Tech Note: How to Handle Refunds for Credit Card Payments

From time to time, customers return merchandise they purchased for one reason or another. In some cases, these returned items were paid for using the customer’s credit card.

Article #1139: How to Handle Refunds for Credit Card Payments, discusses how to record refunds for receivables collected in the form of credit card payments.

This article also presents the journal entries generated when credit card payment refunds are recorded and discusses the effects of these transactions in the bank reconciliation process.