Refund

The term refund has several meanings. A refund is money returned to a payer or the act of returning money previously received. A refund usually refers to the reimbursement of funds to a customer for a product or service provided, for reasons such as defects in merchandise or dissatisfaction with labor performed. There is also the tax refund, which is the governments return of excess taxes (money) to taxpayers. A tax refund is usually computed at the time of filing a tax return. There is also the insurance refund, which is a return to a policyholder for part of a premium paid due to cancellation or suspension of a policy, or in the event of a rate or policy reduction. Finally, a refund can refer to retiring an outstanding bond issue at maturity. This type of refund is also known as refunding.