What’s the Difference between a Refund and a Void?

What’s a VOID?

When you VOID a sale, you’re preventing the sale from being captured. For example, if you processed ten (10) sales today and realized that one of them was a mistake, you can simply void it! By voiding the sale, you prevent it from being sent in for processing – now your list of sales sent for capture will only include 9 transactions. The customer can still see the authorization on their credit card, but they will NOT be charged for the sale. After a few days, the authorization will “fall off” of the customer’s card, and they’ll never be charged. And, you aren’t charged for the sale since you never submitted it for processing! Although you will still pay the per-authorization fee.

The one caveat to successfully voiding sales is that you must void a transaction before settlement, which occurs daily, typically in the evening. Once your sales have been settled, they’re batched and sent for processing... at that point, you will no longer be able to void that sale. But, that’s where a refund could come in handy.

What’s a Refund?

Once you “capture” or “settle” your sale is being processed and there's no turning back. Per MasterCard and Visa protocols, the only way to cancel or undo a sale is to process a Refund (or Return). In review – when you process a refund, you’re processing an offsetting sale for the customer. Although it is important to keep these consequences in mind:

• You are still responsible for the first sale. Although it was processed, your customer was charged, you were compensated, and the sale was still subject to the customer's challenge. Hence, fees for the first transaction will still be due.
• The money of your client will be constrained. A refund involves executing a second, offsetting sale, as opposed to a void, where you simply cancel the sale. As a result, your consumer will first see the original sale amount deducted from their account, and then, after the refund has been processed, they will receive an identical credit. For clients, this delay might occasionally be frustrating.

We recommend Voiding whenever possible! This will help you save money and keep customers happy.