Turning refunds into opportunities: How to manage and optimize refunds with FareHarbor

Refunds may not be your favorite part of running a tour or activity business — but they’re inevitable. Cancellations happen, weather gets in the way, and plans change. But you don’t have to think of them as a loss! With the right tools and approach, refunds don’t have to hurt your bottom line. In fact, when managed thoughtfully, a refund can become a chance to deliver great service, build trust, and encourage future bookings.

Refunds made easy

FareHarbor gives you the flexibility to issue full or partial refunds directly from a customer’s booking. Whether it’s a last-minute cancellation or a partial refund due to a pricing adjustment, you can easily handle it in just a few clicks.

Here’s how:

1. Open the booking and select Refund under Booking actions.
2. Choose Full refund or Partial refund, depending on the customer’s situation.
3. If there are multiple payments, make sure to select the correct one(s).
4. Optional: Click the Send refunded email option to notify the customer with a clear breakdown of the refund.

Issuing refunds through your Dashboard keeps everything seamlessly organized for future reporting or legal needs — all while keeping your customers informed and satisfied.

Pro tip: Follow our step-by-step refund help page for more details and instructions. 

More than money back: Alternative refund options

Depending on your cancellation policy or the specific situation, a refund may not be the right fit. Through FareHarbor, you have a few other options to support your guests. 

Gift cards: If a tour is canceled due to weather or a guest needs to reschedule, you can issue a gift card instead of processing a refund. This keeps the revenue in your business and gives the customer something to look forward to.

Custom refunds: Use the custom refunds option to log refunds issued outside FareHarbor (such as cash, check, or another payment method). It’s a great way to keep your records accurate — even when the payment didn’t happen through the system.

Your built-in safety net: The Refund Reserve

The Refund Reserve is a dedicated pool of funds you can set aside within FareHarbor specifically for refunds. This feature ensures you always have enough money on hand to issue refunds as quickly as possible.

You can set up one-time transfers to move funds manually into your Refund Reserve or recurring transfers to automate a daily amount until a preset limit is reached.

For example, if you want $100 in your Refund Reserve, you might set a $25 daily transfer with a $100 cap. Once the total reaches $100, it pauses — and only restarts if the balance dips again.

Ultimately, it’s a simple way to stay refund-ready, protect your cash flow, and deliver fast, reliable service to guests.

Make your cancellation policy clear and customer-friendly

Cancellation policies help you protect your business, manage customer expectations, and reduce friction when changes happen. In FareHarbor, you have two main tools:

• Cancellation policies: These are set in your Dashboard and control how bookings can be canceled or refunded. You can apply different policies for different tours or affiliates.
• Cancellation notes: These are written summaries that appear in confirmation emails. They don’t control functionality but are useful for reinforcing the terms guests agree to.

A few tips to consider when writing your cancellation policy: 

1. Your policy terms should be clearly written to avoid any confusion or customer disputes. 
2. It’s important to include your policy in several places to ensure customers are informed: Item descriptions, FAQ page, checkout flow, and anywhere else it makes sense.
3. Make sure your policy protects your business without deterring customers with overly strict terms.

Pro tip: Include Trip Protection as an add-on at checkout to give customers more cancellation flexibility while creating an additional revenue stream. With Trip Protection, you can also introduce a more strict cancellation policy to entice more guests to choose this upgrade. 

Refund FAQs — what operators ask most

How long do refunds take?

Refunds issued to credit cards are typically processed in a few business days, depending on the customer’s bank.

• Refunds from your Refunds Reserve are processed immediately and usually take 3-5 business days to appear in the customer’s account.
• Refunds from your bank account typically take 6-10 business days. 
• On rare occasions, refunds can take up to 30 days.

Can I refund a different card than the one used?

No, refunds must go back to the original card. If that’s not possible, consider a gift card or a custom refund option like cash or check.

Pro tip: Check out our most frequently asked credit card refund FAQs for more answers.

Want fewer refund requests? Here’s how.

If you’re looking to reduce the number of refunds you issue, small improvements and tools in your workflow can make a big difference.

1. Promote rebooking: By enabling online rebooking, you allow guests to easily reschedule tours on their own — giving an incentive to not cancel.
2. Offer gift cards: Gift cards keep money within your business and boost future loyalty.
3. Display cancellation policies upfront: When guests know what to expect, they’re more likely to accept the outcome if they’re a no-show or need to change plans.

Resources to help you navigate refunds

We’re here to help every step of the way. Whether you’re learning a new tool or rethinking your approach, check out these resources:

• FareHarbor Help Center: How-to articles and videos to walk you through our tools and features. 
• Compass: Blogs that provide use cases and less technical product information. 
• The FareHarbor Community: The best place to ask your questions!

Make refunds part of your success strategy

Refunds don’t have to be a loss. When paired with the right tools and policies, they can be a powerful part of your customer service — and even a driver of repeat bookings.

By offering flexible options, automating your refund reserve, and being clear with cancellation terms, you can turn cancellations into confidence-builders. And that’s the kind of experience that keeps guests coming back.