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Payments

Refund

Returning money already captured, as opposed to reducing an outstanding balance with a credit note.

A refund returns funds that were captured. It reverses the money movement; a credit note reverses the obligation. A full correction usually needs both.

Refunds settle on the rails they came in on and take days, which is a support expectation to set rather than a technical problem to solve. Partial refunds need the same tax treatment as the original line, or the tax reporting will not reconcile.

A refund issued promptly is also the cheapest defence against a chargeback, which costs a fee and counts against you regardless of who was right.

Related terms

  • Credit note A document that reduces or cancels an amount previously invoiced, used for refunds, corrections and downgrades.
  • Chargeback A cardholder disputing a charge with their bank, reversing the payment and adding a fee regardless of the outcome.
  • Settlement and payout Funds moving from the card networks to your bank account, usually in batches and net of fees.