Free Returned Goods Credit Note Template & Generator
A returned goods credit note reduces an invoice you already issued after a customer sends part of an order back in sellable condition. It names the return authorization, the date the goods were received and inspected, and each returned SKU at the price on the original invoice rather than today's list. The restocking fee, the outbound freight you are not crediting, and the sales tax coming off all sit on their own lines, so the remaining balance stays checkable.
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| Description | Qty | Rate | Amount |
|---|---|---|---|
| Returned product credit | 3 | $125.00 | $375.00 |
| Sales tax reversal | 1 | $30.00 | $30.00 |
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Use-case checklist
What to include in a returned goods credit note
Returns are where two ledgers drift apart. Your warehouse counts cartons, the customer's AP counts dollars, and if the credit note shows a single total neither side can tell whether you credited five chairs or six, at the invoiced price or the current one, before or after the restocking fee. The customer deducts what they believe they are owed from the next payment, that payment lands short, and someone spends an afternoon rebuilding a return that happened six weeks ago. Listing the RA number, the received date, each SKU at its invoiced price, the fee, and the tax turns the credit into something the buyer can tick off against their own copy of the invoice and the packing list they shipped back.
- customer and original invoice number
- return authorization and received date
- returned items, quantities, and original prices
- tax and total credit
- refund method or account-credit status
Example starting lines
| Description | Qty | Rate |
|---|---|---|
| Returned product credit | 3 | $125 |
| Sales tax reversal | 1 | $30 |
Complete it cleanly
Reference the original invoice and return authorization, list returned SKUs and quantities, use the original unit prices and tax treatment, and state whether the credit is refunded or left on account.
How to make a returned goods credit note in 6 steps
Open the credit note generator
Start from this page so the credit note opens with fields and sample lines already set up for retailers, wholesalers, and product sellers. No account is needed to create or preview.
Enter both parties
Add your business name, address and contact details, then the customer name and address exactly as they should appear on the record.
Add the returned goods lines
Replace each sample line with the real work or goods. Make sure the document shows customer and original invoice number, return authorization and received date, returned items, quantities, and original prices.
Check the figures
Totals calculate as you type. Confirm quantities, rates, any tax line and the final total against your own records before you send anything.
Set the reference and dates
Give the credit note a unique number and the correct date so it can be traced later and matched to related documents.
Review and download the PDF
Reference the original invoice and return authorization, list returned SKUs and quantities, use the original unit prices and tax treatment, and state whether the credit is refunded or left on account. Preview is free; a PDF download costs $4.99, or is included with Unlimited.
Worked example
A partial return on an RA, with a restocking fee held back
Cascade Foodservice Supply invoiced Marrow & Vine Cafe $2,985.62 on April 7, 2026 for a dining room refit. The cafe over-ordered seating and ordered one prep table at the wrong height, so Cascade authorized a return on RA-5121, received at the dock on April 22 and inspected the following morning.
- Invoice INV-3390 (Apr 7, 2026): goods $2,677.00, freight $148.00, sales tax $160.62
- $2,985.62
- Returned on RA-5121, received Apr 22 and inspected Apr 23: 5 stackable bistro chairs at the invoiced $88.00
- $440.00
- Returned on RA-5121: 1 stainless prep table, 48 in, at the invoiced $360.00
- $360.00
- Returned goods at original invoice prices, all received in sellable condition with original cartons
- $800.00
- Restocking fee held back, 15% of the returned goods value per the terms printed on RA-5121
- -$120.00
- Outbound freight on INV-3390, not credited on a buyer-initiated return; return freight was paid by the cafe
- $0.00
- Sales tax credited at the illustrative 6.0% rate used on INV-3390, here on the $680.00 net reduction in price
- $40.80
- Total credit, note CN-1148 (Apr 24, 2026)
- $720.80
- Applied at the cafe's request to open invoice INV-3462 ($1,910.00); balance now due
- $1,189.20
The line people get wrong is the tax. Here it is credited on the $680.00 the price actually falls by, not on the $800.00 of goods that came back, because the restocking fee stays charged. Treat both halves of that as illustrative for this example: the 6.0% rate and whether a restocking fee belongs in the taxable base at all differ by jurisdiction, so confirm your own position with your accountant before you credit.
When this document is the right choice
Use this credit note to document a reduction or reversal against an issued invoice. A credit note changes the amount owed on an earlier invoice without deleting the original record. Reference the original invoice and state the exact reason for the adjustment.
Frequently asked questions
Do I credit the price on the original invoice or the price on my current list?
Use the invoiced price every time. The credit note exists to unwind a specific invoice line, so if the chairs were billed at $88.00 they come back off at $88.00, even if the list has since moved to $94.00 or you are running a promotion this month. Crediting at today's price leaves a difference on the customer's balance that neither side can explain, and it quietly turns a return into a repricing the buyer never agreed to.
The return dropped the order below the volume tier the order was priced at. Can I claw back the discount?
Only if the tier condition was written on the order or your terms before the customer bought. If it was, handle it as its own line on the credit note, shown as a tier adjustment that reduces the credit, with the tier and the new qualifying quantity named so the buyer can check it. If it was not written down, raising it after the goods are back in your warehouse reads as a penalty invented on the spot, and it costs more in dispute time than the discount is worth.
Do I credit the freight I paid to deliver the order in the first place?
That depends on why the goods came back, and it is worth writing the rule into your return terms rather than deciding case by case. When the customer over-ordered or picked the wrong item, most sellers keep the outbound freight and ask the buyer to pay return freight, which is what the $0.00 line above shows so the buyer can see it was considered. When the return is your fault, a wrong item picked or a duplicate shipment, crediting freight along with the goods is cleaner.
Goods came back opened, or short a lid and the original carton. How do I show a reduced credit?
Put the condition on the note rather than quietly shrinking the unit price. Credit the item at its invoiced price, then take a separate deduction line naming what was missing, for example a repackaging charge of $9.00 per unit on four chairs returned without cartons. A buyer who sees $88.00 credited and $9.00 deducted can argue about the $9.00; a buyer who sees $79.00 with no explanation assumes you repriced the return and calls about the whole thing.
The customer shipped back a carton that was never on the RA. How do we handle it?
Do not fold it into the authorized lines, because the RA is the document both sides are reconciling against and a credit note should only ever carry lines that trace to an authorization number and an inspection date. Receive it, log it as an unauthorized return against the same shipment, and tell the customer that day which of three things you are doing: adding it to RA-5121 in writing, opening a second RA so it gets its own inspection record, or holding it for return at their cost. Photograph it before it goes on a shelf. If it turns out to be another supplier's goods, which happens whenever a buyer runs several vendors through one dock, say so in writing the same day rather than after it has been absorbed into your stock.
More credit note templates
Start with the closest business workflow and adjust the details.