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Level 1

How to handle damaged returns?

I sold a product from inventory, for let's say $200 cash. When the product was received by the customer, it had been damaged, so the product has zero value. I refunded the $200 in cash to the customer. How do i account for this transaction?

2 Comments 2

How to handle damaged returns?

Hello @dlow123, I'll help record this transaction.


In QuickBooks Online, you can create a refund receipt with the information of the original sales transaction to handle damaged returns. Let me walk you through the steps on how to accomplish this.


  1. Go to the + New icon.
  2. Under CUSTOMERS, select Refund receipt.
  3. On the Customer menu, select the customer you want to refund.
  4. Fill out all the information using the same details from the original sale.
  5. Below the Payment Method menu, select the mode of payment used by your customer accordingly. Say Cash.
  6. Select a bank account you wish to refund the customer from.
  7. Click Save and close.


In addition, here's an article you can read to learn more about creating a refund for your customer: How to void or refund payments you process through QuickBooks Online?


However, I'd still recommend contacting your accountant for guidance in handling your customer's refund and for the accuracy of your accounting books. If you haven't yet, you can use this link to find a bookkeeper near you: Business is better with a ProAdvisor.


Lastly, I've also included this helpful article for the steps in creating a document showing all your customer transactions: How to send statements to show customers summaries of their invoices, payments, credits, and balance...


Don't hesitate to post again here if you have other questions or concerns with QuickBooks payments and refunds. I'm always around happy to help. Stay safe and have a good one!

Level 1

How to handle damaged returns?

  1. Initiate a full refund without requiring the product to be returned.
  2. Offer a partial refund (depending on the severity of the damage) without requiring the product to be returned.
  3. Send a replacement item with or without requiring the return of the original.



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