It appears QBO Simple Start can now process a refund that appears in your bank statement.

Just process it like a purchase except it is a credit/refund with a negative amount and it seems to work fine.

It looks like Intuit fixed the problem.

the only difference I can see is in the account list. the transaction type using a Journal entry shows 'journal' and just processing it from the bank account, it shows as a 'Deposit' transaction type. Neither way shows a negative entry on the 'Supplier' details, I thought that was a bit odd.