Refunding a cancelled trip paid online
A client paid for a trip online and then cancelled. How a travel business credits the invoice, refunds through the gateway and records it.
By Achekam · · 4 min read · For Travel businesses in South Africa, Nigeria, Kenya
The booking was paid on the pay link weeks ago. Now the client has phoned: a family emergency, a visa that did not come through, a change of heart. They want their money back, and they want to know when.
Refunds in travel are rarely all or nothing. Some of the trip may be refundable by the supplier, some not; your own service fee may or may not be returned under your terms; and the client may prefer a credit towards another trip. On top of that, the money did not come in through your bank: it came through a payment gateway, and it has to go back the same way.
This article sets out the order that keeps the client, the gateway and your books in step.
First, what do your terms allow?
Before you touch the books, settle the amount. Read the booking terms the client accepted, then check with each supplier what they will return. The answer usually splits the invoice into three kinds of line:
- parts the supplier refunds in full
- parts the supplier keeps, which your terms pass on to the client
- your own fees, refundable or not under your terms
Put the figure in writing to the client before refunding anything. A refund made before the amount is agreed is the one most likely to be disputed later. If your terms are vague about cancellations, that is the first thing to fix; see standard booking terms filled in for each traveller. In South Africa, check those terms against section 17 of the Consumer Protection Act, which covers a consumer's right to cancel an advance booking and the cancellation charge a supplier may keep.
Credit the cancelled lines
In Achekam, a credit note is issued from the invoice it corrects, either in full or for chosen lines. There is no credit note without an invoice, so every credit always points back to the booking it reverses.
For a cancelled trip, credit the lines that are being refunded and leave the rest. If the supplier keeps the deposit on accommodation and your service fee stands, those lines stay on the invoice; the flights and transfers the client is getting back are credited. The credit note posts to the ledger, can be downloaded as a PDF or e-mailed to the client, and uses the original invoice's date and tax codes, so the VAT reversed matches the VAT charged.
This works best when the invoice was built line by line in the first place. One line called "Trip to Zanzibar" cannot be partly credited by choosing lines. Separate lines for flights, accommodation, transfers and your fee can.
Make the refund where the money is
When the client paid online, the gateway confirmed the payment and Achekam recorded it as a receipt against the invoice, debiting that gateway's clearing account. The refund has to go back through the same gateway.
Achekam does not send an online invoice refund through the gateway itself. You make the refund in the gateway's own dashboard, whether that is Paystack, Flutterwave, Pesapal, PayFast or another provider, and a person then records it in Achekam. Keep the gateway's refund reference: it is the link between what happened at the gateway and what your books say.
Two practical points. Check the gateway's own rules on refunding fees, which differ by provider. And make the refund to the card or account the client paid from, unless you have a good reason and a written instruction to do otherwise.
Record the refund in the books
Once the gateway shows the refund as made, record it in Achekam. Customer receipts can be re-allocated, and an administrator can refund or reverse a receipt. Record the refund against the client's receipt, and keep the gateway's refund reference with your records for the booking.
A quick check afterwards:
- The credit note covers the cancelled lines.
- The refund recorded matches the amount refunded at the gateway.
- The invoice no longer shows a balance owing or a credit you did not intend.
- The gateway's payout to your bank reflects the refund.
That last check belongs to the payout reconciliation; matching gateway payouts and fees to your books covers it.
Or keep the credit for the next trip
Many clients who cancel would rather rebook than take the money back. In that case there is nothing to refund. When a credit note leaves more credit than the invoice needs, the leftover is held for the customer, and a customer's extra payment is likewise held on their account. When they book again, the credit is there to use against the new invoice.
Confirm the arrangement in writing, including how long you will hold the credit. Your terms should say what happens if the client never rebooks.
At the counter it is different
Some travel businesses also sell at a counter through a till: travel insurance, luggage, a walk-in day tour. Till refunds follow different rules from invoice refunds. Refunds of Paystack, Flutterwave, Stripe and Pesapal till payments are sent back through the provider from the till, while PayFast, Ozow, Peach and M-Pesa refunds are made in the provider's own portal and recorded at the till with a reference.
So a counter sale and an online booking paid through the same gateway may be refunded in two different places. Make sure staff know which one they are dealing with before they start.
Next time a client cancels
Agree the amount, credit the right lines, refund in the gateway, record it with the reference. If your clients pay in shillings through Pesapal, card and mobile-money payments through Pesapal explains how those payments arrive in the first place.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
