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LLDsystem_design~12 mins

Cancellation and refund policy in LLD - Architecture Diagram

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System Overview - Cancellation and refund policy

This system manages user requests to cancel orders and process refunds. It ensures that cancellations follow policy rules and refunds are issued correctly and securely.

Key requirements include validating cancellation eligibility, updating order status, calculating refund amounts, and notifying users.

Architecture Diagram
User
  |
  v
Load Balancer
  |
  v
API Gateway
  |
  v
Cancellation Service <--> Refund Service
      |                      |
      v                      v
  Order Database          Payment Gateway
      |
      v
  Cache (for order status)
Components
User
client
Initiates cancellation and refund requests
Load Balancer
load_balancer
Distributes incoming requests evenly to API Gateway instances
API Gateway
api_gateway
Routes requests to appropriate services and handles authentication
Cancellation Service
service
Validates cancellation policy, updates order status
Refund Service
service
Calculates refund amount and interacts with payment gateway
Order Database
database
Stores order details and status
Cache
cache
Stores frequently accessed order status for quick reads
Payment Gateway
external_service
Processes refund transactions securely
Request Flow - 12 Hops
User → Load Balancer
Load Balancer → API Gateway
API Gateway → Cancellation Service
Cancellation Service → Cache
Cache → Cancellation Service
Cancellation Service → Order Database
Cancellation Service → Cache
Cancellation Service → Refund Service
Refund Service → Payment Gateway
Payment Gateway → Refund Service
Refund Service → API Gateway
API Gateway → User
Failure Scenario
Component Fails:Order Database
Impact:New cancellations cannot update order status; refunds cannot be processed reliably
Mitigation:Use database replication for failover; allow reads from cache but block writes until DB recovers
Architecture Quiz - 3 Questions
Test your understanding
Which component checks if an order can be cancelled according to policy?
ALoad Balancer
BPayment Gateway
CCancellation Service
DCache
Design Principle
This architecture separates concerns by using dedicated services for cancellation validation and refund processing. It uses caching to speed up order status reads and relies on a payment gateway for secure refund transactions. Load balancing and API gateway ensure scalability and security.