Refund

A refund is a transaction where money paid in excess of what was owed is returned to the payer. This can take multiple forms: a tax refund, for example, is a reimbursement for having paid the government more than necessary over the year. Within the retail realm, however, it refers to a return of funds to a customer, typically to reverse a prior purchase.

Refunds involve crediting a customer's account with the same amount that was originally charged, effectively canceling the transaction. For all intents and purposes, it’s a sale in reverse. Ideally – although not necessarily – it also includes the return of whatever item is being refunded

Refunds are commonly issued in response to customer dissatisfaction, product returns, or billing errors, and they help maintain customer satisfaction and trust. They may take the form of cash, a credit against a payment account, or a gift card for future use with the same merchant.