Chapter 29
I took a return and last month's profit moved.
It can, and whether it does comes down to one thing: the date on the return document, and whether the month it lands in has been closed.
A return is subtracted from BOTH sides — the sale comes off your revenue and the goods come back onto your shelves at what they cost when they left. It belongs to the month its own document is dated in, so a return dated into last month changes last month, right up until you close that month.
A return comes off both sides
A shirt bought and given back has not been sold. The money comes off your takings, and the goods come back into stock at exactly what that shirt cost you when it went out — not at today's cost, and not at what it was sold for.
Both halves matter. A report that took the money off and left the cost behind would show a heavily-returned product as your most profitable one, which is the opposite of the truth and exactly the kind of wrong number somebody would act on.
Profit belongs to the date on the document
This is the answer to the question in the title. Every report over a period gathers documents by their own date, not by the day somebody typed them in. A return dated today lands in today's month. A return dated the twenty-eighth of last month lands in last month, and last month's profit changes.
Nothing about that is a fault, and it is often what you want: goods really did come back against a sale that really was made then. What it means in practice is that a return's date is a decision, and the person entering it should be told which date to use rather than left to pick.
Closing the month is what freezes it
Once you close a month, nothing can be written into it. A return dated into a closed month is refused, with the period named, rather than quietly landing somewhere else.
So the rule is simple: an open month can still move, and a closed month cannot. If last month's profit moving is a problem for you, the answer is not to avoid returns — it is to close the month once you are satisfied with it.
What the customer gets back is what they paid
A refund mirrors the original line, including any discount that was on it. Two shirts sold at 440 with 100 off, which the customer paid 780 for, come back as 780 and not as 880. Anything else would be handing back money the shop never took.
A giveaway comes back worth nothing, and reads as a loss
The free shirt from a buy-two-get-one refunds nothing, because nothing was paid for it. On the profit-by-product report that same line shows revenue of zero against goods that cost real money — a negative figure.
That negative is correct and it is worth looking at. It is what the promotion cost you, against that product, and a report that hid it would make every offer look free to run.
⚠ What is NOT undone
The promotion is not unwound. If a customer bought two shirts, was given a third, and brings one of the paid ones back, they keep two shirts for the price of one — which is more generous than the offer was.
That is a decision, not an oversight: a document that has been issued is not rewritten afterwards. The difference the shop absorbs is part of the cost of running the offer, and a shop unwilling to absorb it should not run that offer. Knowing this before you design a promotion is much cheaper than finding it out afterwards.
What to watch
Read the profit-by-product report net, which is how it comes, and look at the return counts beside the margins. A product with a healthy margin and a high return rate is not a healthy product — it is one you are selling twice and being paid for once, and the cost of that shows up in staff time long before it shows up in the margin.