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Mike_ASG
Level 2

Credit Card Refund Where Payment was Already Settled

I had a customer pay an invoice in August with a credit card. In September we also received a check for the same invoice. The customer wanted me to refund the card and use the check to pay the invoice, so I issued the refund through my cc processor (square) and used the check as payment.

 

In Quickbooks I issued a credit card refund via the card for the full amount to undeposited funds. The problem is matching this to my bank feed. The amount pulled from my checking is minus the credit cards fees, but when I try to make a "negative deposit" of the refund I can't remove the fees from the deposit (I get the error can't make a negative deposit). If the fees aren't included I have no problem making the negative deposit, but it no longer matches the bank feed.

 

I can't seem to find a solution to this anywhere.

TYIA

Solved
Best answer February 25, 2022

Best Answers
Mike_ASG
Level 2

Credit Card Refund Where Payment was Already Settled

Thank you, I figured it out! The account on line 1 needed to be Accounts Receivable not my bank. Oh my god what a relief!

I just needed to issue the refund with the second payment and go back and edit the check in the register to include the square fees, because the credit card refund wizard doesn't allow for multiple line items.

View solution in original post

16 Comments 16
ShiellaGraceA
QuickBooks Team

Credit Card Refund Where Payment was Already Settled

Welcome to Community, @Mike_ASG.

 

Let me help get your fees matched. You can use the Add More Details feature in the Bank Feed Center. This way, you can add the fees. 

 

Here's how:

 

  1. Go to Banking, Bank Feeds, and then Bank Feed Center.
  2. Select the bank account that has your refund transaction.
  3. Mark the transaction and then choose Add More Details from the drop-down.
  4. In the From Account drop-down, pick your fees account. Enter all the deposit details to match with QuickBooks.
  5. Click Add to QuickBooks.

 

 

 

 

 

 

 

Refer to these handy articles for more information about the process:

 

 

When you're ready, you can proceed with reconciling your bank or credit card accounts.

 

I'll be here if you still have questions or concerns with matching transactions. Drop them below and I'm more than happy to answer them for you. Take care and have a wonderful rest of the week.

 

 

 

 

Mike_ASG
Level 2

Credit Card Refund Where Payment was Already Settled

Thank you, but you're showing how to subtract fees from a deposit which is not what I need to do.

I have the refund check that comes out of my account to my customer, but it does not match the total refunded because the credit card processor refunds the fees.

Sorry, I don't know if I'm explaining this correctly. 

AlexV
QuickBooks Team

Credit Card Refund Where Payment was Already Settled

Hello 34602662!


Thanks for the reply. Let me assist you in recording a refund on QuickBooks Desktop.


The best option I can suggest is to record a refund receipt affecting the bank account where you deposited the payment or enter a credit card charge affecting the accounts receivable account. Then, we can link the deposit or the payment from the customer to the credit card charge 


Go to the Customers menu and select Create Credit Memos/Refunds to create a refund. Make sure to select the bank and not the Undeposited Funds account.


Here are the steps to create a credit card charge:

  1. Select Enter Credit Card Charges or Write Checks from the Banking tab.
  2. Choose Accounts Receivable from the Expenses column.
  3. You can also add the fees.
  4. Enter the amount and add the customer's name under the Name column.
  5. Click on Save and Close.

 

Once done, open the deposit/payment transaction. Unlink it to the invoice and select the check/credit card charge. This way, the invoice will reopen again and you can record a new payment against it. 


Please check this article for more details on how to handle credits and refunds: Give your customer a credit or refund in QuickBooks Desktop for Windows.


Don't hesitate to post again if you have more questions. Take care!

Mike_ASG
Level 2

Credit Card Refund Where Payment was Already Settled

Thanks for your response. Let me see if I can explain more clearly.

 

The amount of the refund the customer receives does not equal the amount that comes out of my bank feed.

My credit card processor covers the credit card fees that were refunded.

 

I need to know how to match up the refund in my account to the amount in the bank feed. Effectively reducing the amount paid in processing fees.

 

I hope you can help.

JessT
Moderator

Credit Card Refund Where Payment was Already Settled

Hi Mike_ASG,

 

Allow me to provide a short answer, so you can immediately match your transaction.

 

This is in addition to Alex’s answer about creating a credit memo and giving it as a refund by issuing a check. To add the fee to the refund, you can edit the check and add it on the second line, like in the screenshot. Then, click Recalculate to update the check amount and save it.

 

 

I'm also adding this article about reconciliation for your reference in the future: Reconcile an account in QuickBooks Desktop.

 

Please don't hesitate to reach back out if you have any other concerns with your transactions. The Community team is always here to help.

Mike_ASG
Level 2

Credit Card Refund Where Payment was Already Settled

Now the customers balance is showing they overpaid by the credit card fees and it still doesn't match in the bank feed.

Mike_ASG
Level 2

Credit Card Refund Where Payment was Already Settled

Okay I'm starting over. Here's what I have:

 

  1. Customer paid $407.89 for job on 08/26/2021 with square
  2. We received $397.18 from Square (they deduct their fee)
  3. I recorded the deposit as $407.89 minus $10.71 as a square expense.
  4. On 9/13/2021 we received a $407.89 check for the job from their accounting department.
  5. After contacting them they requested I refund the credit card and use the check.
  6. I refunded the credit card which draws $397.18 from my checking account

 

I now have the deduction of $397.18 from my bank feed. When I originally issued the refund it was for the full amount so it has no matching transaction.

I just deleted the refund I originally made in order to start new.

 

Alex suggested "Go to the Customers menu and select Create Credit Memos/Refunds to create a refund. Make sure to select the bank and not the Undeposited Funds account." But selecting a bank account is not even an option in the credit memo window. And what Item would I even put there?

I originally issued the refund by applying the payment and checking the box "REFUND THE AMOUNT TO THE CUSTOMER" and refunding via credit card, but that's how I'm in this mess.

Rose-A
Moderator

Credit Card Refund Where Payment was Already Settled

Hi, Mike_ASG. Allow me to step in and help you sort this out.

 

You might want to create a check for the full refund amount and include the fees from there. This way, you'll be able to math check to your bank feed transaction.

 

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I'd suggest going through the following articles below. These will provide you with more details on how customer refund works in QuickBooks Desktop as well as managing your bank feeds:

 

Void or refund customer payments in QuickBooks Desktop.

Add and match Bank Feed transactions in QuickBooks Desktop.

 

Let me know if you need additional assistance. I'll be standing by to keep helping. Have a good one.

Mike_ASG
Level 2

Credit Card Refund Where Payment was Already Settled

Thank you- that matched the bank transaction. Am I supposed to also record a credit card refund in addition to that check? The check didn't satisfy their credit balance. And would that affect my ability to reconcile the checking account?

my-answer-is-nonsense
Level 5

Credit Card Refund Where Payment was Already Settled

@Mike_ASG  been a long day huh?

 

Don't delete the paid invoice. Create a credit memo, use the same item and tax code you used on the invoice, and give it as a refund check ($407.89). Once saved, open the check in the register and add the Square fee on the second line with a negative amount (-$10.71). Click RECALCULATE and save the check ($397.18). You should be able to match by now.

 

Create a replacement invoice, mark it as paid, deposit the payment (this was the check payment recorded through receive payment).

 

Delete all other unnecessary transactions.

my-answer-is-nonsense
Level 5

Credit Card Refund Where Payment was Already Settled

@Mike_ASG , try my steps to solve your problem. Don't follow those vague instructions with no amounts.

Mike_ASG
Level 2

Credit Card Refund Where Payment was Already Settled

Thank you, I figured it out! The account on line 1 needed to be Accounts Receivable not my bank. Oh my god what a relief!

I just needed to issue the refund with the second payment and go back and edit the check in the register to include the square fees, because the credit card refund wizard doesn't allow for multiple line items.

my-answer-is-nonsense
Level 5

Credit Card Refund Where Payment was Already Settled

@Mike_ASG good to know, but I wonder why you said you need to use A/R on the check. A/R should be preselected when you turned that credit memo into a refund check.. Don't tell me you created a separate check and left that credit memo open in the customer's profile.

Mike_ASG
Level 2

Credit Card Refund Where Payment was Already Settled

I didn't issue a credit memo. The first payment I applied to the invoice. I recorded the second payment as "receive customer payment and checked "Refund the customer" in the overpayment. I refunded via check from my bank, but the problem is the window that comes up has no way to split the payment.

 

So I then had to edit that check in the register to split the expense and ACCOUNT RECEIVABLE . Just like Rose had replied, but she had the bank in the split instead of accounts receivable. That cleared their balance and the bank feed and is logically how the events took place.

my-answer-is-nonsense
Level 5

Credit Card Refund Where Payment was Already Settled

@Mike_ASG alright. Technically, that works... technically

Mike_ASG
Level 2

Credit Card Refund Where Payment was Already Settled

Is there an issue with that way?

 

It seems like that's how it should be recorded. This invoice is a dozen line items that have "products" whose prices have since changed because of material costs. Recreating it in a credit memo would be a nightmare in itself.

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