Hello there, @TammieMB.

I'm here to help you record a customer refund in QuickBooks Online.

If you want to refund for a paid invoice, follow the steps below:

Step 1: Enter a credit memo

1. Use the + New button.
2. Choose a Credit memo.
3. In your Customer drop-down, pick a customer's name.
4. Enter any necessary details.
5. Select Save and Close.

Note: If the customer has overpaid, you do not need the credit memo as you will already have an unapplied credit that acts as your credit memo.

Step 2: Make the refund

1. Go to + New and select Expense.
2. In the Payee field, select or enter the desired customer.
3. In the Payment Account field, select the bank the money is being refunded.
4. In the Category field, select the Debtors account (Accounts receivable).
5. In the Amount field, enter the amount of the refund.
6. In the Tax field, select the appropriate Tax (not inclusive/exclusive of tax) and hit Save.
7. Next, go to + New and select Receive payment.
8. Add the Customer and select the Payment method and Deposit to.
9. The balance should be 0 as they will cancel each other out, then select Save and Close.
10. If you have Online Banking, go to Transactions, then Bank Transactions (Take me there). Then match the record you found.

If you want to refund for goods or services for a dissatisfied customer or a customer's overpayment, you can read this article and go to the bottom part for the steps: Record a customer refund in QuickBooks Online.

I'm also adding this article to help you categorize transactions in QuickBooks Online: Categorize online bank transactions in QuickBooks Online.

Don't hesitate to comment below if you need further assistance recording a customer refund in QuickBooks Online. I'm always here to help. Have a great day.