Issuing a partial refund with appropriate taxes

paulfielding
Visitor
2 0 28

It appears that I can do two things:

 

1. Issue a partial refund by reducing the stock in the order.  Things appear to be tallied correctly when you do this.

 

2. Go down to the Refund total on the right and enter a manual number.

 

The issue here is that someone forgot to use a discount code, and I want to apply the discount.  However, that means they should also pay less taxes.  So, for example - if the item was $100 and they should have had a 25% discount, they should have paid $75 + 5% GST, for a total of $78.75.  However, they paid $105 because they didn't use the code.

 

To refund them the money,  if I manually refund them $26.25, it appears that Shopify doesn't reduce the taxes they paid, in the tax reporting.  What really should happen is I should be able to refund on the base price, and Shopify should then also add in the taxes that should be refunded along with it.  The same way it does automatically already, when you reduce the number of items in an order.

 

Is there something I'm missing here?  Or has someone worked out a way to do this properly?

 

regards,

 

Paul

 

Replies 51 (51)
Sam-123
Shopify Partner
36 0 43

Hi @tw_usa@PDP_Bookkeeper and everyone in this thread, so long story short regarding what Shopify Support said about fixing the issue. Leo clearly didn't understand what I meant. There was probably another issue with reports that were fixed but sales tax on partial refund wasn't one of them. Sad to say but I don't have any good news about this at all. Even though Leo and Shopify Support sure made it sound like this was finally going to get fixed.

 

The sad thing is, is that the majority of staff at Shopify and merchants don't even know their taxes aren't adjusted correctly after a partial refund and I can guarantee majority or merchants are overpaying sales tax because of this. And causing huge pain points for larger businesses that use Avalara or TaxJar as these apps can only pull data that Shopify has (which is incorrect).

 

Even though this thread started in 2019. Shopify has been around since 2006. I don't think this was ever offered on Shopify, so this has been an issue for 17 years. This realization is quite depressing. 

 

Maybe after 25 - 30 years they will update this? It's pretty comical at this point. And we just need to adjust our books each month for all the partial refunds. It's more admin work but no other work around that I can think of. Unless you want to do the "exchange product" method but then you are simulating a full return, resulting in overinflating both returns and gross sales. If you are cool with that then that is an option in order to get correct sales tax. But to inflate gross sales x2 and issue a full return when it's only supposed to be partial is pretty silly. Over time it compounds more and more resulting in hysterically wrong numbers.

 

I prefer to just keep a separate spreadsheet of the sales tax that needs to get reduced and then adjust our bookkeeping accordingly each month. 

 

This is just one of many limitations and rigid restrictions with Shopify that doesn't give any flexibility or control over our processes. I really miss our old platform at Woo Commerce. At least this empowered merchants do be able to do what they needed without coming up with makeshift un-scalable workarounds that just plain suck.

 

Hopefully one day we will wake up and there will finally be that little golden checkbox when issuing a partial refund that says "include sales tax on refund". That will be a blissful day! Or even better, a box that says "apply discount code" to a past order that will issue the proper partial refund including sales tax and expire that code from the customers so they can't circumvent the coupon system. 

 

Cheers,

Sam

 

 

NataD
Tourist
3 0 3

I am thinking about starting to post on their Twitter about this problem if they have one.  At least, it will make it embarrassing for them