If you need to cancel / refund a web order, you should sell the order through Point of Sale as usual.  Then once you have done that step, you can cancel / refund the order by pulling up the order and issuing a cancel / refund command from POS to initiate the process.   Read tutorial about refunding an items.

Which Types of Orders Can you Refund / Cancel in IMRCHNT?

- If all items are canceled, IC will cancel the order automatically and issue a refund.  The order status will be moved to 'Canceled' and a refund transaction will be initiated. Store will see an admin comment on the order about the refund.

- If the order is only partially canceled, say one of two items canceled, the order will be marked complete, once IC receives an ASN for all items. Partial credit Is not automatically triggered. Something needs to be done on the web site to issue the refund. Store will have to edit the order, remove the canceled item from the order and issue a refund from the website.  

Confirm your web tender allows for refunding, by checking if this option is enabled.