# Automatic Refund on Cancellation

When a subscription is cancelled, Limio can automatically trigger a refund in Zuora for any overpayment. This is controlled by the **"Automatically refund cancelled subscriptions"** setting.

## How it works

When a cancellation order is processed and this setting is enabled, Limio will:

1. Preview the cancellation in Zuora to calculate the amount owed or overpaid.
2. If the preview shows a negative amount (i.e. an overpayment by the customer), Limio adds refund processing options to the Zuora cancel order.
3. Zuora then creates a **Credit Memo** and processes the refund automatically as part of the cancellation.

If the preview amount is zero or positive (no overpayment), no refund is triggered — even with the setting enabled.

## Prerequisites

* The user or API client processing the cancellation must have the **`order:update_refund`** permission in Limio. Without this permission, the cancellation will fail with an error.

## Configuration

1. In Limio, go to **Settings > Zuora > Cancel**.
2. Enable **"Automatically refund cancelled subscriptions"**.

The setting is off by default.

{% hint style="warning" %}
**Future-dated cancellations:** Refunds are only triggered when the Zuora preview indicates an actual overpayment. A future-dated cancellation that extends beyond the current billing period will not trigger a refund unless an overpayment exists.
{% endhint %}

## Related

* [How Limio Events Update Zuora](/integrations/keeping-zuora-and-limio-in-sync/how-limio-events-updates-zuora-for-commerce.md) — overview of all customer journeys and how they update Zuora
* [Subflow: Refund](/integrations/using-limio-for-salesforce/manage-subscriptions-flow/subflow-refund.md) — manual refund flow in Limio for Salesforce
* [Recommended Custom Fields in Zuora](/integrations/zuora-integration/how-to-populate-custom-fields-in-zuora/recommended-custom-fields-to-set-up-in-zuora-to-receive-enriched-limio-data.md) — custom fields populated by Limio orders


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