Usually, this happens in case the cardholder's account is incapable of accepting the refund.
The most common reasons for refund getting declined are:
Refunds are not supported by the card account (certain prepaid cards, etc.)
The card account was frozen* due to fraud
The cardholder closed the card account
The cardholder has already disputed the transaction
*Might be initiated by both the cardholder and the bank itself
We recommend that the cardholder contact the issuer to resolve the situation.