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Should You Void or Return?

Often a retailer will have to perform a return and refund a customer’s credit or debit card. This brings up the question as to which way is best to return the funds to the cardholder. Should you void or refund the transaction?

The general rule is that if the transaction has not been settled (batch closed) you want to void the transaction since voiding stops the transaction from fully processing.   There are limitations to how you can void a transaction.  Once the transaction is settled, it can not be voided.

Transactions are stored in your credit card terminal or computer software until settled.  If a transaction is still in the unsettled batch, it may be voided.

If your batch has closed out your only option is to refund the card holder.   If you return funds to a credit card, it MUST be to the exact same card the original sale was made one.

Even though a sale was voided, the authorized and unsettled funds may be held for 5-7 business days by the card issuing bank.  To speed up the release of the authorization and release the hold, you can call the phone number on the back of the credit card and explain that you are the merchant and want to release the authorization.  You may need to provide the authorization code as well.


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