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ptracey9
Level 2

A customer returned product for a credit. It was paid for by credit card and refunded to the same card. How do I record this in QBO?

We sold a customer multiple items on a credit card. They later some items and we issued a credit for these to their card. How do I record this in QBO so that: 1. Items are correctly added back to inventory 2. The sales revenues are reduced by the appropriate amount. 3. The original card payment (less fees) match the bank deposit. 4. The refund is correctly shown in the bank deposit when processed.
Solved
Best answer February 08, 2021

Best Answers
jamespaul
QuickBooks Team

A customer returned product for a credit. It was paid for by credit card and refunded to the same card. How do I record this in QBO?

Hello, ptracey9.

 

I'll lay down the details and guides to help you handle the customer refund and the bank deposits. 

 

You'll want to create a refund receipt for the returned items. Here's how: 

 

  1. Click the + New icon, then select Refund receipt.
  2. Choose the customer that returned the items.
  3. For Payment method, set it for Credit card.
  4. Under Refund from, select the bank account where the payment was refunded from.
  5. On the Product/Service section, start adding the returned items.
  6. Add other information such as reference numbers, memo, and such.
  7. Click Save and close

 

refund1.1.PNG refund1.PNG

 

 

Several events will happen in QuickBooks: 

 

  • The items on the refund receipt will be returned back to your inventory count. 
  • Your bank account will be reduced by the refunded amount.
  • Your Profit and Loss report will be reduced by the same amount refunded. 

 

refund2.PNG

refund3.PNG

 

Both the refund and the bank deposits are handled separately in the bank feeds. 

 

You would need to create a bank deposit for the original card payment less the fees included for processing. Make sure the original payment was deposited to the Undeposited Funds account before doing this. 

 

To record the original payment as a deposit:

 

  1. Click the + New button, then choose Bank deposit.
  2. Select the bank where you want to deposit the payment. 
  3. Check the payment under Select the payments included in this deposit.
  4. Under Add funds to this deposit, select the vendor (that collects the fees). 
  5. For Account, choose the expense account where you would track the fees. 
  6. Enter the amount as a negative value. 
  7. Add other information such as memo, reference number, description etc..
  8. Once done, click Save and close

 

refund4.PNG

 

When your bank statement comes in to QuickBooks, you would need to match the "Spent" or "Expense" transaction with the refund receipt.

 

Do the same for the bank deposit. Simply match the bank transaction with the deposit you created in QuickBooks. 

 

refund5.PNG

 

Need help reconciling your bank after processing and matching those transactions? You can check this article for the workflow: Reconcile an account in QuickBooks Online.

 

You can also check other articles in our general topics page if you need help with other processes. 

 

Reply to this thread if you have more questions for QuickBooks Online's processes. I'd be more than happy to share some guides and workflow. 

View solution in original post

1 Comment
jamespaul
QuickBooks Team

A customer returned product for a credit. It was paid for by credit card and refunded to the same card. How do I record this in QBO?

Hello, ptracey9.

 

I'll lay down the details and guides to help you handle the customer refund and the bank deposits. 

 

You'll want to create a refund receipt for the returned items. Here's how: 

 

  1. Click the + New icon, then select Refund receipt.
  2. Choose the customer that returned the items.
  3. For Payment method, set it for Credit card.
  4. Under Refund from, select the bank account where the payment was refunded from.
  5. On the Product/Service section, start adding the returned items.
  6. Add other information such as reference numbers, memo, and such.
  7. Click Save and close

 

refund1.1.PNG refund1.PNG

 

 

Several events will happen in QuickBooks: 

 

  • The items on the refund receipt will be returned back to your inventory count. 
  • Your bank account will be reduced by the refunded amount.
  • Your Profit and Loss report will be reduced by the same amount refunded. 

 

refund2.PNG

refund3.PNG

 

Both the refund and the bank deposits are handled separately in the bank feeds. 

 

You would need to create a bank deposit for the original card payment less the fees included for processing. Make sure the original payment was deposited to the Undeposited Funds account before doing this. 

 

To record the original payment as a deposit:

 

  1. Click the + New button, then choose Bank deposit.
  2. Select the bank where you want to deposit the payment. 
  3. Check the payment under Select the payments included in this deposit.
  4. Under Add funds to this deposit, select the vendor (that collects the fees). 
  5. For Account, choose the expense account where you would track the fees. 
  6. Enter the amount as a negative value. 
  7. Add other information such as memo, reference number, description etc..
  8. Once done, click Save and close

 

refund4.PNG

 

When your bank statement comes in to QuickBooks, you would need to match the "Spent" or "Expense" transaction with the refund receipt.

 

Do the same for the bank deposit. Simply match the bank transaction with the deposit you created in QuickBooks. 

 

refund5.PNG

 

Need help reconciling your bank after processing and matching those transactions? You can check this article for the workflow: Reconcile an account in QuickBooks Online.

 

You can also check other articles in our general topics page if you need help with other processes. 

 

Reply to this thread if you have more questions for QuickBooks Online's processes. I'd be more than happy to share some guides and workflow. 

View solution in original post

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