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Issue credits and refunds or apply deposits

Last updated July 23, 2026

Purpose and common uses​

Use credits, refunds, and deposits to correct or apply customer funds without changing the original work record. Choose the action that matches what happened financially.

Before you begin​

Confirm the invoice, customer, current balance, original payment, amount, reason, and your approval authority. A credit reduces what the customer owes; a refund returns money; a deposit applies funds held for the customer.

Open the credit or refund form​

  1. Open the invoice.
  2. Click Issue Credit or Refund in Quick Actions.
  3. Under Action, choose Give Customer Credit or Refund Money.
  4. Review Current invoice balance and the estimated tax portion reversed.
  5. Enter the Amount and Reason.
  6. For a refund, choose Square original payment, Check, Cash, or Other as available.
  7. Add notes.
  8. Review the summary and submit.

Select Refund Money only when funds are actually being returned to the customer.

Apply a credit or deposit​

  1. Click Apply Credit or Deposit.
  2. Under Action, choose Apply Existing Credit, Apply Existing Deposit, or Record & Apply Deposit.
  3. Select the Credit Memo or Customer Deposit when using existing funds.
  4. For a new deposit, choose Payment Method and enter a Reference.
  5. Enter Amount to apply.
  6. Add Notes.
  7. Submit and confirm the invoice balance changes.

The maximum application prevents applying more than the available funds or invoice balance.

What happens next​

The invoice balance and accounting views reflect the saved action. Unused credit or deposit value remains available to the customer when applicable.

Troubleshooting​

Square refund is unavailable​

The invoice must have an eligible original Square payment. Choose the actual refund method used or review the original payment.

No credit or deposit appears​

Confirm the funds belong to the same customer and still have an unapplied balance.

The amount cannot be submitted​

Enter a positive amount no greater than the displayed maximum and complete required reason, method, or reference fields.