cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Not applicable

Issue a refund to a customer that paid online with a credit card

Hi Everyone,

 

I created 2 invoices for a customer. Let's say they were $100 for one, and $200 for the other. The customer paid online with their credit card. A few days later, I downloaded the payments, invoices showed as paid, all is good.

 

Due to a billing mistake, we realized that those invoices should have never been paid by the customer. Meaning, the invoices are still valid, but they will be paid by a 3rd party.   Essentially, I need to keep those invoices there and at the same time, refund the customer.

 

What I did first was "un-apply" the payments by going into the Receive Payments screen, finding the two payments made by the customer, and un-checking the invoices they were applied to. This generated a credit on their account and as such, the customers balance is now -$300.  I now needed to refund the $300 to their credit card.

 

I googled on how to process a refund and found this article:

 

https://quickbooks.intuit.com/community/Payments/Void-or-refund-credit-card-payments-in-QuickBooks-D...

 

When I create a credit memo for $300, the customers credit balance goes from -$300 to -$600.  If I process the refund, then the credit balance goes down to -$300.  This is wrong as I have already processed the refund, so their credit balance should be $0 and they should owe $300.

 

Basically, how can I handle this scenario?  It seems like it should be simple, but I'm struggling with this.

 

Any help or guidance would be greatly appreciated.

 

Thanks in advance!

Solved
Best answer 05-10-2019

Accepted Solutions
QuickBooks Team

Re: Issue a refund to a customer that paid online with a credit card

Hello, @KCTMIAMI.

 

I'm back to help share additional ways so to handle your transactions correctly.

 

When receiving the payment and issuing a refund to your customer, your customer's balance will now be zeroed out. It means that the invoice was already closed. Since you can't void the payment, in this case, you may need to create a new invoice/s for your customer that will be paid by the third party.

f3 customers balance.PNG

f3 refund.PNG

f3 new invoice.PNG

f4 after creating the new invoice.PNG

 

As always, I'll be right here to help you if you have any other questions, don't hesitate to click on the Reply button below. Wishing you continued success!

View solution in original post

7 Comments
QuickBooks Team

Re: Issue a refund to a customer that paid online with a credit card

Hi there, @KCTMIAMI.

 

I'd be glad to help guide you handle your transactions correctly.

 

To record the transactions correctly, you may need to create a refund receipt and give the refund to your customer.

 

  1. Click on Customers at the top menu bar.
  2. Select on Create a Credit Memos/ Refunds.
  3. Fill in the correct information.
  4. Click on Save and close.
  5. Select on Give a refund under Available Credit.

Once completed, you may have to void the payments you've received. To void the payment:

 

  1. Go to the Customers menu.
  2. Select Receive Payments.
  3. In the Receive Payments window, click Find and use appropriate filter to search for the transaction.
  4. Go to the Reports tab and click Processed Payment Receipt.
  5. Click Void then save the changes.

For additional reference, you may check this article: Void or refund credit card payments in QuickBooks Desktop.

 

Please feel free to add a post/comment below if you have any other questions about handling your transactions, I'll be always here to help you!

Not applicable

Re: Issue a refund to a customer that paid online with a credit card

Hi @Angelyn_T,

 

Thanks for the response.  However, your instructions are for Quickbooks Online.  I have the desktop version.

 

Any idea how to handle this in the desktop version?

 

Thanks!

 

KCTMIAMI

QuickBooks Team

Re: Issue a refund to a customer that paid online with a credit card

Hello there, @KCTMIAMI.

 

Thank you for getting back to us here on the Community page. Please know that I've already updated my answer above. If you have any other QuickBooks questions, please don't hesitate to add a comment below. I'm just a post away to help you.

 

In addition, you may also check our QuickBooks Desktop help articles if you have any other QuickBooks questions in the future: Help articles for QuickBooks Desktop.

 

Have a great day ahead!

Not applicable

Re: Issue a refund to a customer that paid online with a credit card

Hi @Angelyn_T ,

 

Thanks again for the updated answer.  However, the second part of your solution will not work in my case because you cannot VOID a credit card transaction once the batch has closed.  This is further confirmed by the article I linked in my original post:

 

  • Void: occurs BEFORE the batch has closed for the original transaction

 

The credit card transactions are already over 2 weeks old.

 

Any other ideas?

 

Thanks!

KCTMIAMI

QuickBooks Team

Re: Issue a refund to a customer that paid online with a credit card

Hello, @KCTMIAMI.

 

I'm back to help share additional ways so to handle your transactions correctly.

 

When receiving the payment and issuing a refund to your customer, your customer's balance will now be zeroed out. It means that the invoice was already closed. Since you can't void the payment, in this case, you may need to create a new invoice/s for your customer that will be paid by the third party.

f3 customers balance.PNG

f3 refund.PNG

f3 new invoice.PNG

f4 after creating the new invoice.PNG

 

As always, I'll be right here to help you if you have any other questions, don't hesitate to click on the Reply button below. Wishing you continued success!

View solution in original post

Not applicable

Re: Issue a refund to a customer that paid online with a credit card

Hi @Angelyn_T ,

 

Not the solution I was looking for since it will require me to do double the work (creating the invoices again). 

 

Also, it does not address the real issue which is that I can't disassociate the payment from the invoice.

 

However, your solution is a good work around to the shortcomings of QB, and it does solve my issue.  So for that, I thank you!  

 

KCTMIAMI

Moderator

Re: Issue a refund to a customer that paid online with a credit card

I was able to read the thread and got the idea of what's happening, KCTMIAMI. I'll provide my thoughts about it, too.

 

When you unlinked the payment from the invoice, it already created a credit to the customer's account. Thus, leaving the invoice open and not needing to create a Credit Memo. Instead, you only need to create a refund. The steps are provided in this article: Void or Refund Credit card Payments in QuickBooks Desktop.

 

Since the said invoice should be paid by a third-party, here's the possible process that we need to do:

  1. Create a bank deposit to show that you have received the payment from the third-party.
  2. Create a journal entry to transfer the amount from the third-party to the customer's account.
  3. Apply the payment to the affected invoice.

Here are the detailed steps of each process:

Create a bank deposit

  1. Click Banking at the top menu and select Make Deposits.
  2. Choose a bank account in the Deposit To field.
  3. Enter the details from the third-party entity (RECEIVED FROM, FROM ACCOUNT, MEMO, and AMOUNT).
    If you're unsure of the account to enter, you can your accountant for assistance.
  4. Click Save & close.

Create a journal entry

  1. Click Company at the top menu and select Make General Journal Entries....
  2. Enter the DATE and the ENTRY NO..
  3. Credit the Accounts Receivable and associate the customer.
  4. Debit the account you use for the third-party entity.
  5. Click Save & close.

Pay the affected invoice

  1. Open the invoice and click Apply Credits.
  2. In the Apply Credits window, go to the Credits section.
  3. Mark the amount that corresponds to the journal entry.
  4. Click Done.
  5. Click Save & Close.

I'd also recommend consulting your accountant to see if they have a different way of doing this. They know what's best for you and your books.

 

Let me know if you need anything else.

Need to get in touch?

Contact us