How are product costs handled when an order is returned in MerchantSpring?

When a product is returned, MerchantSpring does not reverse or deduct the original product cost that was recorded at the time of sale.

What Happens to Product Costs on Return?

• When an order is placed:
  • The product cost (COGS) is recorded in reporting
• If that same unit is later returned:
  • The original cost remains recorded
  • It is not reversed or removed

How Returns Are Handled Instead

Rather than reversing the original transaction:

• Amazon processes the return separately
• If applicable, Amazon may issue a reimbursement after:
  • The item is received
  • It is assessed for resale suitability

Where This Appears in MerchantSpring

• Reimbursements are shown as a separate line item
• This appears in reports such as the Profit & Loss (P&L) report

Why This Approach Is Used

This reflects how Amazon provides financial data:

• Returns, refunds, and reimbursements are treated as separate financial events
• MerchantSpring mirrors this structure rather than modifying historical transactions

What This Means for Your Reporting

• Profitability may temporarily decrease when a return occurs
• Reimbursements (if issued) will later offset this impact
• Timing differences can occur between:
  • The return event
  • The reimbursement being recorded

Notes

• Not all returns result in a reimbursement
• Reimbursements may take time to appear
• Always review financial event data for a complete view of returns impact