## Documentation Index

Access the complete documentation index at:
https://www.zoho.com/bh/books/kb/llms.txt

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# How do I issue a refund for returned goods?

A refund for goods returned to you by the customer can be issued in the form of credit notes.

If you’ve enabled [inventory tracking](https://www.zoho.com/books/help/items/#create-item) for your items in Zoho Books, you can raise a credit note towards an item returned by a customer; the stock level for this item will be adjusted accordingly.

A Credit Note can be created for the refund considering the following cases.

1.  **When the Invoice is Unpaid**

When a customer partially or fully returns the goods you’ve supplied, before making any payments for the sale, you can create a credit note accordingly. Here’s how:

*   Scroll down to the _Sales_ module from the left sidebar, and open the **Invoices** module.
*   Open the corresponding invoice for which you wish to record the return of goods.
*   Click the _More_ icon and then click **Create Credit Note**.
*   This will take you to the _New Credit Note_ page.
*   Under _Item Details_, specify the exact quantity that has been returned and create the credit note.

When a credit note is created for an **Unpaid** invoice, the stock is returned to inventory, the status of the invoice will be marked as **Paid** or **Partially Paid** based on the quantity / value returned and status of the credit note will change to **Closed**. This is because the “credits” present in the credit note, will get applied to the invoice automatically, thus reducing the value of the invoice.

2.  **When the Invoice is Paid**

When the invoice is already paid by the customer and the customer returns the goods, you can follow the same steps to create a credit note as mentioned before and then record the refund for the credit note.

*   Go to the _Sales_ module and click **Credit Notes**.
*   Select the credit note you want to refund.
*   Click the _More_ icon and then click **Refund**.
*   Enter the amount to refund and the cash/ bank account from which to refund.
*   Click **Save.**

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