How Manual Credit Card Refunds Are Processed
You can refund all or part of a previously remitted credit card receipt to your customer credit card accounts.
You issue a credit card refund against the unapplied receipt amount to generate a negative miscellaneous receipt. You then run the Create Automatic Remittances program to process this negative receipt to transfer the funds from your account back to the credit card of your customer.
Settings That Affect Manual Credit Card Refunds
These settings affect manual credit card refunds:
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Complete the funds capture setups in Oracle Payments:
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Define formats
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Define payment systems
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Define system security options
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Integrate external payment systems
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Define credit card brands
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Define funds capture payment methods
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Define funds capture process profiles
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Define internal payees
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Credit Card Refund Receivables Activity: Define a Credit Card Refund Receivables activity. This activity identifies the general ledger clearing account to use to clear credit card refunds.
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Credit Card Refund Reversal Reason Lookups: Define lookup values to indicate the reasons for credit card refunds.
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Credit Card Transaction Receipt Class: On the original credit card transactions, use a receipt class with a creation method of Automatic.
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Credit Card Transaction Remittance Method: On the original credit card transactions, use a receipt class with a remittance method of Standard. When you refund these payments, the credit card refund (negative miscellaneous receipt) inherits the remittance method from the original receipt.
How Manual Credit Card Refunds Are Processed
The Create Automatic Remittances program passes the negative miscellaneous receipt information to Payments. The Create Automatic Remittances program uses Payments to transfer funds back and forth between the credit card issuer and your bank.
Payments initiates a refund even if the credit card has expired, because expired credit cards are usually reissued with a new expiration date. If a credit card has expired and wasn't reissued, then the credit card issuer declines the transaction and Payments reverses the refund.
If you make a mistake while initiating a credit card refund, you can correct the error in one of two ways, depending on whether the negative miscellaneous receipt was approved and remitted.
If the negative miscellaneous receipt wasn't approved and remitted, perform either of these steps:
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Unapply the credit card refund application line from the receipt. Receivables reverses the negative miscellaneous receipt and creates the necessary journal entries.
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Change the amount that you want to apply to the credit card refund application. Receivables reverses the original negative miscellaneous receipt and creates a new negative miscellaneous receipt for the correct amount.
If the negative miscellaneous receipt was approved and remitted, perform either of these steps:
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If the funds were transferred to the customer account, create a debit memo to bill to your customer for the balance due.
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If the funds weren't transferred to the customer account, reverse the negative miscellaneous receipt. This action unapplies the refund from the original payment. If necessary, you can apply a new refund application to the original payment.
Reverse Receipts with Credit Card Refunds
You can reverse a receipt with a credit card refund application either before or after the negative miscellaneous receipt was remitted.
If the negative miscellaneous receipt wasn't approved and remitted, reversing the receipt unapplies the credit card refund lines on the receipt and reverses the associated negative miscellaneous receipt.
If the negative miscellaneous receipt was approved and remitted, reversing the receipt doesn't automatically unapply the credit card refund application because Receivables assumes that the receipt was already refunded. In this case, when you reverse the original receipt, you must create a debit memo reversal.
If neither the original payment nor the refund settled, then you can reverse the actual credit card refund (the negative miscellaneous receipt) and the payment in order to reconcile with your bank. Reversing a negative miscellaneous receipt automatically unapplies the refund from the original receipt. You can then reverse the original receipt, which reopens the transaction.