|Blog June 2020|
Handling Mass Event Refunds
In this time of the Coronavirus pandemic, all associations are finding themselves in the unusual situation of having to process mass refunds for cancelled events. Registration systems and credit card processors are designed to efficiently process registrations and payments. The money and registration information work together seamlessly communicating payment information back and forth. But many of these systems are not set up to efficiently handle mass refunds and cancellations of registrations. This forces associations to develop their own process to handle mass refunds. As always, the goal is to make the process as quick and easy for the customer as possible.
Many registration systems cannot process refunds directly. Instead, associations are forced to go directly to the credit card processor to process refunds which creates a disconnect between the registration and the credit card processor. There is no way from the registration system, to determine if a refund has been processed. To solve this problem, the accounting team needs to develop procedures to accurately track refunds and establish a link between the registration system and the credit card processor so that both systems are in sync. This allows everyone on the team to answer questions about the status of refunds and know what has been done.
The first step in the process is to determine what type of refunds will be allowed. Some associations want everyone to be refunded the full amount and be done with the refunds as quickly as possible. Other associations want to give customers the option of receiving a full or partial refund, deferring the registration fee to another meeting or making a donation to the organization.
The full refund with no other options is the easiest and quickest way to process mass refunds. I recommend the following steps for the full refund process:
The refunds with options are more time consuming. How these are handled depends on your registration system, database and credit card processor. I recommend the following steps for the refunds with options process:
These systematic procedures will simplify the refund process, make it easy for everyone on your team to know what has been done and allow everyone to respond to customer questions about refunds.
McKenna Management’s accounting team processed thousands of refunds for our client associations’ in-person events during the COVID-19 pandemic. At the same time, members of our team worked with our clients to recapture lost income by developing innovative virtual events to keep members engaged and to help bring in revenue for the associations during this challenging time. In good times and in bad times, it is always prudent for associations to have clear processes outlined, especially for financial activities.
Michele Sperry is a Staff Accountant at McKenna Management, Inc., an association management company based in Westford, Massachusetts. She enjoys assisting clients with the budgeting process and financial performance analysis.