Cancelling part of an order or accepting shipped items back usually means you need to return money to the customer. You can refund the paid amount to the original card or bank account, or keep it as store credit for a future purchase. The Cancel Order dialog and Return Items dialog ask the same two payment questions before you finish. This article explains those choices and what Orders & Inventory does after you answer them.
What This Does
When you cancel or return lines that were invoiced and paid, Orders & Inventory calculates how much of the payment belongs to the units you are undoing. It then either refunds that amount to the original payment or keeps it as store credit, depending on the option you choose. Orders & Inventory also creates a credit memo for each affected invoice, so the invoice shows the corrected lower total.
Your choice applies to the entire cancellation or return. You cannot refund some lines and issue store credit for others in the same action. If you need both, process them as separate cancellations or returns.
You remove a purchased item by cancelling its order line from the order record, not by cancelling an invoice line directly. Cancel the product from the order, and Orders & Inventory applies the resulting credit memo to the invoice for you. Use this cancellation flow when you need to refund or credit money that has already been paid. If you only need to clear a balance due and no refund is involved, open the invoice and apply a credit memo there instead.
Before You Begin
Prerequisites
- The lines you are undoing must already be invoiced, with a payment applied to those invoice lines, before there is anything to refund or credit. If nothing was paid on those lines, Orders & Inventory creates only the credit memo.
- If you cancel a mix of paid and unpaid lines in one action, the refund or credit includes only the amount actually paid on the lines you are undoing. Lines that were never paid get only a credit memo, and the order can still show a balance due for anything else that remains unpaid.
- Cancellation and refund depend on Orders & Inventory recognizing that a payment is linked to the invoiced lines you are undoing. A record can look paid and still have no refund or credit available if that link is not recognized; see What to Do If It Fails.
- You need the permission your account requires to cancel or return orders. That same permission also covers the refund or store credit choice.
- This works the same way in your sandbox as in your live account, including issuing store credit, so you can practice a cancellation safely before doing it for real.
Choose Refund or Store Credit
- Open the Cancel Order dialog or the Return Items dialog for the order, as described in their own articles.
- Answer How should we handle any payments that have been made on the items you are cancelling/returning? with one of these options:
- Issue refunds for any applicable payments made on items being cancelled/returned — sends the money back to the payment that was used.
- Issue store credit that can be used for future purchases — keeps the money with the organization as credit the customer can spend later.
- If you are cancelling, not returning, and you chose to issue a refund, you can also check Do not perform electronic refund. This records the refund without asking the payment gateway to move money, which helps when the money was already returned outside Rhythm. This option is not available in the Return Items dialog; when you choose a refund for a return, the refund is always sent to the gateway.
- Answer What should we do if the refund can't be processed by the payment gateway? to choose whether a gateway refusal should still let the cancellation or return continue.
- Finish the rest of the cancellation or return, then process it.
Result
- Refund. The money applied to the undone units is sent back to the same payment, up to the amount that payment still holds. If the payment was made with store credit, the credit goes back to the customer directly instead of through the payment gateway.
- Store credit. The same amount is kept as credit for the order's bill-to party, which may be different from the person or organization that made the payment. Store credit cannot be limited to specific product types, so it is not a good fit when the funds must be used only for something specific, such as event registrations.
- Either way, each invoice line you undid gets its own credit memo, which reduces what that invoice bills.
Warning
Issuing a refund by itself does not cancel the order. Refund and cancellation are separate actions, so if you refund a payment without also cancelling or returning the lines, the order can still show an open balance. After a partial refund, the order's status can also still show as open. To make a refunded order payable again without cancelling it, open its invoice and accept payment again; that reinstates the order.
You can also issue a refund without cancelling anything, such as when you need to correct an overcharged shipping amount. Open the order's payment page, choose Issue a Refund, and refund only the amount on the shipping line item instead of reversing the whole payment.
Tip
If a customer wants store credit instead of a refund, choose Issue store credit while you cancel or return the items. This is simpler than refunding the original payment separately and cancelling afterward, because the cancellation creates the credit and the credit memo together in one step. Choosing credit instead of a refund can also work better when you plan to re-create the order. Cancel the original with store credit, create the new order, and apply the credit toward its payment. The new order's invoice then shows as paid rather than cancelled.
Tip
Check Do not perform electronic refund whenever the money already moved outside the normal refund flow:
- The payment was already refunded outside Rhythm, and a normal cancellation will not go through because of it. Checking this box lets the cancellation complete, creates the credit memo, and clears the balance due without trying to move money that already moved.
- A duplicate charge was already resolved through a card dispute in the customer's favor. Cancel the duplicate order, choose refund, and check this box instead of sending a second electronic refund for the same money.
- A payment by ACH was later returned for non-sufficient funds. Check this box so Orders & Inventory does not try to send a refund to a bank account that already rejected the payment, and reconcile the difference in your finance records separately.
For a declined or NSF ACH payment, this option may not behave exactly the same way as reversing the payment directly. Confirm the payment's resulting status before assuming the cancellation did the wrong thing.
Limits on What Can Be Refunded or Credited
Orders & Inventory never refunds or credits more than a payment still holds. It compares the calculated refund with the payment involved. If the refund would be more than the payment has left, Orders & Inventory stops the whole cancellation or return instead of refunding a partial amount.
What to Do If It Fails
- "Unable to process cancellation" or "Unable to process return." The message that follows explains the reason. If it says the refund would exceed what a payment has left, lower the quantity you are cancelling or returning, or check whether that payment was already partly refunded elsewhere.
- The failure message appears, but the cancellation or return still shows as processed when you check it. This can happen when everything was recorded successfully, but a follow-up step, such as the confirmation email, did not go through. Open Cancellations and Returns for the order to confirm what was actually recorded before you process it again, so you do not create a duplicate.
- Cancel Order says no payment is associated with the order, even though the order was paid. In some order flows, the cancellation dialog can fail to recognize an existing payment and show this message, which means no refund will be generated. Try opening the invoice through Invoice Options › Edit Details › Update Details and saving it without changes; re-saving the invoice can restore the link between the invoice, order, and payment so the refund option appears again. If you proceed with Process Cancellation anyway, the refund can still complete successfully in the payment gateway despite the message, so check the payment before assuming nothing was refunded.
- Issuing store credit during a cancellation returns a validation error about a missing credit line item field, and no credit is created. This can indicate a problem with the cancellation rather than something you did wrong. Contact Support with the order number if retrying does not resolve it.
- Cancelling a paid membership order fails with an error about a credit memo record ID that already exists. In rare cases, this can leave the related invoices showing reopened with a balance due, refunds showing against the prior card payment, and the membership not cancelled. Check the order's invoices, payments, and membership status before retrying, and contact Support if the records look inconsistent.
- Cancelling an order tied to an installment schedule fails with a similar duplicate credit memo error. The cancellation can partially process: it may cancel some invoices and refund payments while leaving the remaining balance attached to an active installment schedule. Review the installment schedule and the order's remaining balance before retrying.
- The cancellation or return processed and a refund shows, but the related credit memo looks inconsistent, or the Console shows double the refunded amount. This can happen even though everything else in the cancellation completed normally. Check the actual refund in your payment records; the Console's displayed total is sometimes wrong even when the correct amount was refunded.