How Does SellerLegend Handle Refunds?

🔁 How SellerLegend Handles Refunds (And Why It Works This Way)

💡 TL;DR

SellerLegend applies refunds on the date the original order was placed or shipped, not the date the refund was received. This ensures that revenue, fees, and COGS are correctly reversed in the period where the sale occurred. Refunds are reflected across dashboards and the Orders screen — but not in the Profit and Loss report.

📆 Refund Count Adjustment

If you receive a refund today, you might expect to see it in today’s dashboard — but you won’t. That’s because SellerLegend does not count refunds on the day they are received.

Instead, the refund count is assigned to the original order date. For example:

• A customer places an order on March 1

• The order is refunded on March 15

• The refund count will appear on March 1, not March 15

📌 This means tiles like Today and Yesterday won’t show refunds unless the refunded order was originally placed during that window, which is rare.

💰 Revenue, Fees, and COGS Adjustments

SellerLegend adjusts all financial aspects of a refund on the original order date:

• Revenue: Reduced on the day the order was placed/shipped

• Fees: Also adjusted on the order date — though not all fees may be refunded

• COGS (Cost of Goods Sold): Partially returned to your profit, depending on restockability

🔎 Refunds do not affect today’s revenue, fee, or COGS numbers. They only adjust the financial metrics on the original order date.

🔄 COGS Restock Assumptions

Not all refunded units are returned in sellable condition. Based on historical analysis, we have determined that 68% of refunded units are returned to inventory. Therefore, on refunds, we return the COGS amount of the unit to your profit

🧾 Refund Fees and Net Profit Impact

Even when a refund is issued, Amazon may:

• Not refund all original fees (e.g., fulfillment or referral fees)

• Charge a Refund Administration Fee for some categories

As a result, a refunded order can still generate a net negative profit, not zero. This is intentional and accurately reflects the cost of doing business on Amazon.

📊 Dashboards and Reporting

Refunds are:

• ✅ Reflected in all dashboards

• ✅ Visible in the Orders screen

• 🚫 Not included in the Profit and Loss report

Refunds are excluded from the P&L report to keep it focused on realized operational performance. This avoids distorting profitability from post-sale events like returns.

📦 Why This Behavior Changed

Previously, SellerLegend counted refunded units on the day the refund was received. However:

• This created confusion — users saw refunded units but no revenue change for that day

• Revenue and profit changes were still applied to the order date, leading to mismatches

To resolve this and align all refund effects, SellerLegend now:

• Records refunded units on the order date

• Adjusts revenue, fees, and COGS on the order date

This approach ensures consistency, clarity, and accounting accuracy across the platform.

📘 Refund Handling at a Glance