Follow the steps below to record a credit card charge that was disputed, commonly called a charge back.

To record a credit card charge back with no associated returns or sales then you should create an unassociated refund to the customer’s account. You must have a cash drawer open and change your processing date back to the date that the charge back happened then:

  1. Go to the Customers>Payment/Refunds screen and select the “Refund” button
  2.  Enter in the amount of the Credit Card charge back amount in the “Refund” field.
  3.  Select the Method of refund as your credit card type. 
  4.   Select the cash drawer
  5.  If you wish, enter a note in the memo field explaining the refund.
  6. Uncheck any items selected in the grid view showing all open transactions.
  7. Then select “Save Refund” button.
    • You will receive a message box that says: Confirm: 0.00 of your refund has not be applied to any transactions.  Do you want to continue?
    • You will click on “Yes”
  8. Next you will see the Process Credit Card screen and you will choose the “Bypass Processing” button. 
    •  Another screen will come up saying; Confirm Bypass and your options are “Yes” or “No”.
    • Please select yes.
  9. Another screen will come up saying successfully saved refund.
  10. Your customers Payments/refunds screen will show this refund but it will not affect the customer balance. NOTE: Unassociated refunds do not create any transaction. They post a Credit to the Bank GL and a Debit to the default refunds GL in the accounting defaults

Now that you have recorded the payment out of the bank account, charge this amount to bad debt

  1. Create a statement charge with a reason code that is the same as the refund reason you used for the un-associated refund.
    • Administration>Accounting>General Setup>Statement Charge Reasons
  2. Then create a credit memo with a credit memo reason code assigned to Bad Debt.
    • Administration>Accounting>General Setup>Credit Memo Reasons
  3. Apply the credit memo to the statement charge.