A Void is a financial operation that cancels a credit card transaction before it has settled. By voiding a transaction, the authorization is removed, preventing the transaction from ever appearing on the customer’s account. This is distinct from a refund, which reverses a transaction only after it has been settled.

Understanding the nuances between voids and refunds is critical for merchants, affecting both their accounting practices and transaction fees. Voids typically occur on the same day of the transaction, ideally before the batch of transactions is forwarded for settlement.

After settlement, a transaction cannot be voided; instead, a refund must be issued. Merchants might need to void transactions for a variety of reasons, such as a customer reversing their decision or a discrepancy in the transaction amount.

Grasping the difference between voids and refunds is vital for merchants aiming to manage their accounting and transaction fees efficiently. Voids act as a preventive measure, allowing merchants to cancel a transaction before settlement, which helps avoid unnecessary fees and ensures accurate financial records. Prompt action in processing voids is essential, enabling merchants to swiftly address issues like customer changes or errors in transactions.