The difference between Refund and Void a Payment
Refund vs Void
The distinction between a Refund and Void of a Payment lies in their implications. A refund involves reversing a transaction that has already been processed, creating a debit adjustment to offset the original credit entry. It signifies a return of funds to the customer's account and generates a separate transaction with associated fees.
Voiding a payment cancels a transaction before it's settled, essentially nullifying it as if it never occurred. This action typically avoids additional transaction fees, as it removes the need for a separate debit entry and refund.
Both actions serve to correct transactions, but a refund reverses a completed transaction, while a void cancels an unprocessed or unsettled one.
Refunds will be visible on a folio, whereas voids will not be displayed.
Credit Card Payments
Before the Payment is Settled (Night Audit)
If the night audit has not been conducted, and the batch has not been settled, it is still possible to void or override a payment.
If the override amount is higher than the original posting, an increment or increase of the authorization will be processed to match the new amount.
If the override amount is lower than the original posting, a reverse or decrease of the authorization will be processed to match the new amount.
Whether it's a payment or a refund, both are considered transactions for the credit card processor. Hence, a payment and a refund translate to two transaction fees. However, posting a payment and voiding it before the batch settlement results in only one transaction fee, specifically the one for the authorization during the initial payment posting.
After the Payment is Settled
In the scenario of a settled credit card payment, voiding is not an option. The only applicable action is to post a refund.
Cash Payment
Post & Void by a different User
Whether it's fixing a mistake or giving a refund, if one person post a payment and another person posts a refund or void, it can initially appear to cause discrepancies in their individual cash reports. However, by the end of the day, everything balances out.
Learn more: Voiding a Cash Payment made by Another User
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