Trust in Commerce
There are times in every merchant’s life when a customer makes a purchase and is either unhappy with the product, decides they no longer want it, or maybe there is a mistake on the amount that was charged. In any case, a customer will contact you and ask for a refund. In the processing world there are two types of refunding methods—Credit and Void. What is the difference? We will cover that topic here to help you make the right choice.
What is a Credit?
A credit is submitting a request to return the funds to the account. Now, what some may or may not know is that you can either credit the full amount or request a partial credit. A partial credit will only provide back to the customer a portion of the authorized amount; not the full amount of the charge. This is important to know so you do not cancel out their full order and have to submit a new transaction.
Be aware, a credit will not provide the funds to the customer immediately. A credit is submitted, and like any regular authorization, it may take a few days for the funds to hit the customer’s account. This is something you will want to advise the customer to avoid any chargebacks. If your customer contacts you in regards to the credit, they can reach out to their card issuer by calling the number on the back of their card.
What is a Void?
A void is used when a refund is requested the same day of the purchase. If a customer makes the request the same day of the authorization, you may have to cancel the full order and re-charge them the correct amount. Voids are intended to be a quick release of the funds, meaning the customer should see the funds released back into their account immediately.
However, voids can be tricky because if the card issuer (the customer’s card provider) does not support voids, the transaction will be processed as usual then followed by a credit. This can cause confusion when the timing of the charge and the credit are on different days despite both transactions taking place the same day. Remember, you can only offer a credit after the day of purchase and the authorization has been settled. (Note: the funds will be provided within whatever standard time the card issuer allows.)
Now that you understand the difference, make sure to consider these as you build your customer service level agreements (SLA) for returns/cancellations. This will help ensure a positive customer experience.
Read the previous Tuesday Tip.
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