Void versus Credit Rumble!
I know we have addressed this previously, but this topic bears a reminder as it could save real dollars. A void transaction takes place when a customer requests a return of a sale or perhaps even when a merchant mistakenly charges a credit card in error, like perhaps ringing in $1000 instead of $100. All point-of-sale equipment or online payment processing gateways allow for a “void” transaction, which stops the sale from being sent to the cardholder’s bank for payment. This type of transaction will be subject to a transaction fee (say 15 or 20 cents), but no percentage fee.
On the other hand, issuing a credit is a double-whammy because the original sale will be assessed at both the applicable percentage rate plus a transaction fee, and the “credit” is also charged a transaction fee. And with some processors, a percentage rate! The thing is, though – a “void” can only be processed before the day’s batch is sent to the bank, so in the case where a product or service is being returned after the date of the original sale, there is no choice – a “credit” must be rung.