I am trying to refund someone's credit card and doing everything I always do, but it is giving me an error code number 54: The referenced transaction does not meet the criteria for issuing a credit.
This error means that Authorize.net cannot find the original transaction against which to credit the return.
Usually, this is because someone is trying to return an order on the same day that they did the original charge. This is not possible because the original charge is still an "unsettled" charge until you run the end of day, so Authorize.net does not recognize the original charge yet.
If you wait until the next day, the return will process correctly.
There is a work around if you do not want to wait. You can go into your Authorize.net account and delete the original transaction from your "unsettled" charges page. This will make it like the original charge didn't even happen. Then you can go to the order in Store Manager and run the return with the "Process Credit Card" box UNCHECKED.
That way, the credit card will not be credited and the inventory will be corrected.