I'm developing a system that has an accounting function that stacks together multiple payments (including refunds, which are just negative payments) for an order and comes out with a balance. Something that has been paid for fully has a balance of zero.

Mistakes do happen though and management wants to be able to make a gratuity refund. Akin to saying, "Here's some cash back for our mistake."

This is still technically a refund and goes through the same interface. The manager needs to pick between the two types of refund. One that affects the balance and one that doesn't.

But how do I indicate which does which?

Space is the issue here. I could write a little book explaining the difference —and it will be covered in documentation— but my question here is really, what's the shortest way of describing the above. It has to fit in a little drop down.

So I'm looking for something that fits for one of the following formats:

<type of refund> Refund
Refund (<type>)
<another word that still indicates money going back to customer>
  • Compensation, Reparations, Restitution, or some synonym in that constellation. – Dan Bron Mar 22 '16 at 12:31
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    compensation is used in British English to indicate this, for example as a component of of the refund paid by banks for mis-selling some financial products. – Charl E Mar 22 '16 at 12:31
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    These are good suggestions. They should be answers :) Preferring compensation at the moment. Reparations is perhaps a little emotive but works. – Oli Mar 22 '16 at 12:33
  • OK! Answer provided. – Charl E Mar 22 '16 at 12:37
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    You could also go with a goodwill refund. – John Clifford Mar 22 '16 at 12:51

Compensation is used in British English to indicate this, for example as a component of the refund paid by banks for mis-selling some financial products.

Dictionary.com: the act or state of compensating, as by rewarding someone for service or by making up for someone's loss, damage, or injury by giving the injured party an appropriate benefit.

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  • Compensation is also used this way in American English, and is sometimes abbreviated to "comp." What word would you pair with this? Compensation / Rebate? – WithScience Mar 22 '16 at 19:50

I would call it a courtesy refund, in the same sense as a "courtesy car" or a "courtesy phone": something that is supplied to help out a customer and ensure their continued goodwill. From the OED:

(Supplied, esp. for use) free of charge, as a courtesy: esp. courtesy car. Chiefly U.S.

  • "He tries to read a courtesy copy of Time, but can't concentrate."

  • "We've just learned that your courtesy basket was not delivered in time."

  • "The management provides a courtesy car to the Loop, daily from 8 am to 4 pm."

  • "In-bound passengers..can wait comfortably in a ‘buffer lounge’ (with pay phones and courtesy phones for car-hire and hotel bookings)."

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  • Your examples don't seem to quite fit a case where the business is trying to make up for a mistake. – Jeremy Nottingham Mar 22 '16 at 15:58


Something given without claim or demand. (Dictionary.com)

This is the description you used in your question and the purpose of such a refund seemed quickly understandable.

Another variant in this vein could be gratis, the Latin root.

Gratuity/Gratuitous Refund


Gratis Refund

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I agree with @CharlE that Compensation (or even just Comp) denotes a gift granted by choice of the business owner, generally based on some specific previous transaction, either from gratitude or to make up for an error.

I suggest the other item could be a Refund for Overpayment. This is more like what I think of as an actual "refund", since this is money the customer is legitimately owed because they sent too much money, rather than an optional payment granted by the business.

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For an option that’s perhaps a bit more neutral and that perhaps more vaguely admits that a mistake has occurred, you could consider “offset or offsetting,” which in spite of its neutral/vague nature, still denotes that compensation is being made for something.

offset n.
1. An agent, element, or thing that balances, counteracts, or compensates for something else.
offset, offsetting, offsets v.tr.
1. To counterbalance, counteract, or compensate for:
‘ fringe benefits designed to offset low salaries.’

(from ‘The American Heritage Dictionary’)

To the extent that an appropriate adjective to describe the opposite of “offsetting refund/refund (offsetting)” would be difficult to find and/or confusing without (overly) thorough coverage in your documentation (“balancing refund” comes to mind, but it would probably only work for refunds bringing the balance to zero), you could also consider “awarded refunds/refunds (awarded)” or "afforded refunds/refunds (afforded)" for the optional refunds and “entitled refunds/refunds (entitled)” for the required ones.

(all linked example usages from 'Google Books')

afford verb
2. to give, yield, or supply
"the meeting afforded much useful information"

award verb (transitive)
1. to give (something due), esp as a reward for merit: ‘to award prizes’
2. (law) to declare to be entitled, as by decision of a court of law or an arbitrator

entitled adjective
2. having the right or permission to do something:
"You are entitled to a refund.", "

(all from 'Collins English Dictionary')

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When a payment is made on the understanding that there was no legal compulsion to do so, it is often called an ex gratia payment.

Ex gratia (/ˌɛks ˈɡreɪʃiə/;1 also spelled ex-gratia) is Latin for "by favour", and is most often used in a legal context. When something has been done ex gratia, it has been done voluntarily, out of kindness or grace. In law, an ex gratia payment is a payment made without the giver recognising any liability or legal obligation. - wikipedia

Dictionary definition:

Ex gratia adverb and adjective (With reference to payment) done from a sense of moral obligation rather than because of any legal requirement: [as adjective]: an ex gratia payment - ODO

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How about a discount or a refundable discount if you want to be more specific? That reduces the amount due, and makes conceptual sense when you're preparing reports about total revenues.

Alternatively, there's credit and refundable credit which are used at least in US tax law to refer to credits on an account that reduce the amount of tax owed, and in the latter case if the credit exceeds the taxes due the remainder is sent as a check.

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