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QuickBooks Credit Card Refund

QuickBooks Credit Card Refund

QuickBooks is a tool that will handle all your financial concerns and record keeping. QuickBooks can handle any transaction, including tracking credit card transactions and business transactions. You might occasionally need to view refunds in your transaction history as well. Naturally, keeping a record of every inflow and outflow will ensure that your records remain as accurate as possible. Discover the steps for recording a customer credit card refund in QuickBooks.

You can always accept and process credit card payments from clients using the QuickBooks platform’s payments feature. You might occasionally need to cancel or refund some of the credit card payments made by your clients. To ensure that everything is accurate and secure, you must follow a specific procedure when processing this. One thing we need to guarantee is accuracy, and with QuickBooks, we can do just that.

How Do Credit Refunds Work?

Requesting a refund from a retailer for a returned item works in the same way that the original purchase charge does. The cardholder returns an item to the merchant (or returns it in person), and the merchant reimburses the card issuer for the purchase amount. Most retailers do not allow cash refunds if the purchase was made with a credit card (debit card purchases may be possible, but not always).

After the issuer credits the purchase to the cardholder’s account, any points or rewards that the cardholder accrued will be deducted from the rewards balance. A negative rewards balance may exist in an account if the cardholder uses up all of their rewards before getting a refund.

How Do Credit Card Transactions Work?

A credit card company issues a credit limit for each cardholder. The credit limit functions essentially as a loan maximum. The cardholder is not permitted to spend more than their credit limit without first paying off the balance. A balance is the amount owed to the credit card company at the end of a billing cycle.

When a credit cardholder makes a purchase from a retailer, the merchant requests payment from the card issuer rather than the cardholder. The card issuer electronically pays the merchant and adds the charge to the cardholder’s balance. The cardholder is then responsible for repaying the issuer for the amount charged. Making purchases with a credit card is beneficial for several reasons, including the ability to earn points or rewards, the ability to dispute charges and not be held financially responsible, and the ability to obtain additional purchase protection when available under the card agreement.

How long does it take to process a refund on a Credit Card?

The policies of the retailer, the card issuer, and the cardholder’s method of return all have an impact on how long it takes for a refund to be processed. Returns that are made in person are typically processed more quickly than returns that are sent back to the seller.

After the return is processed, some retailers promise that the money will be refunded to the cardholder’s account in three to five business days. Before returning anything, it’s always polite to review the retailer’s return policy on its website.

The amount of purchase may take the issuer seven to ten business days to credit the cardholder’s account after the merchant has processed a return. Expect a credit to appear on an account one to two billing cycles after the item has been shipped.

Customer payments in QuickBooks Online can be Voided or refunded:

In QuickBooks Online, you can accept and handle credit card payments from your customers if you have QuickBooks Payments installed. To ensure the accuracy of your accounting, you might occasionally need to void or refund payments. We’ll walk you through the process of cancelling or refunding payments, as well as issuing partial refunds.

When can a transaction be voided or refunded?

Every working day at 3:00 PM PT, payments are processed in batches. You can cancel a payment transaction that hasn’t yet been batched. A fee will not apply if you cancel the transaction before the payment is processed. The processing times for payments are explained in more detail here.

Your customer will need a refund if the payment transaction has already been batch-processed. You have the option to refund the entire sum or just certain goods, charges, or services. Don’t forget that refund transactions are subject to fees.

The payments are automatically batch processed if you have instant deposits set up.

Steps to void a credit card-based sales receipt:

  • Enter your QuickBooks Online username and password.
  • To access the All Sales tab, go to Bookkeeping, then Transactions.
  • To cancel a sales receipt, locate it.
  • Pick Void from the dropdown menu in the Action column.
  • For the sales receipt to be revoked, select Yes. From the Action column’s dropdown menu, choose Print to print a copy of the document.

How to Void a Credit card-paid Invoice:

  • Select the All Sales tab under the Transactions section of the Bookkeeping menu.
  • Locate the bill you want to cancel.
  • Choose Void from the dropdown in the Action column.
  • To cancel the invoice, choose Yes. Choose Print from the Action column’s dropdown menu if you want to print a copy.

Steps to Void a credit memo or Refund:

If the transaction hasn’t settled and you need to cancel a refund or credit you gave a customer, you can do so as follows:

  • Select Customer Centre from the Customers menu.
  • Open the customer’s profile by searching for it.
  • Locate and open the credit memo or credit card refund you need to refund.
  • Select View Refund receipt from the Credit Card Refund or Credit memo window.
  • Choose Void Refund, then click OK.

Return a client’s payment:

You can issue refunds in QuickBooks Online in a few different ways. The steps you need to take depend on how you handled the transaction.

Note: Keep in mind this information when processing credit card refunds.

  • Only the original credit card that was used to make the purchase can receive credit back. To confirm this information, you might need to speak with your customer.
  • Only the amount of the original sale may be refunded.
  • Only within 90 days of a sale are credit card refunds permitted.

Issue a manual refund:

  • Select Refund receipt after choosing + New.
  • Choose the customer you want to issue a refund to from the Customer dropdown.
  • Use the same information from the original sale to fill out the fields.
    • Select a Credit card from the Payment method dropdown menu to send the refund to the customer’s credit card.
    • Choose Direct Debit from the Payment method dropdown to send the refund to the customer’s bank account.
  • Choose the account from the “Refund from” dropdown to which you want to issue the refund.
  • then click Save and Exit.

Refund a credit card payment made for a sales slip, a paid invoice, or a payment receipt:

You can issue a credit card refund to a client who made a purchase from you if you use QuickBooks Payments, and you can do this directly from the sales receipt, invoice, or related payment.

  • Navigate to Bookkeeping, choose Transactions, and then pick the All Sales tab.
  • You must locate and choose the sales receipt, invoice, or payment to which a refund should be applied.
  • Select Refund from the More menu in the footer.
  • Once you have reviewed the transaction details, click Save and close.
  • You can adjust the items or amount if you need to give a partial refund, please note.

Steps to enter a credit card refund in QuickBooks Online:  

This tutorial will show you how to enter a credit card refund in QuickBooks Online so that you can reduce your credit card balance when a charge is reversed or reduced. We’ll also show you how to locate the credit in the register, review the information, and make any necessary changes.

Step 1: Open the Credit Card Credit Screen.

Click + New at the top of the left menu bar on the QuickBooks Online dashboard, and then select Credit card credit in the second column, Vendors, as shown below.

Step 2: Enter the Transaction Data

The expense screen and the credit card credit screen are nearly identical, as we covered in our tutorial on manually entering credit card transactions in QuickBooks.

  1. Payee: Indicate the business name that issued the refund. We decided on 123 Plumbing Supplies as the supplier based on our sample.
  2. Bank or credit account: Decide which credit card will be used to receive the refund. In our situation, we went with the Bank of America Credit Card.
  3. Date of payment: Indicate the day the credit was granted.
  4. Category specifics: To ascertain which category or expense account should be credited with the refund, consult the original credit card expense entry.
  5. Item information: Use the same things that were on the initial expense entry. Include the quantity (QTY) of the returned items if you are entering credit because you are returning inventory items that you have already purchased so that your inventory owned is decreased. The total will be calculated by QuickBooks and displayed in the Amount field in the top right corner of the screen.

Click the green Save and Close button in the bottom-right corner of the screen once the credit information has been entered to reverse the appropriate portions of the initial expense.

Steps to enter a credit refund you received using a credit card in QuickBooks Desktop (QBDT):

This is how:

  • Choose to Enter Credit Card Charges under Banking.
  • Refund/Credit can be selected by selecting the Credit Card account.
  • Choose the vendor and the date from the Purchased From dropdown menu.
  • Specify the charge or refund in a memo. This is not required.
  • Enter the expenses or items you want to track by choosing the Expenses or Items tab.
  • Click on the Save & Close option.

How to give your customer a credit or refund in QuickBooks Desktop for Windows:

Find out how to make a credit memo or refund check in QuickBooks Desktop for Windows. Giving your customers a refund or credit is simple with QuickBooks.

Step 1: Write a credit memo

  • Select Create Credit Memos/Refunds from the Customers menu.
  • Pick your customer from the Customer: Job drop-down menu.
  • Enter the items you want to credit, then click Save & Close.

Step 2: Decide how you want to manage the credit.

Select one of the following options and OK in the Available Credit window.

Keep it as a credit that is still available: For the credit memo, QuickBooks records a negative sum in your Accounts Receivable (A/R) register. This credit may be applied to another transaction as payment. The available credits will appear in the customer payment window if you decided to keep them as available credits.

Refund the purchase price: The refund may be given in cash or by check. Learn how to issue a credit card payment refund if your client used one.

Apply to a bill: The Apply Credit to Invoices window is displayed by QuickBooks. Choose the invoice to which you want to apply for the credit.

Option 1: Continue to treat as a credit that is available.

The window for receiving payments will be visible.

  • Choose Customers, then click Accept Payments.
  • Choose your customer from the Received drop-down menu.
  • Select the icon for discounts and credits next.
  • Check the credit you want to apply for under the Credits tab, then click Done.
  • A prompt to confirm the transfer may appear. If so, choose Yes. The sum will be automatically applied to the invoice.
  • Select the Save & Close option.

Option 2: Issue a refund.

  • The check is automatically filled out. Choose OK.
  • Attach the check and the overpayment. Select Receive Payments from the Customers menu after navigating there.
  • Choose the Customer from the Received drop-down menu.
  • Select the icon for discounts and credits next.
  • Select the check you created in the Available Credits section and then Done.
  • You may be asked to confirm the transfer. If so, choose Yes. The sum will be automatically applied to the invoice.
  • Choose Save and Close.

Option 3: Credit an invoice.

  • Make sure to choose Customer: Job when creating the credit memo. The Apply Credit to Invoice window will appear.
  • Choose the credit to be applied automatically and click Done.

When Should You Enter a Credit Card Refund in QuickBooks?

When a charge is canceled or reduced, you must enter a credit card refund in QuickBooks Online to take the vendor credit out of the credit card balance. When you realize a purchase was flawed or unnecessary, you should immediately enter a credit card refund. In most cases, the merchant will process the exchange using the credit card you used for the original transaction.

You must enter this refund in QuickBooks so that the credit card balance in QuickBooks is accurate. It will show up on your credit card statement as a reduction in your balance.


1. In QuickBooks Desktop, how do I refund a credit card payment?

The following are the steps for making a QuickBooks Desktop refund credit card payment: To begin, launch QuickBooks Desktop on your computer. Then, sign in to QuickBooks payments as well as your desktop software. Select Customer from the menu. Select either Credit Memos or Refunds.

2. How long does it take to receive a QuickBooks refund?

This transaction will appear as a negative number in your QuickBooks Accounts Receivable account, and your customer should receive a refund within 2-4 business days, or at the end of the customer’s billing cycle, depending on the financial institution that issued the card.

3. In QuickBooks, how do I retain credit?

Keep as credit available. QuickBooks enters a negative amount for the credit memo in your Accounts Receivable (A/R) register. This credit can be used to pay for another transaction. If you chose to keep it as available credit, the available credits will be displayed in the customer payment window. Provide a refund.

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