---
title: "Vendor Returns and Credits"
slug: "vendor-returns-and-credits"
updated: 2023-12-20T16:46:48Z
published: 2023-12-20T16:46:48Z
canonical: "www.procaresupport.com/vendor-returns-and-credits"
---

> ## Documentation Index
> Fetch the complete documentation index at: https://www.procaresupport.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Vendor Returns and Credits

When you return something to a vendor, the vendor may give you a refund check or other credit. Here’s how to record it.

## Overview

When you return merchandise to a vendor or receive a ‘store credit’, you could make a *Journal Entry* to account for it. However, if you wish to have a vendor-specific record, you may want to enter the transaction as a check (for an amoChart of Accounts)unt of zero) that reverses the original purchase.

## Before You Begin

- Cash: For a cash or check refund, or refund to your debit card, there is nothing to set up ahead of time.
- Store Credit: For a credit memo, or store credit, first create a new *Current Asset Account* (in your [Chart of Accounts](/procare-desktop/docs/chart-of-accounts)) called something like “Vendor Receivables”.
- Credit Card: If the amount is being refunded to your credit card, be sure you are using the *Contra Asset* method of tracking expenses for the card. See: [Credit Cards: Payments & Purchases](/procare-desktop/docs/credit-cards-payments-purchases)

## Vendor sends you a check (or refunds your debit card)

You’ve been issued a check for returned school supplies (or a credit was issued to your debit card). [Look Up the Vendor](/procare-desktop/docs/look-up-search-for-a-vendor) and record a check (for an amount of zero):

1. Make the check number something you reserve for these types of transactions, like 44,4444.
2. Nothing will come out of the *Checkbook,* since the transaction amount is zero (see both items marked #2 in image below).
3. Enter a negative amount to reverse the expense.
4. Enter a positive amount for the checking account to which the funds are being deposited. The increase to the checking account will be available in your [Bank Statement Reconciliation](/procare-desktop/docs/bank-statement-reconciliation) process under *Other Credits.*  

![image](https://s3.amazonaws.com/cdn.procaresoftware.com/pdfs/Support+Site+Images/Desktop/Expense+%26+Ledger/Vendor+Returns+and+Credits/Vendor+Returns+and+Credits+122023+-+1.png)

## Vendor refunds your credit card

Use the credit card contra asset as both the *Checkbook* and the offset to the expense. This decreases your expense account and increases the contra asset, reducing the balance owed on the credit card.

![image](https://s3.amazonaws.com/cdn.procaresoftware.com/pdfs/Support+Site+Images/Desktop/Expense+%26+Ledger/Vendor+Returns+and+Credits/Vendor+Returns+and+Credits+122023+-+2.png)

## Vendor issues a store credit or credit memo

1. The entry is similar to a real check received (above) with just one change, the increasing account is the vendor receivables asset you added for this purpose.

![image](https://s3.amazonaws.com/cdn.procaresoftware.com/pdfs/Support+Site+Images/Desktop/Expense+%26+Ledger/Vendor+Returns+and+Credits/Vendor+Returns+and+Credits+122023+-+3.png)

1. To *use up*  the credit (at some point in the future) enter check for an amount of zero, that pays the expense and reduces your vendor receivables.

![image](https://s3.amazonaws.com/cdn.procaresoftware.com/pdfs/Support+Site+Images/Desktop/Expense+%26+Ledger/Vendor+Returns+and+Credits/Vendor+Returns+and+Credits+122023+-+4.png)