A customer asks:

I’ve read that merchant accounts can be frozen for too many refunds.
Is this true? Is there a particular type of merchant account that
could work for this?

This customer is getting chargebacks and refunds mixed up.  It is possible to get into trouble (such as having a reserve placed on your account) for having too many refunds, but that is rare and requires a very high percentage of refunds (>5% of your dollar volume).  Much more common is getting in trouble for having too many chargebacks.

A chargeback is when a customer sees a charge on his bill and disputes it.  A refund is when the merchant initiates a refund to the customer.