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Voiding a transaction is when you cancel it before it is sent for processing, typically done before the batch is closed at the end of the day. Refunding is when a transaction is canceled after it has been settled, usually due to a customer request for a return. Voiding is for authorized transactions that haven't been settled yet, while refunds are for settled transactions. Making the right choice between voiding and refunding is crucial for accurate tracking of sales and managing customer payments effectively.