Tip #181- Partial Refund of a Different Kind

Tip #181
Partial Refund of a Different Kind

On an e-mail I received yesterday…

“(Probably I should know this???  Tired brain from last week.)

I have a customer that placed an order for approximately $100.00.  The girlfriend refused to accept the arrangement.  We spent a lot of time on the whole fiasco, so I would like to keep $10.00 and not do a full refund. So, how do I refund just $90.00, not $100?

thank you”

For a full explanation of partial refunds, please refer to Tip #131, but this is a little different situation.  However, it can be resolved the same way.

Here the florist wanted to keep $10 for her troubles, sort of like a re-stocking fee.
We are also dealing with a credit card payment and PCI compliance.

I do not know the particulars but if the girlfriend refused delivery because she was mad at the boyfriend, in my opinion the boyfriend is not entitled to anything.  The florist fulfilled her part of the contract.  It is not her fault that the girlfriend did not want to accept the flowers from the boyfriend.

However, maybe she did not accept delivery for a different reason.  The bottom line is that the florist wanted to refund the entire amount of the order less $10.00 for her troubles.

Here is how you can do it, should it ever happen to you.

Use the Refund and Update option to credit the full amount of the order and then, in the update portion of the process, add a line item with a negative amount for the refund you want to give.

So in our florist case, she would first refund the original $100.00, then enter a new line item for -90.00 (the amount she wants to refund) and then she would get an approval for the new total of $10.00.  This is, of course, if there are no other additional charges.

If you would like to keep track of refunds like this one, you must use an item code.
flowerSoft is geared to recognize 2 item codes for refunds.  One is REFND and the other one is REFUND.  If you do not have either of those codes because you erased the codes flowerSoft came with, simply add them to your own list of item codes.  The REFUND code is fairly new and your flowerSoft version may not as yet recognize it, so to be safe use the REFND code.

When you give a refund, you have the option of refunding the sales tax or not.  During the refund process, flowerSoft will ask you if you would also want to refund the sales tax on the $90.  Simply answer the question the way you would like the refund to be.

Also, be aware that if the method of payment is by credit card, you have to issue the refund as an additional line to the original invoice.  You cannot enter the refund as the only item on a ticket when the method of payment is by credit card, like you can with other methods of payment.

Let’s say that our original order looked like this…


Now you need to reverse & update the order and add a line item for the refund of $90.00


If you enter the refund as a positive amount, flowerSoft will ask you to make it a negative amount.  Also, a refund on a credit card order cannot be larger than the original amount.


Here is where flowerSoft tells you that it will calculate sales tax on the refund amount.  In other words, if the refund is for $90.00 and flowerSoft calculates tax on it, the actual refund will be $90.00 + plus whatever the sales tax is on the $90.00.  Let’s say you sales tax rate is 10% to make the math easier, if flowerSoft calculates sales tax on the $90.00 refund, the actual refund will be for $99.00.  $90.00 plus 9.00 sales tax.
So flowerSoft is asking you do you want to give a refund for $99.00 or for only $90.00?


Let’s say that we want the refund to be for a total of $90.00, so we are going to answer yes to the question.  Then flowerSoft will calculate how much the line item should be for so that when the sales tax is added to it, the total of the refund will come up to $90.00.
In our example, the sales tax rate is 8.7%


flowerSoft reduced the line item refund amount from -90.00 to -82.80.  Why?  Because if you calculate the sales tax on 82.80 at 8.7% it comes up to 7.20 and 82.80 + 7.20 adds up to 90.00.


So now our order looks like this and we are going to charge the customer’s credit card $29.51.  Why?  Because the total of the original order was $119.52 and refunding $90.00 on that amount would make the total 29.52.  The reason why it is 29.51 instead of 29.52 is due to the mathematical rounding that takes place.

Also note that if you also want to refund the delivery charge, you must zero it out manually.

The other option you have is to answer “No” the question about extracting the tax amount from the -90.00.  In that case our order would look like this…


In this case, the line item discount is left at -90.00 and the sales tax amount on it (-7.83) is also refunded.  The 1.74 sales tax shown  is for the sub-total amount of 19.95.

I know this is not an easy concept to understand but the only decision you have to make is whether you also want to refund the sales tax on the refund amount or not.  flowerSoft will take care of the rest.


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