Step by Step:

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:

Step 1: Go to the Customers>Payment/Refunds screen and select the “Refund” button

Step 2: Enter in the amount of the Credit Card charge back amount in the “Refund” field.

Step 3: Select the Method of refund as your credit card type. 

Step 4: Select the cash drawer

Step 5: If you wish, enter a note in the memo field explaining the refund.

Step 6: Uncheck any items selected in the grid view showing all open transactions.

Step 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”

Step 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.

Step 9: Another screen will come up saying successfully saved refund.

Step 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:

Step 1: Create a statement charge with a reason code that is the same as the refund reason you used for the unassociated refund (Administration > Accounting > General Setup > Statement Charge Reasons).

Step 2: Then create a credit memo with a credit memo reason code assigned to Bad Debt (Administration > Accounting > General Setup > Credit Memo Reasons).

Step 3: Apply the credit memo to the statement charge.