Handling refunds and fees

How to properly account for refunds, chargebacks, and gateway fees in QuickBooks.

Refunds, chargebacks, and gateway fees are where manual integrations break down. Here’s how to handle them correctly.

The challenge

When you process a refund or chargeback:

• Revenue needs to be reversed (negative line item)
• Gateway fees are often non-refundable
• Partial refunds require precise line-item adjustments
• Tax must be reversed proportionally

Manual CSV and no-code connectors struggle with this complexity.

Manual CSV approach

For full refunds:

1. Create a credit memo in QuickBooks for the original amount
2. Manually record non-refunded gateway fees as expenses
3. Apply the credit to the original invoice/sales receipt

For partial refunds:

1. Calculate which line items were refunded
2. Create a credit memo with those specific items
3. Adjust tax and shipping proportionally
4. Record fee impact separately

Problems:

• Time-consuming for each refund
• Easy to miss fees or tax adjustments
• No audit trail connecting refund to original order

No-code connector approach

Most Zapier/Make workflows don’t handle refunds automatically. You need to:

1. Create separate automation for “refund created” trigger
2. Map refund to credit memo or negative sales receipt
3. Manually handle gateway fee offsets
4. Hope nothing breaks when Shopify updates its API

Problems:

• Brittle mapping breaks with Shopify changes
• Fees require custom logic
• Partial refunds need complex conditional workflows

Accounting-grade app approach

Apps like Webgility and A2X handle refunds automatically:

• Full refunds → automatic credit memo with proper accounting
• Partial refunds → line-item-level credit with tax adjustment
• Gateway fees → tracked and offset correctly (refundable vs non-refundable)
• Chargebacks → recorded as both revenue reversal and fee expense
• Audit trail → every refund linked to original order

Gateway fee specifics

Shopify Payments:

• 2.9% + 30¢ fee per transaction
• Refunds get 2.9% back, but 30¢ is non-refundable
• Apps handle this split automatically

Stripe:

• Similar fee structure with partial fee refunds
• Apps track gross vs net amounts

PayPal:

• Fees are non-refundable
• Apps record full fee as expense even on refunds

Best practice

If you’re processing more than 5-10 refunds per month, use an accounting-grade app. The time saved and error prevention pays for itself immediately.

Manual methods work only if refunds are rare and you’re comfortable with the reconciliation work.