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Refunds

Overview

A refund is the return of money that was previously paid by an account holder. The refund of a payment increases the account holder's balance by the amount of the refund. By default, refunds are issued to the original payment. 

To issue a refund, you must complete three major steps:

  1. Select or specify a refundable payment. Refund a payment. This increases the customer's balance by the amount of the reversed payment if paid out in full.
  2. Select a type of refund to, 
  • reverse a paid line item. 
  • create a new open charge. 
  • open a paid line item.
  1. Select a payment method.
  • By default, an electronic payment will be issued a refund to its original payment method. Some payment processors  also support an option to issue a refund to an alternate payment method. If the client parameter "Refundable Payment Maximum Days" is configured, you can issue an external refund to an electronic payment that has crossed its refundable period.

  • External payment in the form of a check can only be issued for an external refund.

Refund Prerequisites

You can issue a refund of a payment only if all of the following are true:

  • The full amount of the payment has not already been refunded.
  • The payment is recorded in Aria as a result of either being manually recorded by a user in Aria (i.e. for a check mailed by a customer) or being collected electronically by Aria.
  • For electronic payments methods, the original payment date falls within an allowable timeframe for refundability as determined by the payment gateway.
  • By default, Aria allows you to issue refunds no less than two days and no more than 60 days after the original payment.

Note: You can contact Aria Customer Support if your payment gateway allows refunds outside of Aria's default time frames.

 

Refund Types

There are three types of refunds that exist currently in Aria that can be implemented. This section describes what implementing each type means, what happens when processing them, and why you might choose one over another. 

Refund types are as follows:

  • Reversing (void) an invoice line item  -  (Default) Creates another line item that reverses the original invoice charge, that is, it adds a line item transaction to the account that nullifies the charge being refunded. This decreases your revenue by the amount of the reversed line item(s) but has no impact on customer’s balance.
  • Creating a new open charge -  Opens a new charge transaction while the account holder is refunded their money. This increases your customer’s balance which needs to be paid in the future but has no impact on revenue. 
  • Opening a paid invoice line item  -  This refund type will unapply a payment and open the balance of a previously paid invoice line, allowing you to adjust it by the refund amount.  This increases your customer’s balance but has no impact on revenue.  

Note: Note that when performing refunds in Aria Crescendo, the actions are irreversible after they are performed. In the UI, confirmation screens will appear before actions can be completed and warn you that the action is permanent.

 

Refund Deadlines

Payment gateways or processors have policies that set deadlines for granting refund requests on electronic payments. For example, many Payment processors have 90-day refundable periods on payments after it posts. Once the refundable period has elapsed, it is no longer possible to receive an electronic refund via the payment processor's refund request, review and approval process.

It is possible, however, to refund a customer in such a situation where the payment processor deadline is surpassed with an external refund in the form of a check or some other payment method. This is true of all refund types. The processed external refund is then tracked and recorded in Aria.. 

Note: Prior to the Release 46 version of Crescendo, it was not possible to receive an external refund on an electronic payment from a payment processor whose deadline was surpassed. If granted outside of Aria externally, the refund transaction was not tracked or recorded either.

 

Avoiding Deadline Issues

To ensure that external refunds can be granted after the payment processor deadline has been surpassed, the client parameter "Refundable Payment Maximum Days" ideally should be set to a max days value that exceeds the allowed refundable period set by the payment gateway or method by an appropriate margin (e.g., 365 days). This value governs the maximum days since a payment (electronic or non-electronic) is posted that it can be considered refundable. Getting hereConfiguration > Payment > Payment Settings. Be aware that you can reset this parameter accordingly in a retroactive manner if necessary, as long as you have the privileges to do so. 

So, the best practice is to enter a valid integer max days value in between 365 (same as payment processor limit) and 9999 (integers between 0-9999 are valid). If you set a Refundable Payment Maximum Days value that is less than the payment processor's limit, for example in the case, 180, then the value will be ignored and inherit the default value of 365 for non-electronic payments and will be deemed refundable. For general instruction for processing refunds, see Refund Processing Best Practices.

Refund Alternatives 

You always can return money to a customer by issuing a cash credit or a service credit depending on your business needs. In such a situation, you do not void any invoice line items because then you cannot associate an invoice with a payment that was made.

Aria can submit refund requests to the applicable payment gateway. The applicable payment gateway and issuing bank process the refund of money to the customer's credit card or bank account.

Note: Refunds to electronic payments methods may not be reflected in the customer's balance (credit card or bank account) for several days, depending on the rules of the payment gateway and issuing bank.

 


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