How does return factor into cost of goods sold report?

Shopify Discussion
1

Hi!

So I found the cost of goods sold report in my analytics.

What I’m wondering is how returns factor into this.

Let’s say I sell 10 items with a cost of goods of $100 each. So my total cost of goods sold is $1000.

But during this time period, 3 items come back. I refund the customer less a restock fee if $20 (this fee does NOT impact cost of goods as it only impacts profit).

Will the cost of goods sold report show a total of $700? (Which would be 10 sales at $100 minus the three that came back ($300 total)?

And if so, what is the proper way to handle the return to get this to show? Right now I don’t restock items through Shopify. I just do a partial refund of their total less my restock fee. So I worry that may muddle up the report.

Thanks!