What You Need to Know
The invoice must have a negative balance before a refund can be issued.
Shepherd does not allow a refund to be issued from a paid, balanced invoice. The invoice must be modified first — by returning a product, applying a discount, or removing a line item — to create the negative balance.
Voids and refunds are not the same thing.
A void cancels a payment before the batch has settled — the client is never billed. A refund returns funds after settlement. Shepherd Pay determines which applies automatically based on batch status. If the batch is still open, a void is processed. If the batch has already closed, a refund is processed and funds are returned to the client's card, typically within 3–5 business days.
Surcharge fees are automatically included in refund calculations.
When the original payment included a surcharge, you do not need to calculate or enter the surcharge amount separately — Shepherd Pay handles it.
Refunds for payments processed before Shepherd Pay was active require a manual portal step.
After creating the negative balance in Shepherd, the refund must be issued through the Gateway Portal and then recorded back in Shepherd. See the Pre-Shepherd Pay Refunds section below.
Quick Start Guide
To refund a Shepherd Pay card payment:
Open the invoice containing the item or service being refunded
Create a negative balance by returning a product, applying a discount, or removing a line item
Click Issue Refund
Toggle Shepherd Pay on
Select the original Shepherd Pay payment to refund against
Enter the refund amount
Click Check Out
Shepherd Pay determines automatically whether to process a void or a refund based on the current batch status.
Situation | Where to process | How to record |
Original payment was Shepherd Pay and batch open | Shepherd void | Automatic |
Original payment was Shepherd Pay and batch closed | Shepherd refund | Automatic |
Original payment was before surcharge activation | Gateway Portal | Record in Shepherd with Shepherd Pay off |
Original payment was before Shepherd Pay | Gateway Portal / legacy processor | Record in Shepherd with Shepherd Pay off |
Video Walkthrough
Step 1: Create a Negative Balance
Before issuing any refund, the invoice must reflect a negative balance. Choose the method that fits the situation.
Return a Product
Use this when a client is returning a physical item they purchased. The return removes the item's value from the invoice and creates the negative balance needed to issue a refund.
Before a product can be returned, a payment must have been made and the invoice must be in Checked Out status.
Open the invoice that contains the item being returned
Locate the product in the invoice line items
In the Return Quantity column, enter the quantity being returned
Check Restock Item if the product should be added back to inventory
Click Return Items, located below the Take Payment button
When prompted, select where to attach the return:
If an active invoice exists, you can add the return to it
If no active invoice exists, select Create New Invoice to generate one specifically for the return (creating a new invoice is generally the better option)
Click Return
The negative balance will appear on the invoice the return was attached to — not on the original invoice. Open that invoice to proceed to Step 2.
Apply a Discount
Use this when you are reducing the amount a client owes — for example, as a courtesy adjustment or correction — without returning a physical item.
Open the invoice
Locate the line item to be discounted
Apply a discount to that item or to the invoice total
Confirm the invoice now shows a negative balance before proceeding
Remove or Cancel a Line Item
Use this when a service or product was added to the invoice in error, or when a planned service was cancelled before it was performed.
Open the invoice
Remove or cancel the relevant line item
Confirm the invoice now shows a negative balance before proceeding
Step 2: Issue the Refund
Once the invoice shows a negative balance, you can issue the refund. The workflow differs depending on whether the original payment was processed through Shepherd Pay.
Standard Shepherd Pay Refund (or Void)
Use this workflow for any payment originally processed through Shepherd Pay.
Open the invoice with the negative balance
Click Issue Refund
Toggle Shepherd Pay on
Select the original Shepherd Pay payment to refund against
Enter the refund amount
To refund the full amount, leave the field as populated
To issue a partial refund, enter the partial amount
Click Check Out
Shepherd Pay determines automatically whether to process a void or a refund based on the current batch status. No additional action is needed.
Users need the Refunds (Process) permission enabled in their role to issue monetary refunds. A user may be able to return items without this permission but will not be able to issue money back to the client until it is enabled. Contact your Shepherd admin to update role permissions.
Voiding a Payment
A void cancels a Shepherd Pay transaction before it has settled. The client is never billed and no funds move. Voids are only available while the transaction is still in an open batch — once the batch closes, the transaction has settled and must be refunded instead.
Shepherd Pay determines automatically whether a void or refund applies when you follow the standard workflow above. However, if you need to void a payment directly:
Open the client's invoice
Navigate to the Payments section
Locate the Shepherd Pay payment
Click the three dots (⋮) under the Actions column
Select Void
Confirm by selecting Yes in the popup
Once voided, the payment is removed and the invoice balance is restored to outstanding. The client is not charged.
Voiding is controlled by user permissions. If you do not see the void option, contact your Shepherd admin to confirm your role includes this permission.
Refunds When a Surcharge Was Applied
If the original payment included a surcharge fee, the surcharge is factored into the refund automatically.
For a full refund, the full charged amount including the surcharge is returned to the client
For a partial refund, the surcharge is recalculated proportionally on the refunded amount
You do not need to calculate or manually adjust for the surcharge.
If the original payment predates surcharge activation at your clinic, follow the Pre-Surcharge Refund workflow below instead of the standard workflow.
Pre-Surcharge Refunds
Use this workflow when the original payment was processed through Shepherd Pay before your clinic activated surcharge fees. These payments have no surcharge component and cannot be refunded through the standard in-Shepherd workflow.
Step 1: Create a Negative Balance in Shepherd
Follow the same process as above — return the product, apply a discount, or remove the line item to create a negative balance on the invoice.
Step 2: Issue the Refund in the Gateway Portal
Log in to the Shepherd Pay Gateway Portal
Navigate to Transaction Search and locate the original transaction
Select the transaction and click Refund
Enter the refund amount and confirm
Step 3: Record the Refund in Shepherd
After completing the portal refund, return to Shepherd to close the loop on the invoice.
Open the invoice with the negative balance
Click Issue Refund
Toggle Shepherd Pay off
Select Credit Card as the payment method
Enter the refund amount
Click Check Out
This step is required to keep Shepherd's financial records accurate and ensure the refund appears correctly in reporting.
Pre-Shepherd Pay Refunds (Legacy or Migrated Payments)
Use this workflow when a client needs a refund for a card payment that was processed before your clinic was on Shepherd Pay — for example, payments taken on a previous processor that were migrated into Shepherd.
These payments have no associated Shepherd Pay transaction to refund against, so the portal is used to return funds to the card, and Shepherd is updated to reflect the refund.
Step 1: Create a Negative Balance in Shepherd
Return the product, apply a discount, or remove the line item on the invoice to create a negative balance. See Step 1 above for full instructions.
Step 2: Issue the Refund in the Gateway Portal
Log in to the Shepherd Pay Gateway Portal
Navigate to Virtual Terminal
Process a credit for the appropriate amount to the client's card
Note the transaction ID from the confirmation screen
Step 3: Record the Refund in Shepherd
Open the invoice with the negative balance
Click Issue Refund
Toggle Shepherd Pay off
Select Credit Card as the payment method
Enter the refund amount
Click Check Out
Frequently Asked Questions
Why is my refund going back to outstanding instead of being returned to the client?
This happens when Issue Refund is used on an invoice that does not yet have a negative balance. Return a product, apply a discount, or remove a line item first to create the negative balance, then issue the refund.
Why don't I see the Issue Refund option?
The Issue Refund option only appears when the invoice has a negative balance and your user role includes refund-processing permission. If the invoice has a negative balance but the option still isn't visible, contact your Shepherd admin to confirm the Refunds (Process) permission is enabled on your role.
How do I confirm a refund was processed?
Check the client's profile under Financial Tab > Payments. You can also open the client's Activity Log — click the zig-zag arrow in the top right of the client profile and search for "Refund" or the client's email address. Each entry shows the full details and time it was processed.
How long does a refund take to appear on the client's card?
Refunds typically appear within 3–5 business days after the batch closes. This timeline is determined by the client's card issuer, not by Shepherd Pay.
Can I refund to a different card than the one originally charged?
Refunds through Shepherd Pay must be returned to the original card. If the client no longer has access to that card, contact merchant@shepherd.vet for guidance.
Who do I contact if a refund or void is not working?
For invoice or workflow questions, contact Shepherd Support via the in-app chat. For Shepherd Pay transaction issues, portal errors, or merchant account questions, contact merchant@shepherd.vet.
A client filed a chargeback — what do I do?
Chargebacks are disputes initiated by the client's bank. Contact merchant@shepherd.vet as soon as possible to begin the dispute response process. You will typically need to provide supporting documentation such as the signed invoice or payment receipt.