diff --git a/app/Ninja/Datatables/PaymentDatatable.php b/app/Ninja/Datatables/PaymentDatatable.php
index 193207f9d82a..e0be4b78c86d 100644
--- a/app/Ninja/Datatables/PaymentDatatable.php
+++ b/app/Ninja/Datatables/PaymentDatatable.php
@@ -146,8 +146,9 @@ class PaymentDatatable extends EntityDatatable
                     $max_refund = number_format($model->amount - $model->refunded, 2);
                     $formatted = Utils::formatMoney($max_refund, $model->currency_id, $model->country_id);
                     $symbol = Utils::getFromCache($model->currency_id ? $model->currency_id : 1, 'currencies')->symbol;
+                    $local = in_array($model->gateway_id, [GATEWAY_BRAINTREE, GATEWAY_STRIPE, GATEWAY_WEPAY]) || ! $model->gateway_id ? 0 : 1;
 
-                    return "javascript:showRefundModal({$model->public_id}, '{$max_refund}', '{$formatted}', '{$symbol}')";
+                    return "javascript:showRefundModal({$model->public_id}, '{$max_refund}', '{$formatted}', '{$symbol}', {$local})";
                 },
                 function ($model) {
                     return Auth::user()->can('editByOwner', [ENTITY_PAYMENT, $model->user_id])
diff --git a/resources/lang/en/texts.php b/resources/lang/en/texts.php
index 376846dc203e..a0185f4a1db7 100644
--- a/resources/lang/en/texts.php
+++ b/resources/lang/en/texts.php
@@ -2741,6 +2741,7 @@ $LANG = array(
     'taxes_are_not_included_help' => 'Taxes are excluded from the cost.',
     'change_requires_purge' => 'Changing this setting requires :link the account data.',
     'purging' => 'purging',
+    'warning_local_refund' => 'The refund will be recorded in the app but will NOT be processed by the payment gateway.',
 
 );
 
diff --git a/resources/views/partials/refund_payment.blade.php b/resources/views/partials/refund_payment.blade.php
index aef759b32160..5547bc1010e3 100644
--- a/resources/views/partials/refund_payment.blade.php
+++ b/resources/views/partials/refund_payment.blade.php
@@ -1,83 +1,86 @@
 <div class="modal fade" id="paymentRefundModal" tabindex="-1" role="dialog" aria-labelledby="paymentRefundModalLabel" aria-hidden="true">
-  <div class="modal-dialog" style="min-width:150px">
-    <div class="modal-content">
-      <div class="modal-header">
-        <button type="button" class="close" data-dismiss="modal" aria-hidden="true">&times;</button>
-        <h4 class="modal-title" id="paymentRefundModalLabel">{{ trans('texts.refund_payment') }}</h4>
-      </div>
-
-      <div class="container" style="width: 100%; padding-bottom: 0px !important">
-      <div class="panel panel-default">
-      <div class="panel-body">
-            <div class="form-horizontal">
-              <div class="form-group">
-                <label for="refundAmount" class="col-sm-offset-2 col-sm-2 control-label">{{ trans('texts.amount') }}</label>
-                <div class="col-sm-4">
-                    <div class="input-group">
-                            <span class="input-group-addon" id="refundCurrencySymbol"></span>
-                        <input type="number" class="form-control" id="refundAmount" name="refund_amount" step="0.01" min="0.01" placeholder="{{ trans('texts.amount') }}">
-                    </div>
-                    <div class="help-block">{{ trans('texts.refund_max') }} <span id="refundMax"></span></div>
-                </div>
-              </div>
-              <div class="form-group">
-                <label class="col-sm-offset-2 col-sm-2 control-label"></label>
-                <div class="col-sm-6">
-                    <div class="input-group">
-                        {!! Former::checkbox('refund_email')
-                                ->text('send_email_to_client')
-                                ->raw() !!}
-                    </div>
-                </div>
-              </div>
-
+    <div class="modal-dialog" style="min-width:150px">
+        <div class="modal-content">
+            <div class="modal-header">
+                <button type="button" class="close" data-dismiss="modal" aria-hidden="true">&times;</button>
+                <h4 class="modal-title" id="paymentRefundModalLabel">{{ trans('texts.refund_payment') }}</h4>
             </div>
-    </div>
-    </div>
-    </div>
 
-     <div class="modal-footer" style="margin-top: 2px">
-        <button type="button" class="btn btn-default" data-dismiss="modal">{{ trans('texts.cancel') }}</button>
-        <button type="button" class="btn btn-primary" id="completeRefundButton">{{ trans('texts.refund') }}</button>
-     </div>
+            <div class="container" style="width: 100%; padding-bottom: 0px !important">
+                <div class="panel panel-default">
+                    <div class="panel-body">
+                        <div class="form-horizontal">
+                            <div class="form-group">
+                                <label for="refundAmount" class="col-sm-offset-2 col-sm-2 control-label">{{ trans('texts.amount') }}</label>
+                                <div class="col-sm-4">
+                                    <div class="input-group">
+                                        <span class="input-group-addon" id="refundCurrencySymbol"></span>
+                                        <input type="number" class="form-control" id="refundAmount" name="refund_amount" step="0.01" min="0.01" placeholder="{{ trans('texts.amount') }}">
+                                    </div>
+                                    <div class="help-block">{{ trans('texts.refund_max') }} <span id="refundMax"></span></div>
+                                </div>
+                            </div>
+                            <div class="form-group">
+                                <label class="col-sm-offset-2 col-sm-2 control-label"></label>
+                                <div class="col-sm-6">
+                                    <div class="input-group">
+                                        {!! Former::checkbox('refund_email')->text('send_email_to_client')->raw() !!}
+                                    </div>
+                                </div>
+                            </div><br/>
 
+                            <div id="refundLocalWarning" class="text-muted">
+                                {{ trans('texts.warning_local_refund') }}
+                            </div>
+
+                        </div>
+                    </div>
+                </div>
+            </div>
+
+            <div class="modal-footer" style="margin-top: 2px">
+                <button type="button" class="btn btn-default" data-dismiss="modal">{{ trans('texts.cancel') }}</button>
+                <button type="button" class="btn btn-primary" id="completeRefundButton">{{ trans('texts.refund') }}</button>
+            </div>
+
+        </div>
     </div>
-  </div>
 </div>
 
 
 <script type="text/javascript">
-    var paymentId = null;
-    function showRefundModal(id, amount, formatted, symbol) {
-        paymentId = id;
-        $('#refundCurrencySymbol').text(symbol);
-        $('#refundMax').text(formatted);
-        $('#refundAmount').val(amount).attr('max', amount);
-        $('#paymentRefundModal').modal('show');
-    }
+var paymentId = null;
+function showRefundModal(id, amount, formatted, symbol, local) {
+    paymentId = id;
+    $('#refundCurrencySymbol').text(symbol);
+    $('#refundMax').text(formatted);
+    $('#refundAmount').val(amount).attr('max', amount);
+    $('#refundLocalWarning').toggle(!!local);
+    $('#paymentRefundModal').modal('show');
+}
 
-    function onRefundClicked(){
-        $('#completeRefundButton').prop('disabled', true);
-        submitForm_payment('refund', paymentId);
-    }
+function onRefundClicked(){
+    $('#completeRefundButton').prop('disabled', true);
+    submitForm_payment('refund', paymentId);
+}
 
-    function onRefundEmailChange() {
-        if (! isStorageSupported()) {
-            return;
+function onRefundEmailChange() {
+    if (! isStorageSupported()) {
+        return;
+    }
+    var checked = $('#refund_email').is(':checked');
+    localStorage.setItem('last:send_refund_email', checked ? true : '');
+}
+
+$(function() {
+    $('#completeRefundButton').click(onRefundClicked);
+    $('#refund_email').click(onRefundEmailChange);
+
+    if (isStorageSupported()) {
+        if (localStorage.getItem('last:send_refund_email')) {
+            $('#refund_email').prop('checked', true);
         }
-        var checked = $('#refund_email').is(':checked');
-        localStorage.setItem('last:send_refund_email', checked ? true : '');
     }
-
-    $(function() {
-        $('#completeRefundButton').click(onRefundClicked);
-        $('#refund_email').click(onRefundEmailChange);
-
-        if (isStorageSupported()) {
-            if (localStorage.getItem('last:send_refund_email')) {
-                $('#refund_email').prop('checked', true);
-            }
-        }
-    })
+})
 
 </script>