One of the common questions we hear in Recurly support is "When should I void a transaction and when should I refund it?" Because Recurly strives to keep billing simplified, you need not worry - Recurly will automatically handle the transaction in the most appropriate manner. But for those of you that like details here's the science behind it all!

The difference between a void and a refund comes down to whether or not a transaction has been settled. When a payment is processed, the card processor verifies that the customer's account is valid and that funds are available before sending a success/decline message. Once this is complete the funds are held and the balance is deducted from the customer's credit limit, but not yet transferred to your merchant account. At the end of the day all transactions are batched up for settlement, and at that point the funds are transferred to your bank account.

An unsettled transaction can be voided—stopping the transaction from processing and removing it from the customer’s account. Once a transaction has been settled it can only be refunded, and a partial refund can only be made to a settled transaction.

Payment gateways will have different processing times for settling transaction, so Recurly will automatically attempt a void before processing a refund. Voids tend to be less expensive than refunds, so a void ends up saving you merchant account fees.

A voided transaction will typically disappear from a customer’s credit/debit account statement within 24 hours, while a refund may take 3 to 5 business days to appear on a customer’s credit/debit account statement.

Contact Support if you have any other questions about voids and refunds. We look forward to helping you out!