Refunding part of an order

An order doesn't have to be refunded in full to reach Xero properly. Refund one item out of four, refund the shipping, or refund an amount without naming any items at all, and each one posts as a credit note against the original invoice. There's nothing to turn on for any of it.

How it Works

When you refund particular items, the credit note carries just those items, at the quantity you actually refunded. If the order had a discount on it, only the share belonging to the refunded units is reversed — refund one of three discounted shirts and you credit back what that shirt actually cost the customer, not its full ticket price. Tax follows the same split.

Refunded shipping comes across as its own line. An amount refunded without any items behind it, such as a goodwill gesture or a price adjustment you typed in yourself, comes across as a single line reading Manual refund adjustment.

Whatever the mix, the credit note is made to total exactly the cash you refunded in Shopify. Where the lines don't quite reach that figure, one more line squares the difference: Refund Adjustment normally, or Rounding Adjustment when it's only a penny or two. It posts to the same account the rest of the refund does, which Posting Refunds to a Separate Account covers.

Refunding the same order more than once

Each refund gets its own credit note, numbered in the order they happened — CN-1234-1, then CN-1234-2, and so on. Credit notes already in Xero are left alone; a second refund never rewrites the first.

Where the credit ends up

The credit note is applied to the original invoice and reduces what's owed on it. If that invoice was already paid in full there's no balance left to reduce, so Xero holds the amount as a credit on the customer's account instead. A refund posted but shows as unapplied credit in Xero explains what to do with it, and it's normal rather than a fault.

If you hold part of a refund back as a restocking fee, that's worth setting up properly so the fee lands as income instead of quietly shrinking the credit — see Charge a restocking fee on a refund.

If a refund hasn't shown up in Xero, or a credit note total doesn't look right, email us at help@hyvelabs.co with your shop URL, the order number and the date you issued the refund.