Credits, Refunds, Returns and Replacements

Sometimes, things go wrong. It’s an inevitable part of doing physical product commerce.

Sometimes, things go wrong. It’s an inevitable part of doing physical product commerce. I bet you’ve seen all of the following scenarios:

• Customer makes a mistake on order, calls before dispatch to change

• Customer makes a mistake on order, only realises once order received, wants to return

• Order gets completely lost in transit

• Some items in order get totally written off in transit

• Some items get slightly damaged in transit

• Order is delayed, customer is angry

• Customer claims when placing an order that an item was missing on the order they received one month ago

Reflecting how these scenarios play out on the system is a key part of maintaining accurate financial, stock and customer records and balances, but it can be fiendishly difficult at times, given the complexity of the scenarios.

In this guide, we walk you through the process step by step, but let’s start with a few ground rules.

Rule 1: You Can’t Change History

Whatever happened, try to reflect that as closely as possible on the system. If an item was dispatched, don’t remove it from a dispatch on an order. If a customer payment was made, don’t delete or change it to try and make the numbers balance.

You can’t change history, either in real life or in Pakk.

Rule 2: It All Starts With a Credit

Except in certain, very limited circumstances, situations of this kind are dealt with by raising a Customer Credit. That should be your first port of call. A customer credit gets the ball rolling whether you’re aiming for a refund, replacement or just a pending credit balance.

What You Can Do WITHOUT a Credit

OK, before we talk about Credits, let’s briefly discuss what you can do without a Credit.

Quick Refunds (Negative Payments)

Last minute changes to orders are common. If you change a pending customer order early on in the sales cycle, and the resulting amount is less than what they paid (you removed a line, or reduced a quantity, for example), you can do a ‘quick refund’ by entering a negative payment in the payments list (at the same time as manually refunding the money, through Stripe or Paypal, for example).

Making changes to orders that have been invoiced isn’t allowed in some jurisdictions so you should check with your account administrator whether they would like you to use this technique or not.

If the order has been dispatched, you definitely shouldn’t use this technique as you shouldn’t be changing order lines once the order has left.

Discount Lines

Another common technique that doesn’t require a credit to be raised is adding items to an order, then removing the financial impact of that addition by entering a discount line.

For example, a customer placing an order claims that on a previous order a product was damaged and that you ‘owe them a replacement’. Obviously this isn’t ideal - they should have reported the incident when it happened and it should have been logged and processed, but reality is messy and this kind of thing does come up and sometimes you want to give the customer the benefit of the doubt.

You add a replacement into the order, but this would increase the order total and thus make the order show as ‘Pending Payment’. You can negate the extra cost by entering a discount line of the same amount as the replacement.

Make sure your account administrator sets up specific discounts tied to specified cost tracking accounts, like ‘Discount for Replacement for Damaged Goods’, so that you can accurately track the costs associated, and use the correct discount for each situation.