Refunds are a fact of restaurant life. A dish comes out wrong, a card gets tapped twice at the terminal, a guest cancels a pickup order after paying online. Square POS makes issuing a refund quick, but a few rules — the refund window, the fee policy, and who on your team can press the button — catch Canadian restaurant owners off guard. Here is how to do it right.
Two things to know before you refund
You have 120 days. Square's Canadian payment terms allow refunds within 120 days of the original transaction date. Miss that window and Square can't process it — you'd have to make it right another way, like a gift card or cash.
Square keeps the processing fee. Your guest gets back 100% of what they paid, but you don't get Square's processing fee back on a refunded transaction. It is a small amount per refund, but if you process a lot of them, it adds up — worth factoring into your refund policy.
Issue a refund from the Square for Restaurants POS app
This is the everyday flow — a server flags a problem mid-service and a manager fixes it on the spot:
1. Open the Square POS app and tap Orders (or Transactions). 2. Find the order — search by date, item, or the last four digits of the guest's card. 3. Open the order and tap Issue refund. 4. Choose a full refund, select specific items, or enter a custom amount. 5. Add a reason and confirm. Done.
The refund goes back to the original payment method. One Canada-specific note: Interac debit refunds need the original card present, so handle those at the device where the guest can tap or insert it — not from the back-office Dashboard.
Issue a refund from the Square Dashboard
Handy when the guest calls about last week's charge and nobody is at the terminal:
1. Sign in to your Square Dashboard and go to Orders & payments (or Payments) > Orders > Transactions. 2. Click the payment you want to refund, then click (•••) > Issue Refund. 3. Choose Refund Items (pick the items, then Refund items) or Refund Amount (enter an amount and a reason), then Issue Refund.
Control who on your team can issue refunds
Only account owners and team members with the transactions permission can issue refunds — you manage this in the Square Dashboard under your team settings. For restaurants, the best practice is simple: give refund access to managers only, and have servers ask the manager on shift to process one. It prevents accidental refunds and keeps every refund traceable to someone accountable.
Where the money comes from — and when the guest sees it
Square draws the refund from your Square balance first. If your balance doesn't cover it, Square debits the remaining amount from your linked bank account — so check your balance before issuing a large catering refund. The refund processes immediately in Square; the money usually shows up in the guest's account within a few business days, depending on their bank.
What about refunds with no receipt?
Guests lose receipts. Sales happen through other channels. For those cases Square supports unlinked refunds from the POS app: tap Transactions > Unlinked refund, pick items or enter a custom amount, choose card, cash, or gift card, and add a reason. Because there is no original transaction to verify against, keep this permission tight and set refund limits per mode in Settings > Modes > Manage > Payment. Square itself flags that unlinked refunds carry fraud risk, so treat the feature accordingly.
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Refund steps based on Square's official Canada support documentation (squareup.com/help/ca/en) and Square Canada payment terms.