When an overseas customer returns goods, reconcile the refund with the actual stock movement and original sale. A refund confirmation does not prove the goods were received or that all tax adjustments are correct.
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Use one case reference linking customer, order, shipment and returned items.
Confirm what the customer is returning
Compare product, quantity, condition and reason with the original order and agreed return terms. Identify partial returns and items replaced rather than refunded.
Do not restore stock automatically because the customer has initiated a return. Record the actual location and condition supported by evidence.
Example: the refund comes first
The business refunds the customer while the parcel remains with a carrier overseas. Track the pending receipt separately. The warehouse should not show available stock that has not arrived.
Prepare the return reconciliation
- Original invoice and shipment evidence.
- Return authorisation and agreed outcome.
- Refund or replacement transaction.
- Carrier and warehouse receipt records.
- Stock quantity and condition assessment.
- Related tax and import or export documents.
Assign responsibility for each missing item. A finance entry and physical receipt can occur on different dates and need a clear bridge.
Review tax treatment from the actual facts
Ask advisers about any credit-note, GST or Customs adjustment relevant to the original and return transactions. Do not assume every overseas customer sale was zero-rated or that a returned item automatically creates a tax refund.
IRAS’s GST records guidance includes credit notes and export or import records where relevant. Retain them with the return case.
Close the stock and cash differences
Reconcile platform fees, foreign exchange, freight and damaged goods separately. Ask the accountant about appropriate inventory and loss treatment.
Keep unresolved parcels or claims visible after the customer refund. A completed customer service ticket should not conceal an outstanding asset or carrier issue.
Does refunding the customer prove stock is back?
No. Obtain actual receipt and condition evidence.
Related business records guidance
Read our accounting and filing calendar guide, account mapping checklist and business handover guidance.
Get help with your business records
Email [email protected] or WhatsApp +65 8501 7133 for accounting and corporate compliance support. Tax advisers can review the relevant tax treatment, and legal advisers from associated law firms can assist with contracts and disputes.