A refund returns money; a credit reduces an amount owed or leaves value on the customer's account for future use.
The correct choice depends on policy, payment method, accounting treatment, and whether the customer should receive cash back or retain value for later.
What Is the Difference?
| Concept | Refund | Credit |
|---|---|---|
| Effect | Returns money that was previously paid. | Reduces a current or future amount owed. |
| Cash movement | Usually sends money back through a payment method. | May not move cash immediately. |
| Example | Return $100 to the card. | Apply $100 credit to the next invoice. |
Can a Cancellation Create Either One?
Yes. A cancellation policy may call for a refund, a non-refundable amount, or a credit toward future service.
Why Should the Original Transaction Stay Linked?
Keeping the refund or credit linked to the original invoice and payment preserves a clear financial history and makes reconciliation easier.
Where Does Reporting Fit?
Use Refund Management for refund workflows and Credit Management for account credit controls.
What Should You Review Next?
Related reading: Recurring vs. Subscription Billing · What Happens When a Payment Fails?.
Sources and Further Reading
- Booking Ninjas: Refund Management — covers refund approvals, policy rules, original-transaction links, and financial visibility.
- Booking Ninjas: Credit Management — covers structured customer credit controls and credit records.
- Stripe Billing APIs
- Stripe: How Subscriptions Work
- Stripe: Refund and Cancel Payments
- Stripe: How Disputes Work
External references explain the underlying concepts; they do not imply Booking Ninjas requires or uses the referenced product.