Refund Processing Best Practices

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Overview

The table below recommends steps to follow in several refund scenarios.

Refund Scenario Best Practices

If...	First...	Then...
A payment was collected from an incorrect payment method Example: The wrong credit card was used.	Issue a refund to the payment method that was used. If you want to use the original invoice to collect a new payment, then you can issue an Open paid line item refund. If you prefer to have a new transaction charge to apply the new payment to, issue a Create a new charge refund.	Do not void any invoice line items. Collect a payment from the new payment method. The payment can be collected from the new payment method in one of three ways: If you selected True for this system setting: Auto-Collect On Electronic Form Of Payment Change, Aria automatically collects the outstanding balance when a new payment method is added. A Customer Service Representative can process the payment in Aria. The customer can submit a one-time payment in your User Self Service application.
A customer was charged in error. Example: An invoice was generated erroneously.	Issue a refund with reversal for the overcharged amount.	Reverse all invoice line items associated with the payment. A refund with reversal would reduce your revenue by the amount you refunded. No additional action is needed here.
A customer was overcharged. Example: An invoice included one or more erroneous charges.	Issue a refund with reversal for the overcharged amount.	Reverse all erroneous invoice line items that add up to the overcharged amount. Refund with reversal will reduce your revenue by the refund amount. No additional steps are needed here.
A customer was charged, and for a particular business reason, you want to return the money to the customer. In addition, you want to keep the invoice on record. Examples: You want to keep the invoice on record for accounting reasons or to acknowledge that service was provided.	Issue a refund for the invoice amount.	Do not void any invoice line items. Issue a cash credit or a service credit equal to the invoice amount.
You missed the deadline for issuing an electronic refund. Example: The payment processor allows for a 60-day refundable period on the electronic payment and account holder requests a refund after that time period has elapsed.	Extend the length of the allowable refundable period in Settings, so that you can issue an external refund in check form or some other method in the refundable amount. The type of refund you implement depends upon the business use case and why you want to issue the refund. For example, if you overcharge an account holder, you can issue a refund with the Reverse line items refund type. If a customer submitted a chargeback request, you may need more time to research and substantiate the claim and collect a payment in the future. In such a case where you want to use the original invoice, the Open a line item refund type would be recommended. You may also choose to use the Create a new open charge refund transaction in this case if that is preferable.	Do not void any invoice line items. Issue a cash credit or a service credit equal to the invoice amount. To extend the allowable refundable period: Increase client parameter "Refundable Payment Maximum Days" in Payment Settings to a value that exceeds the payment processor deadline. Adjust Aria defaults for refund deadlines to provide for longer refundable periods.

Note: A best practice is to only issue 1 type of refund per 1 payment transaction.