How do refunds work in Zoho Billing?
You can issue full or partial refunds to your customers for online and offline payments. Depending on the payment mode, the refund process works slightly differently.
Refunds for Online Payment Methods
Online payment methods include credit or debit cards, ACH, digital wallets, and other payment modes supported by the configured payment gateways.
Online payments in Zoho Billing are processed through payment gateways. Hence, when you initiate a refund for online payments, the payment is automatically issued from the payment gateway to your customer’s source account. Following this, a credit note will automatically be created in the closed status in Zoho Billing to adjust the refund amount in Zoho Billing for the payment that was recorded.
Scenario: Zylker Solutions sells design software online. One of their customers, Brandon, purchases a yearly license for ₹5,000. A week later, she requests a refund as she’s unhappy with the purchase. Since the payment was made online, Zylker initiates the refund from Zoho Billing by creating a refund, and it is processed automatically via Stripe. Zoho Billing then creates a closed credit note to reflect this.
Refunds for Offline Payment Methods
Offline payment methods include cash, bank transfers, cheque, and any manual methods of payments that are recorded directly in Zoho Billing.
Offline payments are payments that you’ve recorded in Zoho Billing. Hence, similar to recording a payment, you can save (or record) a refund in Zoho Billing. Once you save a refund, the payment received will be dissociated from the related invoice, and it will be marked as unpaid.
Note: Any excess amount recorded in the payment will also be refunded.
You will be able to view the refunds recorded for a particular payment in it’s details page.
Scenario: Zylker Travels collects a ₹5,000 cash payment from a customer, Priya, for a tour package. A few days later, Priya cancels the trip and requests a full refund. Zylker Travels returns ₹5,000 to him in cash and records the refund manually in Zoho Billing. The previously recorded payment is dissociated from the related invoice, and it is marked as Unpaid.
How to issue refunds
You can issue a refund from the Payments Received module, or from the invoice’s details page. To issue a refund from the Payments Received module:
- Go to the Payments Received module.
- Select the payment you wish to refund.
- Click More > Refund.
- Enter the refund amount and reason.
- Click Save to process the refund.
To issue a refund from the invoice’s details page:
- Go to the respective invoice’s details page
- Click the Payments Received dropdown section. You will see the recorded payments of the invoice.
- Click the Actions dropdown next to the payment you wish to refund, and select Refund.
- Enter the refund details in the popup that appears, and click Save.
You can also issue refunds with credit notes.
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