Returns vs Refunds in Lifetimely and Shopify

Refunds and returns are processed differently in Lifetimely and Shopify, which can result in differences in financial reporting. This guide explains how refunds are tracked, key differences between the platforms, and how settings impact your reports.

Key Differences

• Shopify records refunds and returns separately to manage both inventory and financial data.
• Lifetimely prioritizes revenue and profitability tracking, recording only refunds that impact financial outcomes.

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How This Affects Your Reports

✅ Lifetimely tracks only revenue-impacting refunds, excluding returns that do not result in a refund.

✅ Reports reflect actual revenue loss, preventing inflated sales due to pending returns.

🚨 Shopify may temporarily display higher sales since returned items remain in sales totals until refunded. 

🚨 Lifetimely adjusts net sales as soon as a refund is processed, ensuring revenue figures remain accurate.

Due to these differences, sales and refund totals in Shopify and Lifetimely may not always match in real time.

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How Lifetimely Tracks Refunds

Lifetimely ensures accurate reporting by tracking refunds based on both their processing and order dates.

Retrieving Refund Data

• Refund data is collected and filtered to retain only relevant transactions.

Valid Refunds

• Only successfully processed refunds are included in reports.
• If a refund amount is modified, the latest value is reflected.
• Refunds outside the reporting period are excluded.

Example:

• A $50 refund is processed on Jan 1st, and an additional $30 refund on Jan 8th.
• A report for Jan 1st - Jan 5th will only display the $50 refund.

Refund Date Assignment

• Default: Refunds are recorded based on their processing date.
• Alternative: Enabling "Assign refunds to the original order date" aligns refunds with the original order date.

Refunds & Product Costs (COGS)

• Reset product costs for refunded orders → Excludes refunded orders from COGS calculations.
• Restocked items → Removed to prevent double-counting inventory.

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Key Differences & Why It Matters

Lifetimely and Shopify manage refunds differently, leading to potential reporting discrepancies.

Refund Timing Impacts Sales

• Shopify logs refunds when processed.
• Lifetimely allows selection of either the original order date or processing date.

Returns vs. Refunds Impact Sales Figures

• Shopify tracks returns separately, even before a refund is issued.
• Lifetimely only adjusts net sales once a refund has been processed.

Refunds Affect COGS & Profitability

• Shopify updates inventory and COGS upon refunds and restocks.
• Lifetimely tracks refunds independently to ensure accurate profitability calculations.

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Adjusting Your Settings

To configure refund tracking to align with your business processes, navigate to:
👉 Lifetimely > Settings > Calculation Logic

Assign Refunds to the Original Order Date

• Enabled: Refunds appear on the original order date to match sales trends.
• Disabled (default): Refunds appear on the processing date, mirroring Shopify’s approach.

Reset Product Costs to Zero for Refunded Orders

• Enabled: Refund-related product costs are excluded from COGS.
• Disabled (default): Product costs reset only if the refunded item was restocked.

Example:

• A refund on Jan 10th for an order placed on Jan 5th:
  • If "Assign refunds to the original order date" is enabled → Refund appears in Jan 5th’s data.
  • If disabled → Refund is reported on Jan 10th.

Note: Refunds pending in Shopify will not sync until finalized. This is an informational message.

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What Does This Mean for You?

By understanding how Lifetimely and Shopify track refunds, you can:

✅ Ensure sales, refunds, and COGS align with financial expectations.

✅ Adjust settings to suit your business’s profitability tracking needs.

✅ Minimize discrepancies when comparing data across platforms.

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Need assistance? Contact our support team for further guidance!