Explanation:
Merchants using Magento may encounter an issue where the refunded amount does not get sent to Afterpay when processing a refund via a credit memo that includes an adjustment refund. This behavior is intentional due to how Magento and Afterpay handle refunds.
Please refer to the Action section to further understand and resolve the challenge.
Actions:
Please review and follow the various reasons and solutions below:
1. Adjustment Refunds Are Platform-Only and Not Passed to Afterpay
In Magento, when you issue a refund using a credit memo, you have the option to enter:
- Adjustment Refund: An additional amount you want to give back to the customer that is not tied to any specific item.
- Adjustment Fee: An amount you want to retain or deduct from the refund.
However, Adjustment Refunds are not part of the original transaction line items and are treated as offline amounts. As a result, these are not communicated to Afterpay, which only processes refunds based on actual order items and taxes.
Example: If you refund $100 for an item and add a $10 adjustment refund in Magento, only the $100 will be sent to Afterpay, and the customer will not see the extra $10 reflected in their Afterpay account.
2. Afterpay Only Accepts Itemized Refunds
Afterpay’s API only allows merchants to refund:
- Specific order items (partial or full)
- Associated taxes and shipping
It does not support arbitrary adjustment amounts. This is a safeguard to ensure refund accuracy and consistency with the installment plan structure.
3. How to Handle Adjustment Refunds Properly
If you need to issue an additional refund beyond the item value (e.g., to compensate for inconvenience), you have two options:
- Process the item refund via Magento/Afterpay as usual, and then
- Manually issue the additional amount using an alternative method (e.g., direct bank transfer, store credit, or offline refund)
4. Avoid Misleading Totals in Magento
While Magento allows adjustment refunds to be entered for customer-facing purposes, be aware:
- The displayed total refund in Magento may be higher than what the customer receives via Afterpay.
- This can cause confusion unless merchants clarify that the adjustment is handled separately.
5. Use Online Credit Memos to Ensure Sync with Afterpay
To ensure Afterpay processes refunds accurately, always issue refunds via Magento’s online credit memo workflow. This ensures the refund request is properly routed to Afterpay's API and avoids missed or partial refunds.
Learn how to issue an online credit memo here: Adobe Commerce - Create a Credit Memo.
Recommendations:
- Avoid using “Adjustment Refund” for Afterpay credit memos unless you plan to issue the amount through other means.
- Always refund via item-based online credit memos in Magento to ensure compatibility with Afterpay.
- Manually process additional refund amounts when needed, using offline or alternate methods.
- Clearly inform customers when part of their refund (e.g., adjustments) will be handled outside of Afterpay.
- Refer to Magento’s official Credit Memo guide for proper refund workflows.
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