Loop Returns
Once a return is initiated via the Loop Returns portal, it can result in any of the following transactions:
- Refund: The customer receives a refund back to the original payment method and the original order is updated with the details of the return.
- Exchange: A new order is created for the item the customer chose to receive with a discount for the value of the original order.
- Store Credit: The customer receives store credit in the form of a Shopify gift card.
Blue Onion provides reporting to account for each of these scenarios accurately. Below are the details of how each of these transactions are recorded in Blue Onion.
Refund
Just like every other refund, Blue Onion records the refund on the Orders section of the Journal Entry page when the refund is initiated (as well as on the Refund Data Source page). The transaction is also reconciled to the payment processor record and ultimate payout at the bank through Blue Onions reconciliation logic.
Exchange
When an exchange transaction occurs, the following transactions occur in Shopify:
- 1
- The original order in Shopify is reduced (refunded) by the value of the exchange.
- 2
- Shopify issues a refund adjustment transaction that offsets the cash impact of the refund, creating a cashless refund.
- 3
- A new order is placed for the merchandise being exchanged for and a related discount reduces the value of the order up to the original cashless refund amount.
- 4
- An additional value (upsell), is left as payable in Shopify and collected via Stripe by Loop (this transaction is not recorded by Blue Onion because it is not recorded in Shopify and the Loop API does not support reporting yet).
-
Below are the steps
Blue Onion takes to ensure proper recording of each transaction.
- 1
- Blue Onion will show the refund of the original order detail in the Refund Data Source page
- 2
- The refund adjustment is shown as an adjustment on the refund transaction from step 1, resulting in a net 0 value refund. With no value, the refund will not be recorded in the Orders of the Journal Entry page.
- 3
- The new exchange order and discount are included in the Order Journal Entry when it is placed. At this point, the value of the exchange is overstating gross revenue and discounts. Our supplementary reporting below allows users to reverse the impact of these overstatements.
- 4
- Upsell data is not reported fully in Shopify and the Loop API does not yet allow for pulling these reports. Due to these limitations, currently Blue Onion currently reports any remaining balance on the Shopify order due to upsell but cannot reconcile the Stripe payments processed by Loop.
As supplemental reporting, Blue Onion provides the impact of all Loop exchange orders on the Journal Entry page. Reversing the value of the loop exchange orders, removes the over-stated gross revenue and over-stated discounts from these duplicate transactions. This supplemental reporting is also click-through to show each transaction that meets this criteria.
Users will still need to appropriately record inventory adjustments for the returned items (if applicable) and the COGS for the new inventory sent.
Store Credit / Gift Cards
When gift cards are issued for later use by a customer, Blue Onion can also help keep a clear accounting.
At the time the refund is initiated, Blue Onion records a refund expense and the new Gift Card liability issuance.
Just like the use of all other gift cards, Blue Onion will record the redemption as a form of payment in the Orders section of the Journal Entries page.