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How to enter a refund charge on credit card for returned items?

Forum|Forum|8 years ago
February 10, 2018
8 replies
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What is the best way to enter a refund charge on my credit card for items that I returned? In other words, QB sees the charge back on my credit card, it want's me to mark it as "uncatorigized income" etc. How should I mark it so that it is not counted as income or does it matter?

I have been searching on here over and over and all I can see is how to refund back to a vendor or refund back to a client, etc. I purchsed somthing on my credit card, it wasn's what I needed, the credit went on my card and now I need to deal with it.

Thanks

(Title has been edited by moderator for clarity)

Best answer by Rustler

Use the plus menu and enter a credit card credit, select the vendor and the expense account you used for the purchase originally (or the inventory item you returned in the item details part)

then you match the banking download

work flow is enter transactions, download banking, match

RustlerAnswer

Use the plus menu and enter a credit card credit, select the vendor and the expense account you used for the purchase originally (or the inventory item you returned in the item details part)

then you match the banking download

work flow is enter transactions, download banking, match

R

RECaaj3

Hello,

I used the process posted to creat a credit memo and to refund it - which brings the account as paid in full and refunded in full. My issue is it is a credit card charge back - by doing this process I end up with a zero balance on the customers account. It should show that they owe the amount of the chargeback?

Any ideas?

Thank you,

RC

katherinejoyceO

Hope you're doing well today, @RECaaj3. You can create a credit memo to record a chargeback transaction for your customer.

Here's how:

Click the +New at the top, then select Credit Card Credit under the Vendor column.
Enter the vendor’s name under Payee.
Select the credit card under Bank/Credit account.
Under the Item details sections, enter the item, and the amount to be credited.
Click Save and close.

Then, create an invoice and link the credit memo you've created. Here's how

Click the + New menu, then select Invoice.
Enter the customer under the Customer drop-down menu.
Edit the Invoice date to when you received the repayment.
Type in the same product or service found on your original sales receipt under the Product/Service drop-down menu.
Put in the correct amount as well under the Amount column, then click Save.

You can also check out this article to learn more about recording a vendor refund in QuickBooks.

For future reference, Follow this article in case you need some easy steps in receiving invoice payments in QuickBooks Online.

Let me know if there’s anything else you need. We're always around here to help in any way we can.

Y

yaegerj

I have the same questions but don't completely understand the answer you received. I have quickbooks self-employed online. When I return something that I don't need and it was only a portion of the entire transaction, the credit goes to the same bank card that I used to purchase the item then i am just making a note in the comments section of that transaction that this was a refund for items returned. In another case, I returned the entire purchase so I just excluded both the purchase and the refund transaction but that didn't feel right to me. What have you decided to do lizuare?

M

Movingman

I have the same question. I didn't understand the response as well.

can you please in a little more detail? thank you

M

MichelleT

Hi there, @yaegerj and @Movingman,

I’m here to help clear things out about refunds and credits in QuickBooks Self-Employed (QBSE).

QBSE only tracks business expenses and income for estimated tax calculations. At this time, we don’t have a specific category for refunds and credits.

In this case, you’ll need to categorize the credit as personal or exclude it once it’s downloaded into the system. If the original transaction for the purchase is a downloaded one, you also need to exclude it.

Then, add it back minus the refund amount (since the credit was only a portion of the entire purchase). This is to ensure the tax calculations for the quarter only include the actual amount you spent to purchase the item.

If the transaction was manually entered, you can simply edit the amount. If you return the entire purchase, you’ll need to delete or exclude both the purchase and credit.

Stay in touch with me if you need further information about estimated taxes or categorizing transactions in QBSE.

J

JPhoto

This works if you do the refund in the same calendar year. For businesses that require deposits for events that are sometimes held a year or more later, this is not really helpful. For example, I had someone pay in full for a service that was to be provided. However, Covid happened and they had to cancel, so I issued a partial refund. The problem is that I already paid taxes on the amount I received, and then actually had to issue a refund for that taxed amount this year. If quickbooks added a refund option for product/services it would make things a lot better for those who are self-employed and tracking everything themselves.

Z

zawetzel13

Even after reading these answers it took me a while to figure this out so in Layman's terms:

Click the + button at top right corner, under Vendors column select "Credit Card Credit'.

In the field labeled 'Choose a payee' you're going to select the company that gave you the refund.

Credit card account is the credit card you received the refund on.

Enter the date that the refund went back on your card.

in Account you want to select the same expense account that you charged the original purchase to.

Description, I just put Refund.

Enter the Amount.

Save and close.

Now go back to your transactions to review and it should be matched up to the CC Credit that you just entered, if not, double check to make sure the payee (vendor), date, account, and amount are all the same.

A

Alan Coley

Thank you from a fellow layman. Excellent easy to follow instructions.

C

cipgifts

I thought this worked perfectly but now my vendor totals are off - showing a negative and an overdue amount so this option does not work to balance the account either.

Quickbooks needs to create the ability to match a vendor credit to a credit card credit (or bank deposit) so it shows a credit it due to the account and the credit was paid by the vendor.

I have tried every option I can in the forum and nothing works

R

RaymondJayO

Hey there, @cipgifts,

Thanks for performing the suggested steps provided by my peers on this thread.

Recording a credit card credit offsets the value if you return something you purchased with your business credit card. This will allow your account to properly balance in the program.

You might have created a vendor credit and a credit card credit, which is why your vendor totals are off. Please see the screenshot below for your reference.

If you didn't enter bills prior to creating a vendor credit, you may end up with negative balances for your vendors. To help fix this, you'll first need to create a bill. Then, you can link the vendor credit to a bill payment by performing the steps below:

Go to the Plus icon (+) at the upper right.
Select Expense or Check.
In the Choose a payee drop-down, choose the vendor name.
Leave the amount field blank.
From the Add to Expense/Check section, click Add for the outstanding bill and vendor credit.
Click Save and close.

For more information, you can go through this useful article: Manage Vendor Credits.

If you have downloaded banking transactions, you can match them in the For Review tab to the existing entries in QBO. Please see this article for more details: Add and Match Transactions.

This will get you on the right path, @cipgifts.

I'll be right here to help if you need anything else. Have an awesome day.

C

cipgifts

I will review everything but upon quickly reviewing your reply there is one HUGE issue.

Creating a bill is incorrect - that's creating a duplicate invoice for the same items and wrongly increases my cost-of-good sold.

Scenario - I ordered materials for products I sell - that invoice goes to the category "cost of goods sold". I paid that invoice in full with my credit card. The materials were defective - so I returned them. My vendor balance is zero.

I need to create a credit (credit due to my credit card account not my checking account) which shows the product was returned to that vendor. That credit must also reduce my cost-of-goods sold for proper accounting.

When the vendor issues that credit and it downloads to my credit card account, I need to match it to the credit on that vendor.

In the end the vendor should show a zero balance AND zero past due. Everything I tried either shows a negative balance, a past due amount or both.

From what I tried on this post

H

HM58

We had a file cabinet that was delivered damaged and reordered the file cabinet and had a refund come through the credit card for the original file cabinet, but this refund happened on the credit card statement the following month, showing on the credit card statement under payments. This is the only way I personally can figure out how to do a reconciliation and get it to match my credit card statement balance and reconcile: I have to enter the refund through Bill Pay and NOT the "Enter credit card charges". I have to use the credit card vendor as the vendor, otherwise I cannot apply this refund. When I reconcile the credit card the next month, it will let me reconcile by not choosing these refunds, then when I go to post the payment in Bill Pay, I choose the invoice QB's created (which will be more than the payment that actually was paid by the refund amounts), and then I apply the refunds as they now show up in Bill Pay under the credits available for that vendor (which in this case is the credit card) and I can reduce the amount of the payment made by those credits. There should be an easier way to do this? I can't do it through the reconciliation screen, I have tried all the ways to Sunday and it never works.

JasroV

Hello there, @HM58.

When reconciling the QuickBooks bank account, just compare it with the actual bank statement covered on that specific period to avoid discrepancies.

Know that the most important thing in reconciliation is to match your QuickBooks bank register to your bank statement.

You may read this article to learn more about reconciling in QuickBooks Online and some troubleshooting steps you may encounter while reconciling: Reconcile Hub.

If you have other questions, feel free to reach out to us anytime. We're always here to help. Have a good day!

L

Lucky2529

I paid $315 for our company's new Quickbook ON LINE on Feb 6, 2020, then two days later I find that new Quickbook on Line was not what I need, and make a cancellation on Feb 13, 2020 as I changed back to QB Desk top Pro Plus. Case#[removed], but when I get my Credit Card Statements, it only have one credit card refund for -$315, and QBook also change me Quickbook Payroll for $315, so It did not get the refund at all, when I called few days ago, It was not in corrected transactions, Instead of $20. or $40 refund and etc. that make the whole matter more confused! I am your loyal customer since 2016, please have it straight up, I am willing to wait, my contract No. is [removed], email address: [email address removed]

May Gung /Garden Villas Inc./East & West Investment/China Garden USA

JenoP

Hi there, Lucky2529.

We had to remove the account details that you've shared here for the security of your account. This is because the Community is a public forum and all users or visitors of the site can see them.

I can see that you've already called in about the refund. However, we're unable to open accounts or review billing history in this platform.

I would still recommend reaching out to our Customer Service Department once again. They'll be able to check non the refund that was given to you and have this sorted out.

Please follow these steps on how to reach out to them in case you're not able to save their contact details: