How do I record refunds, returns and chargebacks for an online store in Hong Kong?

For each refund or return, the books should show the original sale and the reversal, not only the net amount.

• Refund before shipping or after return: reduce sales revenue by the amount refunded. If the goods come back in resalable condition, add them back to stock at cost; if not, write them off as a cost.
• Partial refund or goodwill credit: reduce sales by the credit given.
• Chargeback: the card issuer pulls the money back from the merchant account. If you dispute it and lose, record it like a refund. Payment providers usually add a separate dispute fee, which is an expense.
• Reserve or holdback: if the platform holds back part of your payout against refunds, show it as an amount owed to you, not a loss.

These entries follow ordinary accounting practice. No Hong Kong rule treats online refunds differently for profits tax: profits are measured after returns and on the figures actually earned. Keep the customer, order number, date and reason for each reversal, because the IRD or an auditor may ask.