Refunded revenue

In plain words

Refunded revenue is what you gave back on an order, as revenue. On Shopify a refund can be for line items, shipping or an amount with no lines at all. Each is read after discounts and before tax, so it is comparable with the revenue the order was booked at.

A refund reduces revenue and leaves cost alone. The unit was made, picked, packed and shipped, whether it comes back or not. That's why a heavily refunded offer can lose money on orders that looked profitable at checkout.

Formula

• Net realized revenue = realized revenue − refunded revenue
• Realized profit = net realized revenue − realized cost

Worked example

The $40.00 bag's realized cost is $22.64: goods, fulfilment and card fees, with no reserve, because its refunds are now actual. Without a refund it earns $17.36.

A $10.00 partial refund leaves net revenue of $30.00 and profit of $7.36. A full refund leaves −$22.64: the whole cost with no revenue against it.

Computed by the margin engine in Offer Suite's own code, in whole cents, from a $40.00 bag of coffee with a $12.00 unit cost.

Refunded revenue is not a returned-goods credit

If a refunded unit comes back sellable and goes back on the shelf, some of its cost is recovered. Offer Suite does not credit that yet; it is an open item in its money definitions. Until then, realized cost treats every refunded unit as spent.

Using it

Report it per offer, not only per store. An offer that attracts buyers who return more, such as a steep discount on a size-sensitive product, can look profitable at checkout and lose money a month later. Watch the refunded share by option and by first order and renewal, next to realized profit.

In Offer Suite

Offer Suite reads refunds from every order update and credits a refunded line only to the stored line it names, up to that line's quantity. Units an order edit added are shown apart and not netted.

Source: Offer Suite's money definitions (decision 41), checked against real Shopify orders.