Default Option: SALES RETURN WITH CREDIT MEMO (you can change the default option under SYSADMIN -> CONFIGURATIONS -> TRADING)
 

In most cases, a credit note is automatically generated when a sales return is produced. This credit note could be used to knock off / contra a
previous invoice by the same customer if it is still outstanding, or it could be used to knock off a future invoice to the same customer.

If there's no invoices to contra, and customer choose to be paid in full or partially, the system allow the a Payment Voucher to be created to settle
this Credit Note. Use of Payment Voucher to knock of customer credit note is a unique feature that does not existing in many other accounting packages.

Alternative Option: SALES RETURN WITH FULL REFUND
 

In retail business, it is common that the users at the Point of Sales may key in some mistakes while creating a cashsale. When doing sales return, instead of going thru the full cycle of knocking off other invoices with the credit note produced while a sales return is created, or use of payment voucher etc... sometimes it is faster to just use the CASH REFUND method. This is because when another new cashsale (with correct details) is created, the CASH REFUNDED, is actually "COLLECTED" back.