Cancelling a customers bookings is very easy, all you need to do is to click into the booking and then from the header of the booking just click on the yellow [Cancel] button
In the popup panel that appears you have the ability to record a cancellation reason, you can mark the booking as a No Show if needed, this will let you see if a customer develops a history of now showing up for bookings.
You can make it so that can cancellation reason is required to be entered, you can set this up from the main settings page, click here to set this up.
You can also use this popup to send the customer a cancellation email, you can edit this cancellation email template from the following page, click here
Crediting Already Made Payments
If a booking already has payments made against it you can, move this amount to the customers Account Credit balance, to do this simply click on the 'Add as Account Credit' toggle, the amount will then show on the customers account and can be used for future bookings.
You can also mark the payments as being credited to make reconciliation easier when it comes filing your accounts at the end of the year.
Allowing Customers to Cancel Bookings Themselves
By default on the online booking system, customers do not have the option to cancel their bookings. Facilities generally require customers to contact them when they need to cancel a booking.
If you do want to allow this you can click into the main settings page, and from the 'Services Provided' panel you can tick which services you want to allow customers to cancel.