Manage customer refunds
About refunds
When a customer requests a refund, you can always issue a full, partial, or itemized refund to the buyer, depending on the request. Payments processed through Square can be refunded within one year of the original transaction date, whether processed from Square Dashboard or the Square POS app. Once this window has passed, you must issue refunds outside of Square.
Before you begin
Make sure you have the right order before you process any refunds as a refund cannot be canceled.
There are no limits on the number of refunds you can process, but Square doesn’t allow refunding as a way to accept security deposits or pre-authorization charges (such as rental bonds).
Process a refund
Square POS apps:
- Sign in to your Square Point of Sale app and tap Transactions.
- Select the payment you’d like to refund. You can also search for the payment by card number, phone, customer name, receipt, notes, or item.
- Tap Issue refund.
- You can tap Select All Items to refund the entire sale, select only specific items to refund, or tap Amount to refund a specific amount.
- Tap Next.
- Choose how you’d like to refund the amount and select a reason for the refund.
- Tap Refund.
Square Dashboard:
- Sign in to your Square Dashboard and click Reporting > Transactions.
- Select the payment you’d like to refund. You can also use the filters to search for the payment.
- Click ••• > Issue Refund.
- You can check the Items box to refund the entire sale or check only specific items to refund. You can also click Refund Amount to refund a specific amount and select a reason for the refund.
- Click Issue Refund.
To balance your books, you can refund cash, checks, and other tender payments within one year of the original transaction date; however, Square doesn’t process any funds for these payment types and functions only as an organizational tool. There are no fees for recording other tender payment types. You will not receive email notifications for cash, check, or other tender refunds.
If a customer completed a payment using Afterpay Card on Square hardware, you can issue a full or partial refund within one year of the original transaction date. Square sellers should refund an Afterpay payment as they would any other payment with Square — from the transaction history via the Square Point of Sale app or Square Dashboard.
- Any paid installments will be returned to the customer by Afterpay, and any future payments will be removed.
- If issuing a partial refund, the refund amount will be first deducted from any outstanding installments, starting with the last installment to be paid. Then any amount over will be refunded directly to the customer’s payment method.
- Partial refunds may take several days to complete and a customer may not receive an immediate notification from Afterpay.
Learn more about how refunds and returns work at Afterpay on the Afterpay website.
How refunds work
Customers will receive an email notification once a refund is initiated in Square. The refund process can look like any of the following:
- Full refunds: Once a full refund is initiated, Square will debit the total amount of the transaction from your account and credit the full purchase amount back to the customer’s form of payment.
- Partial refunds: The amount you are debited will be proportional to the partial refund amount requested. The remaining portion of the payment can be refunded at a later time if applicable. Partial refunds will not include tax and tips in reporting.
- Itemized refunds: When issuing an itemized refund, the amount being refunded will reflect any applicable taxes (like a sales tax) and discounts for the selected items.
- Custom amounts: For transactions with a custom amount, you’ll have the option to refund any amount up to the total amount of the sale.
Once the refund finishes processing, you’ll receive another email notification. However, customers will not receive a notification regarding their refund. If they need proof of the refund, they can contact you directly to request a refunded payment receipt. Customers can also check their statement to see if the refund has been processed. Refunds from Square will show on a statement as SQ*, followed by the Square seller’s business name and type.
Note: Tips are line items and can be refunded individually. Since you’re unable to issue partial refunds for items, you can’t adjust the tip refund amount. To receive a tip after a sale has been refunded, you’ll need to reprocess the customer’s payment card.
How you’re charged for refunds depends on your transfer schedule.
- If you receive automatic nightly transfers, your Square account balance will be used to cover the amount of the refund and your bank account will be debited for any remaining amount. This activity will be reflected on your transfer reports on the business day you processed the refund.
- If you have a manual transfer schedule (including accounts with a Square Debit Card), Square may debit funds from your bank account, even if you have a sufficient Square account balance to cover the refund amounts. This will happen when a refund is requested for a payment taken on a prior day.
Funds removed from your account balance to cover customer refunds will be reflected as an “Adjustment” line item in your transfer activity found in your Square Dashboard > Banking > Balance. Refund requests that aren’t covered by your Square balance may not be approved.
Once a refund is initiated, your customer should see a pending transaction on their bank account for the refunded amount within 1-3 business days. This timeline to post the transaction ultimately depends on the card-issuing bank. Pending transaction notifications currently apply to payments made with Visa, American Express, or Mastercard. Pending transaction notifications will not apply for payments made with other card networks.
Square typically takes 2-7 business days to process a refund. Once the refund is processed and sent to your customer’s card issuing bank, it can take another 2-7 business days (depending on the bank’s processing speeds) for the refund to post to the customer’s account. In total, it can take up to 4–14 business days for your customer to receive their refund.
When a refund to a payment card is declined, the buyer will automatically be notified about the decline. In such cases, a few things can happen:
- If a new card was activated with the same card issuer, the refund is usually credited to the new payment card. The customer can confirm this with the card issuer.
- If the account was closed recently (last two months), the refund may be posted and the card-issuer usually contacts the buyer directly to notify them of any next steps.
- If the account has been closed for some time (more than two months), the credit will fail. In this case, we’ll notify you of the failure, and you’ll be instructed to issue an alternative form of payment to the buyer to complete the refund (such as cash, check, or gift card credit).
If the refund is lost, have your customer reach out to their card-issuing bank to locate the refund. If they’re unable to find their credit after talking with their bank, contact Square support.
Your customer may have canceled or closed their card in the time since the purchase was made. If this has occurred, your customer will need to contact their card issuer or bank to locate the returned funds and ensure that they are properly paid out to them.
If their financial institution requires details about an Afterpay refund, including a specific date, time, and amount, your customer can get in touch with Afterpay to ask for a refund confirmation.
Customize your refund policy
Customize your refund and return policy from the receipt settings in your Square Dashboard. Your policy appears on email, text, and printed receipts. If a return policy is absent, it’s assumed there is no policy. Be sure to clearly state if you don’t offer refunds or warranties. Learn how to customize receipts.
Note: All major card companies allow cardholders to charge back purchases if a customer can demonstrate that they didn’t receive the purchased product or service.