Anyone else notice that the new returns system breaks all of shopify sales data

Accounting & Taxes

Topic summary

Shopify’s returns system update has been causing significant accounting and reporting issues for merchants who process exchanges or store credits instead of refunds. The core problem: when returns are created or approved, Shopify immediately deducts sales from totals, even when no actual refund occurs.

Key Issues Identified:

  • Sales data becomes inaccurate for exchanges and store credit transactions
  • Sales tax reporting is broken, making quarterly tax calculations unreliable
  • Third-party returns apps (Loop, Redo) cannot properly sync with Shopify’s new system
  • One merchant reported Shopify accidentally issued an actual refund due to a system glitch
  • Merchants handling high return volumes (40%+ converting to exchanges) face severe data integrity problems

Shopify’s Response & Solution:
After months of merchant complaints, Shopify released an enhancement in late 2024. The new system only updates sales and tax records after merchants confirm item receipt and process the return—not when returns are initially created.

Implementation Timeline:

  • Immediate effect for returns created directly in Shopify admin
  • API-based returns (through apps) maintain old behavior until July 1st to allow partner adaptation

Important Note: The system still deducts returned item values from sales reports regardless of whether refunds, store credits, or exchanges are issued. Shopify recommends using the Payments Finance Report to track actual money movement.

Merchants and app developers expressed relief but await full implementation across all platforms.

Summarized with AI on October 25. AI used: claude-sonnet-4-5-20250929.
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From what I’m seeing, I can only conclude that it’s incorrect. It wasn’t happening prior to late February. At that point it happened once or twice. Since a few days into March, Shopify has accounted for virtually all returns twice each in the Cost of Goods Sold report. I don’t know if it’s just the reports that are wrong, or whether it’s sending incorrect data to integration software that also sends data onward to accounting software, because I’ve cancelled the software I was using for that in favour of doing bookkeeping manually now.

(We were using the Amaka integration for Shopify and Xero, but cancelled it for other reasons before discovering this situation with COGS - and we spent about 12 person days re-doing our bookkeeping for a nine-month period. I’ve lost count of the number of different systems I’ve tried for integrations over a 7-year period, and from that I think it’s fair to say that generally companies who describe their integration as “seamless” are brazen liars.)