Creating Credit Memos

Overview

After an order has been paid and invoiced, all of the order, or a portion of it, can be refunded by issuing a credit memo. A credit memo differs from a refund because the amount of the credit is restored to the customer’s account where it can be applied to future purchases, rather than returned to the customer as cash. In some cases, a refund can be given at the same time that the credit memo is issued, just as a payment can be made at the time of invoicing.

To create a credit memo:

1. From the Admin panel, select Sales > Order.
   
2. Locate the order in the list and click to open the order.
3. In the upper right, click the Credit Memo button. (The button appears only if an invoice has been generated for the order.)
   
   The New Credit Memo page looks similar to the completed order page, with an Items to Refund section that lists each item from the invoice.
4. Complete the following information.
   

   Note: If an online payment method other than Google Checkout was used, you are not able to edit these fields.

   1. If the product is to be returned to inventory, check the Return to Stock checkbox.
      

      Note: The Return to Stock checkbox appears only if you have set the inventory stock options to Decrease Stock When Order Is Placed. (See System > Configuration > Catalog > Inventory > Stock Options.)

      If the product will not be returned to inventory, leave the checkbox blank.

   2. In the Qty to Refund box, type the number of items to be returned and press the Enter key to record the change and display the Update Qty’s button.
   3. Click the Update Qty’s button to recalculate the total. (The amount to be credited cannot exceed the maximum quanity that is available for refund.)
   4. In the Refund Totals section, complete the following options, as applicable:
      
      • Refund Shipping: Enter the amount to be refunded from the shipping fee. This field initially displays the total shipping amount from the order that is available for refund. It is equal to the full Shipping Amount from the order minus the Shipping Refund, which is the amount that has already been refunded. Like the quantity, the amount can be reduced, but not increased.
        

        Note: Make sure to set Items to Refund Qty to 0 to refund only shipping amount. If you skip this, the entire order will be refunded.

      • Adjustment Refund: Enter a value to be added to the total amount refunded as an additional refund that does not apply to any particular part of the order (shipping, items, or tax). The amount entered cannot raise the Total Refund higher than the Paid Amount.
      • Adjustment Fee: Enter a value to be subtracted from the total amount refunded. This amount is not subtracted from any particular part of the order such as shipping, items, or tax.
      • If the purchase was made using store credit, select the Refund to Store Credit checkbox, to credit the amount back to the customer’s account balance.
        
5. To add a comment to the credit memo, type the text in the Credit Memo Comments box.
6. To send an email notification to the customer, do the following:
   
   1. Check the Email Copy of Credit Memo checkbox.
   2. If you want to include the comments you have entered, check the Append Comments checkbox.
   3. If you would like to receive a copy of the Credit Memo notification, enter your email address in the Send Invoice Email Copy To field.
      

      Tip: To customize the email message that is sent, see Customizing Transactional Emails.

   The status of a Credit Memo notification appears in the completed Credit Memo next to the Credit Memo number.

7. To complete the process and generate the credit memo, select one of the following refund option buttons, depending on the payment type:
   
   • Refund Offline
   • Refund Online

See also:

Printing Credit Memos

Batch Printing Invoices, Packing Slips, and Credit Memos

Creating Invoices and Packing Slips for Shipments