Refund sequence validation

Resolving The Problem

As per the refund design, the payment methods that are marked as "Charge instead of Authorize" the charges that are directly created without authorization are recorded with "Hold against book as Y" . You should always charge a customer only when you have invoice, else get authorizations. Now since this is a charge instead of authorize we would directly charge the customer . Hold against book indicates that you should hold that amount against the open book amount since there will be an invoice getting created down the line.

Refunds are designed in 3 pass.
The first pass is always made to refund on charges that are No hold (payment method with authorize and charge).
Before the second pass we would reduce the refund amount by the open book amount on the order.
Second pass is done based on the refund sequence.
Third pass is for over refunds.

This is the reason behind the validation on refund sequence, having refund priority of "Charge instead of Authorize" being lower than the other payment method with authorize and charge.

From the business/life perspective, money charged to the credit card is the money one owes to the bank. Customers normally prefer to receive refund to their credit card so that they owe less to the bank, rather than receive their money back in the form of a gift card.