Transaction Void and Reversal Rules (2024)

FAQs

Can you reverse a voided transaction? ›

Once transactions are voided, they cannot be undone unless you restore from a backup. If there are transactions that should not have been voided, you can purge the check the check number and renter the transaction using the original check number.

Canceling a transaction is called “voiding” the transaction, while reversing a transaction is known as a refund. They both achieve the same end goal – the customer gets their money back – but as a small business owner it's important to understand the differences and when to use which method.

A voided transaction will typically disappear from a customer's credit/debit account statement within 24 hours. A refund, however, may take 3 to 5 business days to appear on a customer's credit/debit account statement. Some card-issuing banks could take 2 to 3 days to remove the pending charge.

A void transaction is similar to an authorisation reversal but occurs before the transaction batch is settled at the end of the business day. The business processes a void through its payment system, which sends a request to halt the transaction process.

A void transaction cancels a credit or debit card transaction before the funds have been transferred from the customer's account to the business's account. Timing: Voiding is typically done shortly after the transaction is initiated, often within the same business day.

It's crucial that you act quickly, considering the reversal must be sent to the bank within 24 hours of noticing the error and no later than 5 banking days after settlement. If the reversal is accepted, the reversed transaction is reconciled, and the funds are transferred back to the originator.

Reversals can occur for a number of reasons, usually because either the customer or merchant has noticed an issue with the transaction. For example, if the merchant charges the incorrect amount, the customer suddenly changes their mind about the purchase, or the item is no longer in stock.

Some examples of void transactions are mistaken charges, incorrectly-charged merchandise, and fraudulent purchases. Though a merchant swipes a card to the terminal, it is not fully settled until the amount is actually transferred from the customer's account to the merchant.

Some payment reversals are just normal business. Others can be exploitations of fraudulent customers, but the burden of payment reversals is often placed on businesses.

Any good business wants to save money while keeping their customers happy. Refunding does neither; voiding does both. Voiding doesn't allow the transaction to fully go through–so the customer doesn't even notice it on their bank account, and you don't hardly have to pay anything in fees.

What is the procedure for void transaction? ›

To void a transaction, a merchant should find the payment's ID or authorisation number and cancel it at the point of sale, a payment gateway interface, or dashboard, depending on how this payment was received.

If a payment failed and you were debited

Often times, wrongful debits that occur when a payment attempt fails are reversed by the customer's bank 24 hours after the debit, or the next working day if the debit occurs on a non-working day.

In a refund, the merchant returns the money to the customer's account, and the transaction is considered completed. In a reversal transaction, the bank or payment processor cancels the transaction, and the funds are not transferred from the customer's account to the merchant's account.

How long a payment reversal takes depends on the type of reversal it is. An authorization reversal can be immediate, and often without the customer even being aware it has happened. Refund and chargeback reversals take longer because funds have to be returned to the customer's bank account.

Refunds. Void transactions are different from refunds. With void transactions, the transaction is stopped before any money is transferred from the customer's account to the merchant's. Refunds, however, are issued after a transaction has settled and the merchant has received payment.

Answer: Purge the check. Note: If the check was posted, the reversing entries from the void must be posted before purging the check number. Recreate the check from the Invoice record or from banks printing it to blank paper OR Re-enter it as a manual check.

Refunds. Void transactions are different from refunds. With void transactions, the transaction is stopped before any money is transferred from the customer's account to the merchant's. Refunds, however, are issued after a transaction has settled and the merchant has received payment.

After you void an invoice, there is no way to recover or un-void it. You have to re-create the invoice.

It may request for a reversal of transaction. If the beneficiary agrees, the transaction will be reversed back within 7 working days. In case of beneficiary from another branch, you have to personally visit the branch to meet the bank manager for the solution.