Our clients are for the most part dental laboratories. From time to time a lab receives a credit on their account and they would like a check written for this amount. They want the check in their personal name instead of in the lab's name. Can this be done? Should this be done?
As a good business practice if the billing is done in the Labs name, then providing a refund to them should also go to the Lab. This makes sure you keep your accounting records straight. If the Lab is subject to 1099 reporting, then you want to make sure that all payments and credits are properly reflected on their account. It is also a little suspicious to request a check in a person's personal name instead of the businesses name.
What if the lab purchased the item on a credit card? If the card was a personal card, can we write the check to that person even though the purchase was made on behalf of the lab?
This is a management call on what to do. It's not unusual for an employee to request a credit on their credit card for a return or cancellation. Some companies are fine with issuing a credit on their credit card, while others require a check. Issuing a check in the name of the person or the company will depend on what you management team is comfortable with.
As a company policy, we do not credit back the credit card - we simply send a check. I am not sure why or when this policy started, but are there any negatives to crediting back the credit card?
There is not necessarily a negative to it. Some companies do require a check as the method of refund because it makes sure they properly track the returns or cancellation. Usually when issuing a check, there must be documentation for the request, while it is easier with a credit card to not to document it or to misplace it. It may also be more of a reconciliation issue trying to keep track of who was credited back and reconciling it to your monthly merchant account statement.
These questions are also good ones for the Messaging/Forum section where you can get feedback directly from your peers on how they handle these issues.