Record a customer refund in QuickBooks Online

Learn how to refund a customer.

If you need to return your customer's money, don't worry. Here's how to record a refund based on various scenarios. This ensures your books are up-to-date.

Refund for goods or services that didn’t satisfy the customer

You can use refund receipts if a customer asks for a refund for an item or service. If they used a credit card, learn how to refund a credit card payment.

Note: To avoid a double refund, make sure you didn't enter a credit memo yet.

1. Select + New.
2. Select Refund receipt or Give refund.
3. Select the Customer ▼ dropdown, then select the customer you want to refund.
4. Select the Refund From ▼ dropdown, then select the bank you deposited the payment for the invoice too.
5. Add all products or services the customer returned in the Product or service column.
6. Make sure to fill the quantity, rate, amount, tax, and other fields accordingly, then select Save and close.

Refund a customer's overpayment or credit

You can record a refund to your customer using Cheque or Expense if:

• They want to redeem their open credits.
• They made a prepayment for an order but cancelled it before receiving the goods or services.
• They want you to reimburse an accidental overpayment.

Using Cheque or Expense to record the refund reduces your bank's balance and offsets the customer's open credit, overpayment, or prepayment.

Step 1: Record the refund for your customer

1. Select + New.
2. Select Expense, Add expense or Cheque.
3. Select the customer you want to refund from the Payee ▼ drop-down.
4. From the Payment account ▼ drop-down, select the bank account where you deposited the overpayment too.
5. On the first line of the Category column, select Accounts Receivable.
6. Enter how much you want to refund in the Amount field.
7. Fill out the other fields as you see fit, then select Save and close.

Step 2: Link the refund to the customer's credit or overpayment

1. Select + New.
2. Select Receive payment or Receive invoice payment.
3. Select the same customer you used for the cheque or expense.
4. Fill out the other fields as you see fit.
5. Under the Outstanding Transaction section, select the checkbox for the Expense or Cheque you created.
6. Make sure the payment is equal to the open balance, then select Save and close.