Zoho Inventory


A customer has requested a refund for receiving an expired product. How do I handle this in Zoho Inventory?

Assumption: The shipment has been delivered and the invoice has been paid.

Step 1: Create a sales return

  • Navigate to the sales order.
  • Open the sales order.
  • Click on Create > Sales Return.
  • Enable the option ‘This sales return contains credit-only goods’.
  • If any item was damaged/expired, enter the damaged quantity in the Credit-Only field for that item. This quantity won’t be taken into stock.

Insight: In this case, you have to record a sales return even though there is no return initiated for the product. Since you have specified the quantity returned under ‘Credit-Only’, it will not be taken back into stock. Hence, it’s the same as the customer not returning it. This step is essential to create a credit note for the item.

  • Click Save.

Step 2: Create a credit note

  • Open the sales return.
  • Click on More > Create Credit Note.
  • Save the credit note.

Step 3: Record a refund

To record a refund:

  • Open the above credit note.
  • Click on More > Refund.
  • Enter the refund amount and select the expense account.
  • Click Save to record the refund.

The return process is complete.