How to apply a credit memo as a refund in QB Online?

Glad to see you in the Community, userbil.

Based on the scenario, we’ll have to enter a credit memo and create an expense transaction. Then, use the A/R account to associate it to the entry.

1. Hit the New menu to select Credit Memo under Customers.
2. Click the Customer drop-down to choose the client you’re working on.
3. Fill in the field boxes.
4. Type the item in the Product/Service column and $25 in the Amount field.
5. Click Save and close.

To add an expense:

1. Go to the New menu and pick Expense under Vendors.
2. Key in your name in the Payee field.
3. Fill in the field boxes.
4. In the Category details section, navigate to the first line and enter Accounts Receivable in the Category column.
5. Place $25 in the Amount column and enter the client’s name in the Customer/Project column.
6. Click Save and Close.

To link both transactions:

1. Choose the New menu to select Receive payment under Customers.
2. Enter the client's name in the Customer field and the date in the Payment date box.
3. In the Outstanding Transactions section, tick the box for Expense.
4. Then, mark the box for the credit memo in the Credits section.
5. Press Save and close.

For additional information about tracking customer credits, refunds, credit memos, or overpayments, see the following guides.

• Create and apply credit memos or delayed credits in QuickBooks Online 
• Handle a customer credit or overpayment in QuickBooks Online 

Stay in touch if you need further assistance performing any of these steps. I’ll be more than happy to help. Enjoy the rest of the day.

Are you sure this is the right solution? 

Again, the customer paid the $150 charge and forgot to use his $25 discount code. So there's no outstanding accounts receivable balance, it's zeroed out. I just need to account for the *additional* transaction where I refunded him $25 through Stripe (separate transaction completely).

This is for Quickbooks Online. Some of the fields you reference don't appear (No expense/expense under the menu, only vendor/expense, and no Customer/Project on that page). Also, when I try it, I get an error message "When you use Accounts Receivable, you need to choose a customer. If you are refunding the customer's A/R balance, choose the customer in the Purchased From or Pay to the Order Of field at the top of the screen. Otherwise, choose the customer in the Customer field in the Split table at the bottom of the screen. If you don't see a Customer field, Expense tracking by customer is turned off. To turn it on, you can go to Preferences and find it under Vendors & Purchases."

I don't see the fields referenced in that error message either!

So I'm not sure this is the right way to go. Can someone else comment please? I want to get it right and not screw up my accountging.