QuickBooks Credit Card Refund: How to Enter and Process Credit Card Refund in QuickBooks Online & Desktop?

If you use QuickBooks Payments then you can enter and process the credit card payments for your customers. By doing so, you can keep your accounting accurate. Whether you want to enter or process the credit card refund in QuickBooks Online or Desktop, here we will show you the detailed procedure of QuickBooks credit card refund.

In this guide, we will teach you to enter, process, record the credit card refund in QuickBooks and categorize credit card refunds from the vendor.

How to Do a Credit Card Refund in QuickBooks Online?

In QuickBooks Online, there are a few methods you can give a refund to your customer. For instance, you can refund the credit card payments for a sales receipt and a paid invoice. If needed, you can give a partial payment as well.

Before proceeding with the QuickBooks credit card refund procedure, there a few requirements you should be aware of:

• The credit card refund can go back to the original card online that was used to purchase items. You may also require to contact your customer for the details.
• You can issue the credit card refund only within 180 days of a sale.
• The refund can be up to the amount of the original sale but cannot refund more than that.

To refund credit card payment in QuickBooks Online, you can perform the following steps:

Credit Card Refund for the Sales Receipt

Those who want to refund for the sales receipt in QuickBooks Online can create a refund receipt, choose the customer, pick the payment method, and save the details. To initiate the refund to a bank or credit card, you can pursue the following steps:

• Click on the “+New” button.
• Go to the “Refund Receipt”.
• Using the “Customer” dropdown, pick a customer whom you want to refund.
• Add the required details. Make sure you add the same details from the original sale.
• If you want to credit back the credit card, then select the “Credit Card” option in the “Payment method”. But, if you want to credit back to the bank account then select the “bank” option in the “Payment method”.
• From the “Refund from” section, select your payment method and the account you want to refund your customer from.
• Then, click on the “Save and Close” button.

As you follow these steps, your refund for the sales receipt will be sent to the customer by then, If required, you can take a print of the refund receipt. All you have to click on the Print button.

Credit Card Refund for the Paid Invoice

If the invoices are already paid by the customer, you can initiate the refund by creating the refund receipt. Then, select your customer, enter the required details, select the payment method, and save the details.

Here are the detailed steps:

• Click on the “+New” button.
• Select the “Refund Receipt”.
• Using the “Customer” dropdown, pick a customer whom you want to refund.
• Add the required details. Make sure you add the same details from the original sale.
• From the “Refund from” section, select your payment method and the account you want to refund your customer from.
• Then, click on the “Save and Close” button.

This is how you can initiate refunds for the invoices that are already paid. If required, you can print the refund receipt. All you have to click on the Print button.

Send a Partial Refund

It could also happen when you are supposed to send only a partial refund to your customers. In such cases, you can create a new refund receipt, select the concerned customer from the list, enter the required details, and send the partial refund.

• Click on the “+New” button.
• Then, choose the “Refund Receipt”.
• Select your customer using the “Customer” dropdown.
• Add the required details. Make sure you add the same details from the original sale.

Note: If you are giving the partial refund then you should only add the amount or the items that you wish to refund.

• Then, click on the “Save and Close” button.

After following these steps, your refund will be shared with your customer. Remember that for the partial refund, you don’t add all the items. Make sure you only the items and amounts that are supposed to be refunded. You can print the refund receipt if needed. All you have to click on the Print button.

How to Enter a Credit Card Refund in QuickBooks Desktop?

QuickBooks Desktop users can also refund the checks or cash payment back to the credit card of your customer. Even if you refund a credit card then QuickBooks Payments takes care of the whole procedure.

The process of refunding the partial amount or the whole amount for specific services and products is easy. But, you are required to be aware of the following requirements:

• Users should use the same Company Auth ID/Merchant Account that you used for an original transaction.
• Make sure you issue the refund of the original transaction within six months.
• You can refund the amount not more than the amount processed on the credit card.
• Also, you can refund the credit card that was used for the original sale.

Now, you can follow the procedure of QuickBooks refund credit card payment in QuickBooks Desktop:

• Log in to the “QuickBooks Payments” from your “QuickBooks Desktop” account.
• Go to the “Customers” menu.
• Then, click on the “Credit Memos/Refunds” option.
• Add the customer to whom you want to refund. For this, you can use the “Customer:Job” drop-down menu.
• Now, add the products and services that you wish to refund.
• Click on the “Save & Close” button. This will open the “Available Credit” window.
• Click on the “Give a refund” option.
• Hit the “OK” button.
• If you wish to give credit for future payments, click on the “Retain as an available credit” option.
• Then, hit the “OK” button.
• When you see the “Issue a Refund” window, you can decide how you wish to refund the transaction using the “Issue this refund via” field. In case you choose “Check” or “Cash”, click on the account for which you are paying the refund form.
• For credit card payments, you can enter the following details:
  • Go to the “Issue this refund via” field, click on the type of credit card that you wish to refund.
  • Add your credit card details. Or, you can click on the “Swipe card” option and swipe the card of your customer.
  • Now, click on the “Process credit card refund” checkbox.
• Click on the “OK” button.

As you follow these steps, your QuickBooks starts processing the refund and handles the whole accounting process.

When Do Customers Receive Their Refunds?

A lot of users must be wondering how long it takes for your customers to receive money back to the bank. Well, it may take around 7-10 business days.

QuickBooks applies refunds and credits to the customer’s debit or credit card only when it settles the latest transaction batch at 3:00 PM each day. However, it depends on the bank when a customer sees the credit. The industry standard time can be between 7 to 10 days.

Special Tip: If you are facing issues sending refunds to the customers in QuickBooks then you can try voiding them. Especially if the transaction has not been settled then you should void the refund. All you have to do is go to the Customer Center menu, open the profile of your customer, open the credit card refund, click on the View Refund receipt, and select the Void Refund option.

How to Categorize the Credit Card Refund from Vendor?

If you have received a credit card refund from the vendor then you can categorize and add them to the ledger. All you have to create a vendor credit and apply the vendor credits to the bill. Let’s follow the procedure of QuickBooks credit card refund from vendor.

Create the Vendor Credit

To categorize the credit card refund from the vendor, first, you will have to create the vendor credit so that you can apply it to the bill. Make sure you enter the item and category details correctly.

• Click on the “+New” button.
• Then, click on the “Vendor Credit” option.
• Pick your vendor using the “Vendor” drop-down menu.
• Now, decide how you want to record the purchases with your vendor, enter the “Item details” or “Category details”. Generally, this can be the category, service, or product you are getting credits for.
• Hit the “Save and close” button.

Apply Vendor Credits to the Bill

After creating the vendor credit, you can apply this to the future or open bill. To do so, you have to choose the Pay Bills option, select the bill for the vendor, and enter the required fields.

• Click on the “+New” button.
• Then, click on the “Pay Bills” option.
• Here, select your bill for the vendor from the list. In the “Credit Applied” field, you will see the available credit with the vendor.
• Now, enter the remaining fields.

This way you can easily create and apply the credit card refund from the vendor in QuickBooks.

How to Process a Credit Card Refund in QuickBooks Online?

Once you create the credit card refund, you can process it in your QuickBooks Online. All you have to do is go to the Refund Receipt, add the name of your client, choose the credit card type, and add the necessary details.

• Click on the “Plus” icon.
• Then, go to the “Refund Receipt”.
• Now, enter the name of the client in the “Customer” field.
• Here, choose the type of credit card that your customer used.
• Also, make sure that the “Process Credit Card” option is checked.
• Choose the same service/product and the refund amount.
• Add the required details.
• Hit the “Save and close” button.

After you save the information, your credit card refund will be processed for the concerned customer.

How to Record Credit Card Refund in QuickBooks?

If you want to record the credit card refund or a refund to the customer then you can do that easily. Before you start, make sure you create the credit memo. Thereafter, you can write a check with the refund amount. Later, you can link your credit memo to the check so that it does not open credit memos and the refund checks that are unapplied.

Create the Credit Memo

• Click on the “Customers” menu.
• Then, click on the “Create a Credit Memo” option.
• Choose the name of the “Customer:Job” option.
• Add the details for the credit memo.
• Hit the “Save and Close” button.

Write Checks with Total Amount of Refund

• Click on the “Banking” option.
• Then, go to the “Write Checks” option.
• Now, select the “Bank account” where you want to post the check.
• In the “Pay to the Order of” field, add the name of your customer.
• Enter the total amount of credit or refund.
• Then, add the “Credit Memo numbers” in the “Memo” section.
• Now, switch to the “Expenses” tab.
• From the “Account” column, select the “Accounts Receivable” option.
• Add the customer’s name and the amount of your refund.
• Hit the “Save and Close” button.

Link Credit Memo to Your Check

• Click on the “Customer” menu.
• Then, select the “Receive Payments” option.
• Click on the “Customer” using the “Received from” drop-down menu.
• Then, select the “Discounts and Credits” option.
• From the “Available Credits” section, select the check you have created.
• Hit the “Done” button.
• Click on the “Save and Close” button.

This is how you can record the credit card refunds in your QuickBooks account. All you have to create the credit memo, write a check with the refund amount, and link your credit memo.

To Wind Up

The QuickBooks credit card refund procedure is easy. Whether you use QuickBooks Online or QuickBooks Desktop, you can perform different steps to refund the credit card. For instance, in QuickBooks Online, you can do a credit card refund for a sales receipt, paid invoices, and partial refund.

Even if you receive a credit card refund from the vendor, you can categorize them too. Here, we have shown the whole procedure of QuickBooks credit card refund. If you have any questions, let us know in the comment section.
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