How to Enter a Credit Card Refund in QuickBooks Online

Welcome to the Fit Small Business QuickBooks Online training course. In this lesson, we will cover how to enter a credit card refund in QuickBooks Online. You can follow along on your own QuickBooks Online account. If you don’t have one already, you can sign up for a free 30-day trial and follow along below.

To complete this lesson, you can either watch the video below, read through the step-by-step instructions, or do both. Let’s begin.

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When to Enter a QuickBooks Credit Card Refund

When you purchase items using your business credit card, you may need to return something because it was damaged or it just didn’t work out. The vendor will usually process the return using the same credit card that you used to make the purchase. When this credit shows up on your credit card statement, you need to enter it as a QuickBooks credit card refund.

In this lesson, we will walk through the process step-by-step to show you how to correctly enter credit card refunds in QuickBooks Online.

How to Enter a Credit Card Refund in QuickBooks in 2 Steps

Entering a credit card refund in QuickBooks only requires a couple of steps. You will navigate to the credit card register by displaying the chart of accounts. Once there, you’ll locate the credit card account you need to record the refund in and view the register. You’ll need to enter the details of the credit card refund, such as date of the refund, amount, and category for which you’re receiving the refund (e.g., office supplies).

The steps to enter a credit card refund in QuickBooks are:

1. Navigate to the Credit Card Register

To navigate to the credit card register, you will need to display the chart of account first. Once the list of accounts is displayed, scroll down to the credit card account you received the refund for to view the register.

From the Home page, click on the Gear icon to the left of the company name and select Chart of Accounts, as indicated below:

Navigate to the credit card register in QuickBooks Online

From the chart of accounts list, click on the View Register link next to the credit card, as indicated below:

View the credit card register in QuickBooks Online

2. Enter the QuickBooks Credit Card Refund

To record the refund, you will need to select the transaction type “CC Credit,” which stands for credit card refund. In the next screen, you will complete the fields of information such as date, amount, and account.

From the drop-down, select “CC Credit,” as indicated below:

Enter the details of the credit card refund

Complete the fields as indicated below to record the return:

Record a credit card refund in QuickBooks Online

A brief description of the fields you will complete to record a QuickBooks credit card refund are:

1. Account: From the drop-down, be sure that you are in the correct register. If not, select the correct credit card. This is the credit card to which you’ll credit the purchase.
2. Date: Enter the date you returned the product.
3. Ref No. or Type: This field is optional. I recommend that you enter CREDIT. Below the Ref No. field is the transaction type. QuickBooks will put the transaction type that you selected in the above step.
4. Payee: From the drop-down, select the vendor to whom the return applies.
5. Memo: Include any additional information about the return in this field (e.g., reason for return).
6. Payment: Enter the cost of the item that was returned.
7. Account: From the drop-down, select the account to which the return needs to be credited. Tip: It’s best practice to use the same account that you categorized the original purchase to record the credit card refund.
8. Save: Once you have completed all of the fields, you can save this transaction.

How to Edit a QuickBooks Credit Card Refund

If you need to make any changes to a credit card refund that was previously recorded, you can do that in just a few steps. First, navigate to the credit card register and select chart of accounts. Locate the credit card account and view the register. Second, locate the transaction you need to make changes to and make the necessary changes.

If you need to edit a QuickBooks credit card refund you previously entered, you can do so by following these steps:

1. Navigate to the Credit Card Register

To make changes to a credit card refund that was previously recorded, open the chart of accounts list. Scroll down to the credit card account that you recorded the refund in and view the check register.

From the Home page, click on the Gear icon to the left of the company name, and select “Chart of Accounts,” as indicated below:

Navigate to the credit card register in QuickBooks Online

From the chart of accounts list, click on the View Register link next to the credit card, as indicated below:

Select View Register in QuickBooks Online

2. Edit the QuickBooks Credit Card Refund

Once you locate the credit card refund in the register, you can make any required changes. Be sure to save the changes so the financial statements will update in QuickBooks.

Below you will find the credit card register fields that need to be completed in QuickBooks:

Edit the QuickBooks credit card refund

The fields you need to complete to edit a QuickBooks credit card refund are:

1. Select the credit card account: From the drop-down, select the credit card used to record the refund.
2. Activate fields: Click anywhere within the transaction to activate the fields so that you can make the necessary changes.
3. Save the changes: Click the save button to save the changes you have made.

What Impact QuickBooks Credit Card Refunds Have on the Financial Statements

When you record credit card refunds in QuickBooks, they affect multiple accounts and financial statements. Depending on what was purchased, an asset or expense account will decrease. The impact on an asset account will appear on the balance sheet report. If it affects an expense account, you will see the change on the profit and loss statement. Finally, the credit card liability account will decrease and you will see this change on the balance sheet report.

When a QuickBooks credit card refund is entered, it has the following impact on your accounts and financial statements:

Frequently Asked Questions (FAQs) About How to Enter a Credit Card Refund in QuickBooks

In this section, we have included the most frequently asked questions about how to enter a credit card refund in QuickBooks. If you don’t see your question below, head over to the Fit Small Business forum and post your question there. One of our industry experts will promptly respond to your question.

The most frequently asked questions about how to enter a credit card refund in QuickBooks are:

How do I handle a refund in QuickBooks?

If you need to refund a customer for products that were damaged or returned, or for services that you did not render, follow these five steps:

1. Click on the Quick Create menu button
2. Select Credit Memo
3. Complete the fields for customer, product or service, amount, and so on
4. Save the credit memo; you should see a notification asking you if you would like to apply the credit memo to an invoice or refund the customer
5. Follow the on-screen prompts to make your selection

How do I enter a refund from a supplier in QuickBooks?

To enter a refund from a supplier in QuickBooks for product you returned, follow these six steps:

1. Click on the accounting tab located on the left menu bar
2. Click on the chart of accounts tab at the top of the page
3. Scroll down and select the bank account or credit card account that was refunded
4. Click the view register link
5. Enter the date, amount, account, and a brief description
6. Save your changes

How do I enter a credit card refund in QuickBooks?

You can process a credit card refund in QuickBooks in six steps:

1. Click on the gear icon
2. Select chart of accounts
3. Scroll down to the credit card account
4. Click on the view register link next to the credit card account
5. Enter the transaction type, date of the refund, amount, and the account (category)
6. Save the credit card refund

Bottom Line

That wraps up the section on how to enter credit card refunds in QuickBooks Online. The next lesson in our QuickBooks Online Training Course will be How to Reconcile Business Credit Cards. In this lesson, we will explain the importance of reconciling and how to reconcile credit card transactions in QuickBooks Online.

To access this lesson or any of the others in the series, click the links below. Get started with QuickBooks Online by signing up for a free 30-day trial of QuickBooks Online.

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