Processing a Customer Refund

Add a new line to the order, by  clicking the inventory button (roll or item)

Find the record you used when you sold them this item and select it.

Enter a negative quantity according to the amount they returned. Enter a positive per unit dollar value, the total will be a negative value. Cut the line.

Then go to payment, and enter this amount as a discount. Note the GL account code below discounts.

Create a payable to this customer and use this GL account code.