When returns are requested and approved, Shopify immediately deducts the sales from your total sales. In theory this is fine, but what happens when you don’t refund the customer? They never add the money back to your sales total. Surely I can’t be the only one with this problem.
Does nobody else do exchanges or store credit instead of refunds?
I’m right there with you. I noticed this today, and was thoroughly annoyed with this new change. I don’t know if it’s a glitch or what, but it’s not a true reflection of the situation. If they’re going to do this for returns, then at least create an exchange button to create a distinction between the two events.
I talked to shopify chat support and they said that eventually they may get around to fixing it but that it is lower priority because it’s not considered a “major” issue, because it doesn’t affect most stores… Not really sure how it doesn’t affect other stores. I’d imagine exchanges are common. It may take a long time until we see a change.
Absolutely!!! In some countries, its not required to offer a refund. We can offer a store credit in the form of a gift card or an exchange. They need to fix this immediately, its completely throwing everything off!!!
I’m with ya, but I’ve contacted them so many times and they either don’t care or don’t understand depending on who I talk to. 
I’ve contacted them three times now, the first two times they assured me this wouldn’t affect figures. Obviously not correct and now I’m being told they are having to ask for help from their team, might have to move systems if this doesn’t change ASAP as its reporting incorrect figures to xero and my accounting team
Hey, @mattsirkin & @Sau2610 .
Thank you for reaching out and sharing this feedback.
When a return is approved, it does remove the sales from the analytics to account for the refund. While you can perform exchanges and the analytics will reflect the amount exchanged, you would need to consider a third-party app for store credits. We’d recommend something like CreditsYard. That being said, we’ve also gone ahead and shared the feedback about having store credits with our development team. If Shopify moves forward with any new features or platform changes, then we’ll be sure to announce them on the Shopify Changelog.
If you have any other questions on this topic, then don’t hesitate to let us know.
Hi Elias
So essentially you’re saying that we can offer gift cards as store credit for our customers (which Shopify have stated on several other pages), however our analytics will just have to be wrong as the returns will account for a refund that didn’t take place. It’s not a requirement for a store to offer a refund due to change of mind and a lot of stores do not support this has its very expensive to advertise online and obtain that conversion or sale.
We also don’t pay high monthly subscription fees to have incorrect information. This is only a new update as we never had this issue before. Please have the development team fix asap or we will be finding other platforms who can provide correct analytical sales information that won’t have us reporting incorrect information to our accounting team and committing fraudulent claims.
This change is by far one of the worst updates to analytics Shopify has ever made. Why not just create an exchange button alongside the return button so that there’s a differentiation of the two events? This move makes absolutely no sense, seriously. Yes, pleas give the feedback to the development team. This is a terrible move. Forgive my crassness, but I’m a bit frustrated…
I’m with you on this! It just doesn’t make any sense. They need to create an exchange button or remove this update altogether!
Extremely!!!
Some further insight from ‘Shopify’
SHOPIFY:
"After consulting with our business team, Shopify analytics records refund reports to provide merchants with precise data regarding their store’s financial performance. Even if a merchant processes a replacement for an order without issuing a refund to the customer, the original transaction must still be logged as a refund in the analytics report. This ensures that the financial data accurately reflects the order status and correctly represents the store’s revenue and expenses. By doing so, merchants can effectively monitor their store’s performance and make informed business decisions based on reliable financial data. It is important to note that Shopify analytics refund reports cannot be manually altered or deleted. This safeguard is in place to maintain the accuracy and integrity of the data within the reports. While it may be tempting to modify specific entries, it is crucial to up hold precise records to gain a clear understanding of your store’s financial performance. This same principle applies if you are going to be utilizing a third-party analytics app such as Google Analytics. If you have any additional concerns or questions, please do not hesitate to reach out to us or reply to this email. I am here to provide you with the support you need and assist you in any way possible. We highly appreciate your kind patience and understanding. Have a great day! All the best, support agent
ME:
"Thank you for your reply, but with all due respect, completely missing my concern. I’m not asking for ‘refund reports’ to be modified. Of course that information would have to remain. However our concerns, and I say our as this is recent update on RETURNS that has started to affect figures and other shopify owners have been posting this in the community thread, I am not alone, see thread link below.
Is that when a return is made and accepted in the system, its counting this as a refund, and deducting this amount on the daily sales figures. I do not give REFUNDS for returns unless the item is faulty, and a then refund is processed, but this is a rare instance. My store will only offer an exchange or store credit, as we are within our rights as outlined by the ACCC here in Australia. As there is no exchange or store credit option, credits are provided to my customers in the form of a store gift card, as advised by Shopify support staff on other threads. If an exchange is taking place, I am creating a new order in the system for them as this is required to sync to my third party warehouse and a discount for 100% of that order is applied and the product is sent. However according to my figures now, it’s deducted the amount of that item from the return when the item was never refunded. I have still kept the funds from the original order, customer has returned the item (clothing) and an alternative size has been sent free of charge. Does this make sense? Since this update about a week ago, every time I’m accepting a return request from a customer, its deducting this figure from my daily sales. These daily sales figures are integratded with my xero software so my accountants are now receiving incorrect figures from what we have sold and the funds we have received. Please see the thread below with the same concern from other community members and escalate this to the development team immediately or a lot of people will be moving away from shopify if they can’t offer an exchange or credit system. Or at least fix this return treated like a refund from daily sales figures when no refund has been given. Feel free to give me a call if you’re needing further clarification."
—LINKED TO THIS THREAD—
SHOPIFY
“I totally understand your concern. In Shopify reports, returns without refunds are still categorized as refunds because the system automatically records any partial or full refund as a refund, regardless of whether the customer received their money back. This ensures accurate record-keeping and accounting for all financial transactions in Shopify. Unfortunately, there is no way to prevent returns without refunds from being classified as refunds in Shopify reports. The platform is designed to categorize all refund transactions as refunds, even if no monetary refund is issued to the customer. This is essential for maintaining precise financial records for your store. To address returns without refunds in Shopify reports, you can create custom reports or filters within Shopify to exclude or distinguish these transactions. By customizing your reporting settings, you can analyze your data in a way that better reflects the actual financial impact of returns without refunds on your business. Alternatively, you can use separate accounting or record-keeping methods outside of Shopify to track returns without refunds. This allows you to maintain accurate financial records in your own system while still reflecting returns within Shopify for inventory and order management purposes.”
ME:
“This makes absolutely no sense though as by definition, a refund is to pay back money. If no money is paid back and the customer is still receiving a product or gift card, it is NOT a refund. Surely someone can see this is making figures INaccurate??”
—SCREENSHOT DICTIONARY DEFINITION OF REFUND—
now awaiting reply…
Update from Shopify team - basically “manually work it out” - absolute joke. How can returns be considered as a refund when no money was returned to the customer. What is going on??? Someone needs to do something!!!
That’s about what I expect. Unless this post gets hundreds of likes and comments, Shopify isn’t gonna do anything. I’ll keep reaching out to them on the chat periodically, but I know its pointless.
Will this affect our payouts if the returns are including exchanges?
Not sure. I don’t think payouts are being affected. If you choose not to refund, shopify shouldn’t take your money away. But the sales data will make it look like they did. Would be great to get confirmation on this though
This issue has had me panicking. We do more exchanges than returns and I couldn’t understand why my sales were so abysmal recently. It didn’t make any sense, and even when I totaled up my Shopify “payouts” for the month and compared them with net sales, the numbers were WAY off, and gave me some peace knowing I was getting decent payout numbers but horrid sales numbers. This IS a major issue. Screws with everything… budgeting, forecasting… I’ve been hitting the panic button on my advertising changing ads thinking it’s not working, all because my net sales in Shopify shows absurdly low (and inaccurate) numbers.
Yep, I was in panic mode too. It’s comforting knowing that Shopify is aware of the problem and has no plans to fix it lol.. At least the good news is they just raised their credit card processing fees this month 
priories in line
This change to the return system has sales reports and return reports completely broken. My sales reports are showing increases in sales when I issue refunds.
For some reason shopify support are refusing to admit there is an issue here. I’ve received responses from support ranging from “We just fixed it, it’s fine” to “if you need even more accurate reports, you could look into an app like Better Reports to show you more streamlined data with their solutions to balancing reports!” and finally my favorite “When it comes to returns, you are correct that it should show as a negative value. However, in our system, when you return an item, you are getting the item back which means you are gaining the value of the product back, so it will zero out! This is due to you being up the value of the product again, but when an order is then refunded, it creates an issue with the report as you are now down the initial order amount!”
Apparently Shopify Support thinks when an item is returned to me my sales go up by the value of that item. Absolutely ridiculous.
The last reply I got from Shopify staff was suggesting to move to a different platform entirely if we don’t like it 
So we are doing just that.