Refunding a Paystack payment on an invoice
How a Nigerian business refunds a customer's Paystack invoice payment in full or in part, how long the money takes, and how to record it.
By Achekam · · 4 min read · For Running a business businesses in Nigeria
A customer paid your invoice through Paystack, and now part of the job is cancelled, or the goods came back, or they paid twice. They want their money, and they want to know when it will arrive. You want to refund the right amount once, and to have books that still make sense afterwards.
Refunds touch two systems: Paystack, which holds and returns the money, and your books, which have to show that the invoice is no longer fully paid. This article covers what Paystack's documentation says about full and partial refunds, how long they take, what happens when one fails, and how a Nigerian business records the result in Achekam.
Full or partial, never more than was paid
Paystack's documentation says a refund is started against the original transaction, using its ID or reference. A refund request without an amount is treated as a full refund; a partial refund needs an amount. It also says a refund amount must not be more than the original transaction amount.
Two practical rules follow:
- Decide the amount before you start. If only part of the invoice is being refunded, enter the amount. Leaving it blank refunds everything.
- Refund against the payment that was made. If a customer paid twice, refund the duplicate transaction, not the first one, so that your records and Paystack's line up.
If a customer is owed more than one transaction's worth, for instance after paying in two parts, each refund goes against its own transaction.
When Paystack needs the customer's bank details
Some refunds cannot go straight back to the card or account that paid. Paystack's documentation says that when a refund needs attention because the customer's bank account was not returned, the customer's bank account details must be supplied to retry it. Any valid account belonging to the customer may be used, even one different from the account that paid.
So if a refund stalls, ask the customer for an account in their own name. Do not accept "send it to my brother's account": the documentation speaks of an account belonging to the customer, and paying a third party creates a dispute you do not need.
How long the customer waits
Paystack's documentation says that even after a refund is marked as processed, it may take up to 10 business days for the customer to receive the funds.
Tell the customer that at the start. "Processed" on your screen does not mean the money is in their account, and a customer who hears nothing for a week will assume nothing happened. Give them the date you processed it, the amount, and the reference.
A refund that fails comes back to you
According to Paystack's documentation, when a refund cannot be processed, your Paystack account is credited with the refund amount and the transaction's status returns to Success. While a refund is pending, processing or needing attention, the transaction shows Reversal Pending; once processed it shows Reversed.
That sequence matters for your books. A refund you recorded as done may later turn out to have failed, with the money back in your Paystack balance and the customer still unpaid. Check the transaction's status before you treat a refund as finished, and again a few days later.
Paystack sets out refund types, limits, statuses and timing on its refunds documentation page.
Where the refund is made: invoice or till
Achekam handles the two kinds of Paystack payment differently.
Invoice payments. A refund of an online invoice payment is not sent through the gateway by Achekam. It is made in Paystack's own dashboard and then recorded in Achekam by a person.
Till payments. At the till, Achekam refunds Paystack payments through Paystack's own API, as it does for Flutterwave, Stripe and Pesapal, while M-Pesa, PayFast, Ozow, Peach and bank EFT refunds are recorded by the cashier with a reference. A provider refund counts as completed only on the provider's own confirmation.
So for an invoice, there are always two steps and two places: Paystack first, then Achekam.
Keeping the books right: credit note or refund
The refund in Paystack returns money. The books also need to show why.
Credit note. A credit note is issued from the invoice it corrects, in full or for chosen lines, posted to the ledger, and can be downloaded as a PDF or e-mailed. Leftover credit is held for the customer. There is no credit note without an invoice. Use one when the sale itself is reduced: goods returned, a service cancelled, a price agreed down.
Refunding the receipt. Customer payments are recorded against invoices, and administrators can refund or reverse a receipt. Use this when money goes back for a reason that does not change the sale, such as a duplicate payment.
Often you need both: a credit note to reduce the invoice, and a refund to return the cash that the credit freed up.
A refund in order
- Agree the amount and reason with the customer.
- Issue a credit note for the lines affected, if the sale is reduced.
- Process the refund in the Paystack dashboard against the right transaction, entering the amount for a partial refund.
- Record the refund in Achekam by an administrator, with Paystack's reference.
- Tell the customer the amount, the reference and that it may take up to 10 business days.
- Check the status again later; if the refund failed, contact the customer for an account in their name.
Refunds and chargebacks also appear as deductions on payouts; Paystack reversals and chargebacks in your books explains how to read them. For the collection side, see collecting naira payments.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
