Hi there, JPWelter.

Welcome to the QuickBooks Community and I appreciate you for performing the instructions above to process customer refunds in QuickBooks Online. Let's conduct another step to ensure you can verify why the refund appears as unapplied on your end. This way, you're able to make sure that your customer's data stays accurate.

As per the statement you've shared, it appears you have successfully completed the steps for refunding the customer's overpayment. In this situation, you should be able to view accurate data in your Profit and Loss statement.

I recommend running the P&L report and clicking the refund or amount shown on the unapplied cash payment revenue to verify where it's coming from, then you can see the details about why the refund appears under unapplied cash payment income on the report. From there, may I ask for screenshots on your end so I can provide extra accurate troubleshooting steps to be performed to fix your issue?

Furthermore, you can open this article to view different methods on how you can handle a refund based on various scenarios: Record a customer refund in QuickBooks Online.

Lastly, you may refer to this article to see details on how the Sales page gives you a great at-a-glance view of the status of your sales transactions, like open and paid invoices: View sales transactions.

I’ll be around to help if you need further assistance with managing your customer's refund in QBO. Just add them to your reply below, JPWelter. Keep safe always!