Yes, you can usually issue a refund to a credit card that has been canceled. The cancellation of a card only prevents new charges from being approved; it does not typically prevent refunds for previous transactions from being processed.
The ability to refund a canceled card, however, ultimately depends on the decision of your payment gateway and the card issuer. In most cases, the card issuer is able to successfully route the refunded amount to the customer's bank account without issue.
If you encounter any problems when attempting to refund a canceled card, we recommend reaching out to your payment gateway directly for assistance.
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