Learn how and when to record a refund receipt or a refund check to a customer depending on the situation.

  Important: If the credit card info box says Powered by Stripe, please see Stripe Processing Invoicing, Sales, and Refunds.

Enter and apply a refund

Complete the following steps depending on the type of refund you chose:
Note: If you set up a credit card account for your customer, it will be the default account for the payment method. Make sure the payment method is tagged accurately to avoid a double refund.
  • Type 1 - Refund for goods or services that didn’t satisfy the customer
    Example: A customer already paid for an item and is returning it for a full or partial refund.
    • This option will provide a Refund Receipt to record reimbursements to customers via cash, check (cheque), or credit card.
    • Does not affect the customer balance – Accounts receivable; only the bank balance.
      Note: Make sure a credit note has not been entered yet to avoid a double refund.
      1. Select the Plus icon (+) at the top.
      2. Under Customers, choose Refund Receipt.
      3. Select the same product/service that you are refunding and the exact amount of the refund.
      4. Fill out the necessary fields, then select Save and close.
  • Type 2 - Pay the customer their outstanding credit balance
    Example: A customer has a store credit (overpayment) that they would like to have paid out or redeemed for cash.
    • This option will allow you to provide your customer a refund check/cheque to offset any open credits they would like paid out.
    • Affects the customer balance – Accounts Receivable
  • Type 3 - Refund for a prepaid order the customer hasn't received
    Example: A customer prepaid an order which has been cancelled, and you need to refund the payment.
    • This option is used when a client makes a down payment or prepayment and cancels the order before receiving the goods or services and no invoice or sales receipt was created. The option will lead you directly to entering a check/cheque.
    • Affects the customer balance - Accounts Receivable
  • Type 4 - Refund the customer for paying too much
    Example:  A customer over-paid on an invoice, and you need to return the excess money.
    • This option will allow you to provide a refund when a customer overpays and you want to give the customer's money back (cash or a check/cheque) for the amount overpaid.
    • You may either use the Check/Cheque or Expense features to record the refund.
    • Affects the customer balance - Accounts Receivable

For refund types 2, 3 or 4:

If you have an outstanding transaction, make sure you link the check/cheque or cash purchase to open credit or unapplied payment.

  1. Create a Check/Cheque or Expense
    Note: We are using "expense" transaction in order to both reduce the bank balance (credit) and increase A/R (debit).
    1. Select the Plus icon (+) at the top.
    2. Under Vendors, choose Check/Cheque or Expense.
    3. In the Account column, choose Accounts Receivable.
    4. Enter overpayment amount in the Amount column.
    5. In the Customer column, choose the customer.
    6. Select Save and close.
  2. Pair the Check/Cheque or Expense to a credit or overpayment that you are refunding.
    1. Select the Plus icon (+) at the top.
    2. Under Customers, choose Receive Payment.
    3. Fill out the following fields:
      • Customer
      • Date
      • Payment Method
      • Reference No.
      • Deposit To
      • Memo (Optional)
    4. Select Check/Cheque or Expense that you created.
    5. Select Save and close.