You are completely correct! The method @PDP_Bookkeeper@mjsupplyco mentioned causes gross sales to be x2 and the refunds to be overinflated. Just traded one issue for another. The discrepancy is way worse this way as well as it’s 2X larger gross sales on that order where the edit took place be exchanging the item.
Since partial refunds don’t subtract the appropriate amount of sales tax, guess where this partial refund comes from? Net sales! Thus net sales will always be underreported and sales tax remains untouched thus overreported. I feel like I’m in a black mirror episode. Come on @Shopify_77 . Don’t you know of any CPA’s or bookkeepers that understand accounting, it’s comical at this point.
I’m reading complaints from 2018, that’s 5 years ago! I guarantee soo many small merchants are overpaying sales tax by counting on their Shopify Reports. And for those that understand what’s going on, they need the extra administrative burden to untangle their accounting systems.
I’m with you 100% with all the points you mentioned. Shopify is making this so painful for us merchants. I’m honestly in disbelief that this thread doesn’t have 100,000 angry merchants complaining about this?
How is this not front line news, it’s horrible! We can’t adjust the sales tax out of partial refund and expire coupon codes for customers. The largest issue of them all is the reports being 100% skewed. There is nothing worse than having incorrect financial information. Every single merchant who has ever issued a partial refund will have under-reported net sales and over-reported sales tax.
This sounds like the best news yet. On the 6th time of reaching out to @Shopify Support in frustration regarding these issues, showing the detailed screen recordings on how the reports are skewed. I finally got an answer that looks promising.
I’ve attached a screenshot of our conversation and you can see outlined in green that they have determined the issue and plan to fix it within 48 hours. I can’t believe my eyes when I read this.
I’m not going to count on it but this seems very promising!! I guess we’ll wait and see.
I just tested it and nothing has changed unfortunately. Support mentioned to reach back out if there are any issues so I’m reaching back out to support now. I need to get a clear understanding of what “issues” they are fixing with the reports and analytics because his response was rather generic.
Support responded to my complaint that they “determined a wider issue that was effecting the analytic dashboard as a whole”. It wasn’t very clear what that even meant and I told them "The only way to fix this is to add a checkbox on the refund page that says “apply coupon code to order” and/or “refund sales tax” or something like this. There has to be some sort of check box on the refund page to instruct the database on what to do. So if there isn’t some kind of checkbox on the refund page to select, the issue will never be fixed, unless the refund is automatically refunding the sales tax by default. That’s a possibility. But I just tested it and nothing has changed.
In the back of my mind I was definitely hesitant to think that my complaints would cause the reports feature in Shopify to finally be noticed and to be completely revamped and fixed, but that’s what he said! I don’t think all hope is gone since why would he say that statement that they are fixing it in 48 hours, that’s a bold statement I don’t think staff would say for no reason. But I also don’t know what “issue” they are changing to the reports as it wasn’t clearly stated to me.
I’ll keep checking and testing but I think it will take more than week to get somewhere with this.
We’ll stay connected for sure, hope to get some good news soon!
Thanks for the update, and the continued trials on the system! Hopefully, the right person has finally gotten involved; and will take action finally get this issue resolved!!
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.
I am with you on this. We just recently moved our ecomm on Shopify, and I wish I had known about this problem before we committed to Shopify. It’s insane for our accounting department to manually make adjustments in Avalara because Shopify doesn’t have this functionality. The fact this problem has been known for years and they have done NOTHING to fix it, makes me think they don’t care about their customer at all.
This is also a huge problem for my shop and my accountant is always getting frustrated with this system.
We are a high volume / high dollar value store. Tax reporting on partial refunds (with restocking fees) is also a pain for us, as we are trying to use the Shopify finance report for our bookkeeping. Tracking this externally is not a good solution as my accountant has to spend time sifting through the orders to find the amounts and break them out themselves on quickbooks. Which every month leads to continued frustrations on both ends.
We would very much like to see accurate tax reports that would pass CRA / IRS scrutiny. Handling tax amounts on partial refunds is a must for this platform.
We got tired of waiting for this to get addressed, so we built an app that processes partial refunds with taxes and generates a report that keeps track of all taxes refunded for proper accounting and tax compliance.
Has anyone used the app Refundably, it does appear to solve the no tax on partial refunds issue? Can anyone tell me if Refundably will work with Avalara?
