Refunds Made

What is Refunds Made?

Refunds Made represents money returned to customers during the reporting month. Refunds can occur for various reasons: canceled subscriptions, dissatisfied customers, billing errors, or returned products. When you issue a refund, it reverses part or all of a previous transaction.

When a refund is issued:

1. Cash decreases - Money leaves your bank account or payment processor
2. Customer Balance may increase - Credit added to customer account (for some refund types)
3. Deferred Revenue may increase - Service obligation removed (for undelivered services)
4. Recognized Revenue may increase - Previously recognized revenue reversed (for delivered services)

This row appears when refunds are successfully processed, not when refund requests are made.

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Refunds Included

A refund appears in "Refunds Made" when ALL of the following are true:

1. Created this month: Refund created date is within the selected month
2. Successful refund: Refund status is "succeeded" (not pending or failed)
3. Correct account: Refund belongs to your account
4. Correct currency: Refund currency matches the selected currency

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Real-World Examples

Example 1 - Full Subscription Refund Before Service:

• Customer paid $1,200 for annual subscription on October 1
• Customer cancels same day, full refund issued
• Result in October's Report:
  • Cash - Online Payments: -$1,200 (money returned)
  • Deferred Revenue: +$1,200 (no longer owe service)

Example 2 - Partial Subscription Refund After 3 Months:

• Customer paid $1,200 for 12-month subscription
• Customer cancels after 3 months, refund for remaining 9 months = $900
• Result in Refund Month's Report:
  • Cash - Online Payments: -$900 (money returned)
  • Deferred Revenue: +$675 (9 months of undelivered service)
  • Recognized Revenue: +$225 (3 months were already recognized)

Example 3 - Order Refund with Credit:

• Customer returns $50 product ordered last month
• Refund issued as store credit instead of cash
• Result in October's Report:
  • Customer Balance: +$50 (credit for future use)
  • Cash: $0 (no money movement)

Example 4 - Check Refund Issued:

• Customer paid by check, now receiving refund by check
• Result in October's Report:
  • Cash - Offline Payments: -$200 (check issued)
  • Deferred Revenue: +$200 (service no longer owed)

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Columns Affected

Refunds Made can affect multiple columns depending on refund type and context:

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Cash - Online Payments / Offline Payments

What Does This Number Mean?

Cash in refunds shows money physically leaving your business to return to customers.

Think of it as: "Money going back to customers"

The Exact Calculation

For each online refund this month:
  Add: -1 × Refund amount

For each offline refund this month:
  Add: -1 × Refund amount

Result is shown as a NEGATIVE number (cash decreasing)

Why Is This Number Negative?

Cash is decreasing - money is flowing OUT of your business. This is the opposite of receiving payments (positive numbers).

Example:

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Customer Balance

What Does This Number Mean?

Customer Balance in refunds shows credits issued to customers instead of cash returns, or for certain types of refunds that create customer credits.

Think of it as: "Store credit instead of cash back"

When Does This Increase?

1. Non-online refunds: Offline refund methods
2. Credit note refunds: Refunds issued with credit notes
3. Order refunds: eCommerce order returns
4. Store credit policy: When you offer credit instead of cash

The Exact Calculation

For each refund this month:
  IF refund is not online
     OR has credit note
     OR is for an order:
    Add: Refund amount to Customer Balance
  ELSE:
    Add: $0

Result is shown as a POSITIVE number (credit increasing)

Example:

• Order refund: $50 → Customer Balance: +$50 (store credit issued)
• Offline refund with credit note: $100 → Customer Balance: +$100
• Regular online subscription refund: $200 → Customer Balance: $0

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Deferred Revenue

What Does This Number Mean?

Deferred Revenue in refunds shows the portion of the refund that represents undelivered services being canceled.

Think of it as: "Service we no longer owe"

The Exact Calculation

For subscription refunds, the system calculates how much service was already delivered vs. undelivered:

For subscription refunds:
  Calculate: Percent of subscription period NOT yet delivered
  Multiply: Refund amount × (1 - consumed percentage)

Result is shown as a POSITIVE number (liability decreasing)

Example - Annual Subscription Refund After 3 Months:

• Original payment: $1,200 for 12 months
• Service delivered: 3 months = 25%
• Service undelivered: 9 months = 75%
• Refund issued: $900
• Deferred Revenue: +$675 (75% of $900 = undelivered portion)

Why Is This Number Positive?

When you refund undelivered service, your liability (what you owe the customer) decreases. Decreasing a liability is shown as a positive number.

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Recognized Revenue

What Does This Number Mean?

Recognized Revenue in refunds shows the portion of the refund that represents services already delivered and previously recognized as income.

Think of it as: "Income we need to reverse"

The Exact Calculation

For subscription refunds:
  Calculate: Percent of subscription period already delivered
  Multiply: Refund amount × consumed percentage

Result is shown as a POSITIVE number (reversing negative income)

Example - Annual Subscription Refund After 3 Months:

• Original payment: $1,200 for 12 months
• Service delivered: 3 months = 25%
• Refund issued: $900
• Recognized Revenue: +$225 (25% of $900 = delivered portion being reversed)

Why Is This Number Positive?

Recognized Revenue is normally negative (income). When you reverse it due to a refund, it becomes less negative (moves toward zero), shown as a positive number in this row.

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How Subscription Refunds Are Calculated

Time-Based Subscriptions

The system calculates what percentage of the subscription period was consumed:

Consumed Percentage = (Seconds Elapsed / Total Period Seconds)

Example:

• 12-month subscription = 365 days = 31,536,000 seconds
• Customer cancels after 90 days = 7,776,000 seconds
• Consumed: 7,776,000 / 31,536,000 = 24.66%
• Undelivered: 75.34%

Refund Split:

• Deferred Revenue: 75.34% of refund (undelivered)
• Recognized Revenue: 24.66% of refund (delivered)

Shipment-Based Subscriptions

For subscriptions based on issues/shipments:

Consumed Percentage = (Shipments Delivered / Total Shipments)

Example:

• 12-issue subscription
• 3 issues delivered
• Consumed: 3 / 12 = 25%
• Undelivered: 75%

Refund Split:

• Deferred Revenue: 75% of refund (9 issues not delivered)
• Recognized Revenue: 25% of refund (3 issues already delivered)

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Special Cases

Immediate Refunds (No Service Delivered)

If a customer is refunded immediately after payment (same day, before any service):

• Deferred Revenue: +100% of refund
• Recognized Revenue: $0 (nothing was recognized yet)

Full Period Completed Refunds

If a subscription completed its full term and is then refunded:

• Deferred Revenue: $0 (everything was delivered)
• Recognized Revenue: +100% of refund (all was recognized, now reversing)

Order Refunds

eCommerce order refunds typically go to Customer Balance:

• Cash: May or may not decrease (depends on refund method)
• Customer Balance: Increases (store credit issued)

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Common Questions

Why are some refunds split between Deferred and Recognized Revenue?

A: For subscriptions, we calculate what portion of the service was already delivered:

• Delivered portion: Recognized Revenue (reversing income already earned)
• Undelivered portion: Deferred Revenue (canceling obligation)

This ensures accurate revenue recognition.

What if I refund more than the original payment?

A: The system records the actual refund amount. If you refund $150 for a $100 subscription, the full $150 appears in this row, split proportionally.

Do tax refunds appear here?

A: Refunds in this row include the full amount refunded (including any tax portion). The system doesn't separately break out tax from refunds.

What's the difference between a refund and a credit note?

• Refund: Money actually returned to customer (appears in this row)
• Credit Note: Adjustment to an invoice, may or may not involve a refund (appears in "Credit Notes" row)

Refunds can be associated with credit notes (tracked in the data).

When does a refund appear in this row?

A: Refunds appear when they're processed/created, not when requested. If a customer requests a refund October 30 but you process it November 2, it appears in November's report.

Can I see which customers received refunds?

A: Yes! If you have the appropriate permissions, there's a download icon next to the Refunds Made row that lets you export detailed transaction data.

What happens if a refund fails?

A: Failed refunds don't appear in this row. Only successful (status = "succeeded") refunds are included.

How do partial refunds work?

A: Partial refunds follow the same logic - the system calculates the consumed percentage and splits the partial refund amount accordingly between Deferred and Recognized Revenue.

What if a subscription ended before the refund?

A: If the subscription already ended, the system uses the actual end date to calculate the consumed percentage, ensuring the split accurately reflects what was delivered.

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Summary

Quick Reference:

What appears here: Successful refunds processed during the month

Inclusion criteria:

• Refund created/processed this month
• Status = succeeded
• Correct account and currency

Columns:

• Cash: Negative (money returned to customers)
• Customer Balance: Credits issued
• Deferred Revenue: Undelivered service refunded
• Recognized Revenue: Delivered service refunded (revenue reversal)

Subscription refund formula:

• Deferred: Refund × (1 - Consumed %)
• Recognized: Refund × Consumed %