The bank is adding the interest earned for having money in your account,.If you are a business owner, the most common scenarios in which you could see a credit memo in Canada include the following: The business will offer you credit on your account so that the next time you shop with the business, the money will automatically be deducted from your total bill. If you bought a product from a business that offers credit rather than refunds, you will not receive any money back from the business after you return an item to them. In many cases, smaller businesses prefer to offer credits instead of returning the money. If you return a product to them, you will have to simply sign off, and the store will return the money to you.īut not all businesses have a refund policy. Suppose that you bought something from a major chain store that generally offers refunds for its products. Instead, you get credit towards your next purchase. In case you receive a credit memo, the seller does not return you any money. However, when you get a refund, the seller simply pays you back the money. For a customer, both cases see them receive something from the seller. At first glance, a credit memo and a refund might sound like they are the same thing. Many people who have received a credit memo often wonder what the difference between a credit memo and a refund is. In that case, it is the bank returning money for either interest earned on your deposit in the checking account or a refund from a previous bank charge. Suppose you are a business owner or seller, and you have found a credit memo in your bank statement. Whether you reduce the cost or eliminate it depends on the price of the product returned and the product you want to purchase from the seller instead.Ī credit memo can also be used to account for billing errors or promotional discounts. If you have received a credit memo from a business that you have returned an item, you can use the credit to lower the cost of another product or eliminate the cost altogether. A credit memo is essentially sent by businesses that prefer to offer their buyers a store credit instead of refunding the money. Not all Canadian sellers send credit memos to their customers who return items. Sellers often send credit memos to their customers when their customers return a product. Have you received a credit memo, and you are not sure why you have it? It is most likely because you have returned something to a business. If you are a customer who has returned something to a business, you might also receive a credit memo as a physical copy. Conclusion What Exactly Is A Credit Memo?Ī credit memo is something that both customers and business owners might find in their bank statements from time to time.
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