How to Refund Payment for a Returned Item.

At times a customer may return product and request a refund. You might expect that you should Reverse the Payment, but this would be incorrect as it leaves the Inventory On-hand incorrect.

If the customer is returning product, you should enter an Order with a negative quantity to reflect the return of the items. This will create a credit memo which you can use to refund the customer’s money, but at the same time will increase the inventory on-hand quantity.