Refunding as Account Credit, and What Happens to the Card Fee
When you refund a payment you choose between two things, and they are genuinely different: Reverse Card Charge (or Cash Refund for a manually recorded payment). The money leaves the community and...
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When you refund a payment you choose between two things, and they are genuinely different:
- Reverse Card Charge (or Cash Refund for a manually recorded payment). The money leaves the community and goes back to the payer.
- Account Credit. The money stays with the community and is held for that billing account, ready to be applied to a future invoice.
The card processing fee
Some card payments carry a processing fee that the payer covered on top of what they owed.
Reversing the card charge returns that fee. In full on a full refund, and proportionally on a partial one. Card network rules require it, and that is what happens.
Account credit does not include the fee. No card transaction is reversed when you keep the money as credit, and the community has already paid that fee to the payment processor, so it is not money it still holds. The credit is the payment itself.
The refund screen tells you this before you type an amount: it shows the ceiling for account credit and, where a fee applies, states that the fee is not credited back. The two methods have different ceilings for exactly this reason.
Choosing between them
Reversing the charge is the better outcome for the payer when a fee was involved, because they get the fee back too. Account credit is the better outcome when they are going to owe the community again soon, because the money is already there and does not have to travel twice.
If someone specifically wants their processing fee back, reverse the card charge.
What happens to the invoice
Either way, the invoice the payment was applied to goes back to owing that money, and you are asked what should happen to the underlying charge: leave it owed, or cancel it.
What the history shows afterwards
The original application to the invoice stays in the credit history. The refund appears alongside it, and if it was a credit refund the new credit appears as an incoming line. Nothing is removed, so the sequence still reads correctly months later.