How to Create a Credit Note for a Shopify Refund

You refunded an order in Shopify. The money went back, the order shows “Refunded” or “Partially refunded”, and then your accountant asks for the credit note. If you issue invoices for your orders, a refund usually needs its own document too: a credit note that says what was refunded and which invoice it corrects.

This guide explains what Shopify records when you refund, what a credit note needs to show, and how to create one for full and partial refunds. It is practical guidance, not tax advice; your accountant knows the rules for your country.

What Shopify records when you refund

In Shopify you can refund an entire order or part of it from the order page. The refund screen lets you pick items and quantities, choose whether to restock them, refund shipping, and edit the refund total, for example to keep a restocking fee.

All of that is stored on the order as a refund. What Shopify does not hand you is a credit note: a document with its own number that refers to your invoice. Shopify’s own Order Printer comes with an invoice, a packing slip and a pick list template, and no credit note. So the credit note is something you create, by hand, with a custom template, or with an app.

What a credit note must show

For EU businesses, the European Commission’s VAT invoicing page says that a document amending an invoice must carry a specific, unambiguous reference to the initial invoice and the details that are being amended. Combined with the usual invoice details, a credit note typically shows:

• its own number, from a credit note series, and its issue date;
• the number and date of the invoice it corrects;
• your business details and VAT number, and the buyer’s details as on the invoice;
• the refunded items and quantities, with their prices;
• refunded shipping, if any;
• the VAT refunded, per rate;
• the total refunded.

Your country may add rules, such as wording or how negative amounts are shown. Ask your accountant once and build that into your template.

Step by step: one credit note per refund

1. Refund in Shopify first. The refund is the source of truth for what went back. Do not write a credit note for an amount you have not refunded yet.
2. Find the invoice. Note its number and date. If no invoice was issued for the order, ask your accountant whether a credit note is needed at all.
3. Take the next credit note number. Use a separate series, such as CN-0001, and never reuse a number.
4. Copy what Shopify recorded. Refunded items and quantities, refunded shipping and the tax on the refund as Shopify shows them. Do not recalculate VAT with a flat rate; discounts and rounding make it drift by cents.
5. Account for the rest. If you refunded more than the items and shipping, for example a goodwill amount, show it as its own line so the credit note adds up to the money that went back.
6. Send it and keep it. Email the PDF to the buyer if your process requires it, and file it next to the invoice.

Partial refunds and several refunds

An order can be refunded more than once: one item this week, shipping next week. Treat each refund as its own credit note, each with its own number and each referring to the same invoice. It keeps the documents matching your payment records one to one, and your accountant can follow the order’s history.

Correcting a wrong invoice

The same tool fixes mistakes. If an invoice went out with a wrong amount, do not edit it and send it again under the same number. Refund the difference in Shopify, issue a credit note for it, and the invoice and credit note together show what was really charged. If the buyer’s details on the invoice were wrong, ask your accountant whether a full credit note and a new invoice are expected.

Doing it by hand: where it goes wrong

A spreadsheet or word processor works for the odd refund. Watch out for:

• Numbers taken twice when two people write credit notes at the same time.
• Amounts that differ by cents from what Shopify refunded.
• Missing references to the invoice.
• Lost files when the accountant asks for last March.

Where Paperly: Invoice Order Printer fits

Paperly: Invoice Order Printer issues credit notes from Shopify refunds.

• One credit note for each refund on the order, with the refunded items, refunded shipping and taxes as Shopify recorded them. An amount refunded beyond them gets its own line, so the credit note adds up to what was refunded.
• Its own series: each credit note takes a number from the credit note series and refers to the order’s invoice when one was issued.
• Automatic if you want: a credit note can be issued as soon as a refund is created, and emailed to the buyer.
• Kept unchanged: issued credit notes and invoices are stored for 10 years and download again as the same file, with a monthly export for your accountant.
• Invoices too: gapless invoice numbers, EU VAT notes such as reverse charge, and documents in 23 languages.

It does not calculate tax, and an issued document cannot be edited; a correction is a refund and a credit note. See Paperly: Invoice Order Printer for the details, and our post on sequential invoice numbers in Shopify for setting up the series.

FAQ

Does Shopify create credit notes automatically? Shopify records refunds on the order. A numbered credit note document that refers to the invoice comes from a template you build or an app.

Is a refund receipt the same as a credit note? A receipt confirms the money went back. A credit note is an accounting document with its own number that corrects a specific invoice.

Do I need a credit note for a partial refund? If you issued an invoice for the order, a partial refund usually changes it, so a credit note for the refunded part is the common way to record it. Confirm with your accountant.

Can I edit an invoice instead of issuing a credit note? An issued invoice should stay as it was sent. Correct it with a credit note and, if needed, a new invoice.