need to keep things running smoothly:

• First up, it's all about EDI 856/ASN timing. Remember, we want to send that info after the carrier has tendered, not while the truck is still being loaded up! Plus, you need to have GS1-128/SSCC scans that are mapped one-to-one with your cartons and pallets. And don't forget about HL hierarchies that actually match the physical packing. This makes sure we don't end up with those “policy eligible but warehouse blind” situations that lead to annoying chargebacks. For more on this, check out Orderful's guide.
• Next, let’s talk about carrier scan events, like Acceptance Scan and Delivered. Staying disciplined with the ASN window is crucial, typically aiming for 2 to 4 hours before receipt. Also, try to avoid those pesky duplicate identifiers (like BSN02 and SSCC). This way, the agent can confidently decide whether it’s time to "refund now" or "wait for inspection." If you want to dive deeper, hop over to the EzCom Software blog.

What you get: the agent can clearly tell you, backed by cryptographic and logistical proof, if you’re due a refund right now, partially, later on, or not at all.

Phase 4 -- Deployable Blueprints (We’ll Ship These with You)

• Pattern A -- “Finite Window + Auto-Refund on Delivery”

  • Policy: We’ve got a set time frame that varies by applicableCountry. Just make sure you snap a photo and get an RMA for your return; the VC 2.0 credential we’re using is “Original Buyer.”
  • Contract: This one’s based on ERC-5528 stablecoin escrow. We’ll release funds or issue a refund depending on the EAS “Delivered + Received” confirmations. If the item is “Opened but resellable,” you can still get a partial refund.
  • Agent: We use 7702 session delegation here to create a minimal account for that first purchase. If you need a refund later, it’ll go through an ERC-4337 UserOp sponsored by a capped paymaster.

• Pattern B -- “Digital License Cooling-Off”

  • Policy: You’ve got a 14-day cooling-off period, and if you request a refund, the license auto-invalidates.
  • Contract: This is set up with an ERC-5507 extension on the license NFT. The refundDeadlineOf tracks deadlines using blocks for reliability. When you get a refund, it burns the NFT and releases the escrow.
  • Agent: We can’t process a refund if the “License used > N sessions,” based on what the on-chain usage attestations show.

• Pattern C -- “Risk-Bounded AI Buyer”

  • Policy: The MoR (Merchant of Record) sets budgets for each agent, maintains a merchant allowlist, and gives a “refund authority up to $X per week.”
  • Contract: For the first purchase, we’re using 7702 for atomic transactions, and then the agent works under 4337 session keys. The paymaster enforces those budget caps and checks for “Refund Eligibility” with EAS before backing a refund UserOp.
  • Monitoring: ERC-7769 endpoints are in play to feed data to dashboards, with alarms set up for AA50/AA51 and any postOp overcharge alerts.

Implementation plan (8-12 weeks to value)

• Week 0-2: Policy ingestion and modeling
  • First things first, let’s transform those T&Cs into a MerchantReturnPolicy and set up the ODRL profile. We’ll publish it as JSON‑LD and make sure to index tests in Search Console. Plus, we’ll keep audit trails handy for Legal to give their thumbs up. (developers.google.com)
• Week 3-6: Contract + agent rail
  • Next up, we’re rolling out escrow/refund contracts using the ERC‑5528 and ERC‑5507 variants, along with EAS schemas and wrapping in the 7702/4337 session integrations. We’ll toughen up the paymaster and add that sweet overcharge sentinel. Don’t forget to link the ERC‑7769 RPC to your observability stack. (eips.ethereum.org)
• Week 7-8: RMA/ASN evidence bridge
  • Now, let’s get into the nitty-gritty! We’ll map WMS/EDI (856/ASN) fields to attestations and whip up some “Delivered/Received/Inspected” proofs. We’ll also reconcile everything with carrier scans and SSCC hierarchies. (boldvan.com)
• Week 9-12: Sandboxes + PSPs
  • Finally, we’ll wire up those enhanced signals from card networks (think device, delivery, identity) to tackle first-party fraud. Let’s map out crypto PSP refund windows and run through five return scenarios for each country. (mastercard.com)

Technical specs we standardize (so agents stop guessing)

• Policy and discovery
  • We’re using JSON‑LD MerchantReturnPolicy for both the organization and the offer, which includes applicableCountry and seasonal overrides.
  • For our ODRL profile, we’ve got actions set for return/refund and constraints on days since delivery, country, and condition. Don’t forget about the duties for evidence artifacts! Check it out here.
• Identity and evidence
  • We’re rolling with VC 2.0 credentials to back up buyer and merchant claims, plus EAS attestations for all the refund milestones. More info can be found here.
• Smart contracts
  • We’ve integrated ERC‑5528/5507 for escrow and refund primitives, alongside 7702 delegation for setting up atomic sessions. We're also using 4337 EntryPoint v0.8+/v0.9 with a hardened paymaster. Dive deeper here.
• Monitoring + safety
  • Our setup includes ERC‑7769 RPC, AAxx error tracking (think AA50/AA51), and a postOp overcharge sentinel with an auto-throttle for suspected bundles. You can find more details here.
• Supply‑chain integration
  • We’re synchronizing EDI 856/ASN timing and mapping GS1‑128/SSCC to cartons and pallets, with carrier scan hooks for a smoother workflow. More info is available here.

Practical example -- “EU physical goods, card + USDC, 30-day window”

• Policy: You've got a solid 30-day window from delivery. If your item is unopened, you get a full refund; if it’s opened, you’ll receive 85%. Just a heads up, for items that are Dead on Arrival (DOA), you can get a full refund within 14 days. This applies to folks in DE, FR, and NL.
• Web: Make sure to publish JSON-LD with a seasonal override for that busy November peak. Agents will pick up on country-specific info when they crawl your site. (developers.google.com)
• Identity: When a Return Merchandise Authorization (RMA) request comes in, issue a VC 2.0 credential noting the “Original Buyer” along with order number, SKU, and timestamp. (w3.org)
• Evidence: You’ll want an EAS attestation chain that goes: “RMA Issued,” “Carrier Acceptance,” “Delivered,” “Warehouse Received,” and “Inspection: unopened/defect code.”
• Contracts:
  • Use USDC escrow via ERC-5528; for the escrowRefund, check the EAS “Inspection: unopened=true.”
  • For partial refunds, calculate 85% in the contract using a policy hash tied to the attestation; handle RWA tax off-chain and post it as an EAS note.
• Agent session: The buyer’s wallet will sign a 7702 delegation for checkout. The marketplace’s agent will then kick off a sponsored 4337 UserOp for the refund once all EAS signals are good to go.
• Dispute off-ramp: If a card dispute pops up, the issuer will receive the device, delivery, and identity signals (logistics + VC + EAS) to help steer clear of arbitration. (mastercard.com)

Emerging Best Practices We Recommend Right Now

• Always include the applicableCountry and clear delivery-based timelines; agents often misunderstand vague "30 days" policies. Check out this article for more details: (searchenginejournal.com).
• It's a good idea to stick with block-based deadlines in contracts (like ERC-5507, which uses block numbers) to avoid any issues with timestamp drift when agents are batching actions. Learn more here: (eips.ethereum.org).
• Think of 7702 as the “first transaction bootstrap,” and then use 4337 session keys for your ongoing automations. This is the route Pectra has opened up for mainstream wallets. Check it out: (blockworks.co).
• Make sure to strengthen your paymasters: limit gas on postOp failure paths, watch for any anomalies, and have an upgrade plan that fits with EntryPoint releases. Don’t forget to keep an eye on open issues like #606. You can find more info here: (github.com).
• Connect RMA → ASN → receipt statuses into attestations; agents shouldn’t go ahead with refunds just because a “label was created.” They should wait for the “Acceptance Scan” or the facility receipt as proof. More details available at: (help.orderful.com).

GTM Metrics -- Show It Off in Your Dashboard

• Time-to-Refund (TTR) P50/P95 by country and SKU class.
• Share of “Agent-Autonomous Refunds” vs. Manual; we’re aiming for over 70% within 90 days while keeping leakage in check.
• Chargebacks as a % of Refunds; we should see a noticeable drop after integrating issuer signals (think delivery, device, identity). (mastercard.com)
• Keep an eye on the Arbitration Rate and the average cost avoided through arbitration (you can track this via issuer outcomes and the finance ledger). (chargebackstop.com)
• Paymaster Loss Ratio: Compare sponsored refund gas against the budget cap; we want to hit zero over-cap events post-sentinel deployment.
• ASN Compliance Rate (watch out for duplicate SSCCs and BSN02 collisions) and look at refund delays linked to ASN mismatches. (boldvan.com)

Where 7Block Labs Fits (And What You Can Click Into Now)

• Looking for seamless policy-to-contract execution with deliverables that your CFO will actually sign off on? Our team has got your back with production systems that agents can use safely.
  • Check out our custom blockchain development services for everything from escrow and refund contracts to AA integrations.
  • If you're kicking off from web policy, our web3 development services team can help you roll out compliant JSON‑LD and ODRL profiles, all set up to connect with your catalog and returns portal.
  • Concerned about paymasters and the tricky bits of EntryPoint? Our security audit services cover AA/7702 hardening and provide live runbooks for ERC‑7769 telemetry.
  • Need to stitch together PSPs, EDI, and attestations? Our blockchain integration practice is here to help you connect WMS/EDI 856/ASN, carrier scans, PSP refund APIs, EAS, and VC wallets.

Closing thought:

Refund logic isn't just a dry paragraph hidden in your T&Cs anymore; it's now a full-on machine interface that your agents, wallets, issuers, and smart contracts will be bouncing off in milliseconds. If you don’t make it computable, someone else will--and it’s usually going to be your acquirer or a fraudster.

Personalized CTA:

Hey there! If you’re the VP of Ops or the Platform PM working at a marketplace processing over 50k RMAs a month in at least three different countries, and you’ve got the challenge of cutting chargebacks by 25% while shifting 60% of refunds to autonomous execution by Q3 2026, then we’ve got something special for you. Just reply with “Refund‑Agents,” and we’ll kick off a 10-day Policy-to-Contract sprint.

We’ll set you up with a live MerchantReturnPolicy, an ODRL profile, a complete EAS schema set, and a 7702/4337 refund pilot connected to your sandbox. In just two weeks, we’ll demonstrate the TTR and the arbitration-avoidance deltas on real orders to your CFO. And if we can’t deliver, we’ll clear out your backlog with our custom blockchain development services and blockchain integration team. Let’s get started!