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Help: Refunds of cash sales produces unwanted stock adjustments

This is an off shoot of a post in the accounting section.https://usergroup.netsuite.com/users/showthread.php?t=12352

But more people read the web site pages than accounting [can't think why ] and I need help from someone who does B2C ecommerce and has to deal with refunds to customers from a cash sale for goods nor recieved, shipped or returned?

What happens at the moment?

When ever we refund a customer for an item, the On Hand stock level is adjusted as if this product was added to shelf.

What problems does that cause?
Often we are refunding for items that were never dispatched because we could not fulfill a back order, or because they were lost or destroyed during shipping.  But the money was taken as a cash sale before this refund.  Therefore we do not want to add to our stock level but we do want to be able to refund the cash (all be it begrudgingly)

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