Void vs Refund (and what "Reverse Transaction" actually does)

Modified on Thu, Jun 4 at 2:49 PM

When a transaction needs to be reversed, DealerWorks uses a single action called Reverse Transaction. What actually happens behind the scenes — a void or a refund — depends on when you initiate the reversal. This article explains the difference and what to expect.

The Core Difference

	Void	Refund
What it is	The charge is cancelled before it settles — it never actually posts to the customer's account.	The charge has already settled. A new, separate credit is issued back to the customer.
When it happens	Same day as the transaction, before end-of-day settlement.	Any time after the transaction has settled (typically the next business day or later).
How long it takes	1–5 business days to drop off the customer's statement (authorization may disappear sooner).	5–10 business days for the credit to appear on the customer's card statement.
In DealerWorks	Transaction status changes to Voided.	Transaction status changes to Refunded.

How "Reverse Transaction" Works in DealerWorks

DealerWorks does not ask you to choose between a void and a refund. When you select Reverse Transaction, the system determines which one applies based on whether the transaction has settled yet.

You initiate the same action either way. What changes is the outcome — and the timeline for when the customer sees the money returned.

Step 1

Go to the transaction in Reporting

Go to Reporting → Transactions. Find the transaction and click the three-dot menu on its row. Select Reverse Transaction.

Step 2

Enter the amount and a Credit Memo reason

A modal will appear. Enter the Reverse Amount (defaults to the full transaction amount) and a reason in the Reason (Credit Memo) field. Then click Refund Transaction.

Note: The Reason (Credit Memo) field is required. It creates a record of why the reversal was made and is used for accounting purposes.

Step 3

The system processes the void or refund automatically

DealerWorks determines whether this is a void or refund based on settlement status. The transaction status will update to Voided or Refunded accordingly. No further action is needed.

Important — Reverse Transaction only appears on Approved transactions. It will not appear on transactions with a status of Error, Failed, or Declined. Those transactions were never charged, so no reversal is needed.

Rules by Payment Method

Payment Method	Reversal Rules
Credit / Debit Card	Use Reverse Transaction at any time after approval. Void if same day; refund if settled. Card refunds take 5–10 business days to appear.
ACH Direct Debit	Wait 5 business days after the payment date before using Reverse Transaction. The transaction must fully settle before it can be reversed. After reversal, the return takes 3–5 business days.
Cash	Cannot be reversed through DealerWorks. Return the cash to the customer manually and record the correction according to your dealership's cash-handling process.
Check	Cannot be reversed through DealerWorks. Handle corrections manually and coordinate with your accounting team.

What to tell the customer

If voided: "The charge was cancelled before it posted. It may take 1–5 business days to drop off your statement depending on your bank."
If refunded: "A credit has been issued to your card. It typically takes 5–10 business days to appear on your statement."
If ACH: "We need to wait until the payment fully clears before we can process the return. Once we do, it takes 3–5 business days for the funds to return to your account."