If you would like to credit the customer the deposit follow these steps:

  1. Change order status to Cancel, then click on "Save and Continue" button.
  2. Confirm the Order is to be canceled and refund deposit.
  3. Select if the refund will be partial or a full refund and after you have decided enter the amount (in some situations you might want to keep some of the deposit for your trouble).
  4. Click on Done (This will direct you back to the register screen) 
  5. From the register screen you can click on "Refund" button.
  6. Select Store Credit from payment methods to create a credit memo or any other payment option you prefer.
  7. Click on "Apply to Transaction", then click again on "done".