Use refund and return records with order, line-item, quantity, reason, amount, tax, and refund-date fields so returned revenue can be analyzed separately from original sales.
Official answer
Refund and return reporting should preserve the relationship to the original order while keeping the refund transaction and refunded line items visible.
Useful fields include Order Name, Order Date, Refund Date, Product, SKU, Refunded Quantity, Refund Amount, Refund Tax, Return Reason, and Refund Status.
Be careful when comparing refunds to sales by date. A refund may occur weeks after the original order, so decide whether the report is based on sale date or refund date before calculating net sales.
Follow-up questions
Should refunds be reported by order date or refund date?
Use refund date for cash-flow and refund activity analysis. Use order date when evaluating the eventual net performance of the original sales cohort.
Can I report partially refunded line items?
Yes. Keep refunded quantity and refund amount at line-item level so partial refunds remain separate from fully refunded orders.