Returning a payment to your guest could be processed as either a reversal or a refund. Both result in the money going back to the guest, but the process depends on where the payment is in its lifecycle.
Understanding the difference helps set the right expectations for both you and your guests.
What is a Reversal?
A reversal occurs when a payment is cancelled before it has fully cleared. With NightsBridge Pay, reversals can be processed until 22:00 on the same day of the original transaction.
Until 22:00 daily, the funds are still 'in transit' and have not settled with NightsBridge Pay. When processing a reversal, the transaction is simply stopped, and the money never reaches your account.
What this means for your property:
- The funds do not settle to you.
- Reversals are usually processed quickly.
- No refund transaction is created.
Card Fees for Reversals
Since the original transaction never settles, there will be no transaction fee/bank charge.
Because of this, the option to 'Reverse LESS card free' is not an available option for reversals.
Partial Reversals
Partial reversals, regardless of whether they're processed before 22:00 on the day of the original payment, will always be processed as a refund and not a reversal.
Since the amount returned does not match the original payment, the original transaction is not voided and the partial reversal is processed as a new transaction. The original transaction for the full amount will settle with your payment gateway and the guest will receive their partial refund.
A reversal can be processed until 22:00 on the same day of the payment.
What is a Refund?
A refund occurs after a payment has already cleared and the funds have settled to your account.
Because the payment has already been completed, the funds need to be sent back to NightsBridge to complete the refund. Processing times are determined by the banks involved.
What this means for your property:
- The funds have already been received by you
- The refund is processed as a separate transaction
- Refunds can take several business days to reflect for the guest
- Partial or full refunds may be possible, depending on the situation
Card Fees for Refunds
Since a refund returns the funds after the original transaction has cleared, card fees would have been applied and the option to 'Reverse LESS card free' will be an available option for refunds.
Update your Terms and Conditions
If you decide not to return the bank costs when processing a refund, be sure to inform guests that this is your refund policy, before they book, by adding it to your Terms and Conditions.
Here's an example of the type of information to include within your Terms and Conditions on NightsBridge:
- Any fees charged by banks or payment gateways for processing a transaction are not refunded in the event of a cancellation or refund.
A refund will be required after 22:00 on the same day of the payment.
Why Timing Matters
Whether a payment can be reversed or must be refunded depends entirely on how quickly the issue is identified:
- If the payment has not yet cleared, a reversal may be possible.
- If the payment has already cleared, a refund is required.
Both processes are secure and handled through NightsBridge Pay.