How do you refund an ACH payment?

Allow me to provide details on alternative ways of reimbursing a customer @meyer104.

The message you encounter when processing the ACH refund might indicate that there is an update or that the system is still undergoing maintenance.

For now, you can initiate the refund manually in the program. By directly issuing a refund receipt, you can reimburse your customer.

Here's how:

1. Sign in to your QuickBooks Online account.
2. Select + New, then select Refund receipt.
3. From the Customer dropdown, choose the customer you want to refund.
4. Ensure that all fields are completed with the same information as the original sale.
   • To issue a refund to their credit card, select Credit Card from the Payment method dropdown.
   • To issue a refund to their bank account, select Direct Debit from the Payment method dropdown.
   • Note: If you don't have the Direct Debit in the Payment method dropdown, select + Add new, then select Save.
5. From the Refund from dropdown, choose the account the refund is coming from.
6. Select Save and Close.

Alternatively, you can process a reimbursement outside of QuickBooks and manually record the refund in QuickBooks Online.

For more detailed instructions, please refer to the article for additional insights: Void or refund customer payments in QuickBooks Online.

I'm always around to help if you have questions about a refund to your customer. Have a great day!

Hi @James_AL, 

Thank you for your message.  

The strategy you suggested is for reversing credit card payments, not ACH.  I tried clicking on Learn more about how refunding bank transfers work., but it's an inactive link.  Please advise.

Stephanie

The error mentioned in the original post means that refunding payments received by ACH is unavailable, meyer104. I can provide an alternative way to reimburse your customer in the program.

Instead of opening the payment from the invoice page, we can manually create a refund receipt directly from the menu. Please know that it's for recording purposes only. I'll show you how.

1. Go to the + New button, and select Refund receipt.
2. On the Customer ▼ dropdown, choose the customer you want to repay.
3. Click the Refund From ▼ dropdown, then pick the bank you deposited the payment for the invoice.
4. Add all items in the Product/Service column.
5. Fill in the date, quantity, rate, amount, sales tax, and other fields accordingly, then tap Save and close.

To pay the customer back, write a check. This way, you can match this entry once the bank transactions arrive. Here's an article for complete details: Match online bank transactions in QuickBooks Online.

However, you can process the reimbursement outside QuickBooks if the error continues to appear.

Check out this guide for other ways to return your customer's money: Record a customer refund in QuickBooks Online.

I've also included a couple of detailed resources about working with ACH returns/disputes that may come in handy moving forward:

• Void or refund transactions in QuickBooks Payments
• Fix rejected ACH payments or fees in QuickBooks Payments

I'm always around to help if you have questions about handling invoice settlements you received from your customers or processing refunds. Bye for now and take care.