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Accounting for Shopify Pending Refunds

According to Shopify:

“When you issue a refund through Shopify Payments, the refunded amount is deducted from your next available payout. Initially, the refund status will be marked as Pending for up to 2 business days, during which the funds are processed back to your customer.”

During this 2-day period, the refund is created, but the funds have not yet been issued to the customer. Bookkeep monitors pending refunds and automatically updates your records once the refund is processed and approved. This ensures that refunds are recorded on the correct date and that Bookkeep entries align with the Shopify Finance Summary.y.

Pending Refund Scenario​

When accounting for refunds, you may encounter a situation where the refund is created but the actual funds have not yet been transferred back to the customer. In Bookkeep, this commonly appears as an order adjustment under refunds.

For example, an order may have:

  • $84.00 for products refunded

  • $10.08 for shipping refunded (which reduces the shipping income line)

  • Total refunded: $94.08

Screenshot showing an order adjustment under refunds in Bookkeep

Refund Completion​

Once the refund transaction is processed and no longer pending, Bookkeep automatically updates the respective journal entry to capture the refund being completed. This process may span multiple days: the refund is initially captured on the first day, and the issuance of funds occurs on a later date.

In Shopify, you may see the following indicating that a refund is in a pending state for an order:

Screenshot indicating a pending refund state in a Shopify order

This order adjustment of 94.08 shown above represents this pending refund.

Once the refund transaction is approved in Shopify, you will see this on the individual order as shown below:

Screenshot showing an approved order adjustment in Shopify

Updated Journal Entry in Bookkeep​

Once Bookkeep receives confirmation from Shopify that the pending refund is completed, it reruns the journal entry for the affected day. In the updated entry:

  • The Returns line no longer includes the order adjustment subcategory.

  • The $94.08 pending refund now appears in the Pending Payments balance, since the funds were not paid out on June 12.

Screenshot showing the updated journal entry in Bookkeep

Final Refund Funds Movement​

On June 13th, the refund transaction was approved, which reversed the pending payments amount from June 12 (shown at the bottom of the image) and reduced the Shopify Payments Balance since the funds were issued back to the customer.

Screenshot showing the refund confirmation in Shopify

The refund is corroborated in Shopify on the 13th when the funds were actually returned to the customer.

Screenshot of refund issued to customer in Shopify

How Bookkeep Handles Pending Refunds​

  • Updates the initial journal entry once Shopify confirms the refund is approved.

  • Adjusts Pending Payments to reflect the outstanding refund until funds are paid out.

  • Reduces the Shopify Payments Balance once the refund is issued to the customer.

This demonstrates the complexity of pending refunds, as the full refund impact can span multiple days, but Bookkeep ensures the entire impact is accurately captured for your Shopify store.

Need Help?​

If you have any questions about Shopify pending refunds, contact [email protected] for assistance.