Sometimes it can be difficult to determine if a transaction is a Refund or a Reversal. Below are descriptions and factors to keep in mind when trying to decide.
Reversals usually are due to circumstances outside of the committee's control. Examples of these instances can include when a donor's check bounces, when a donor's check was actually lost in the mail, or the check was not cashed within the required time limit set by the issuing bank (typically 90/180 days).
Refunds occur when something has changed. This can be when, perhaps, the donor changed their mind, the donor went over transaction limits, or the item was purchased and then returned.
Another general rule to keep in mind: If the payment in question was deposited into the account, it would be a refund. If it was not deposited, it would be a reversal.