Solved: Sales tax discrepancy on returned item?

THS · ‎01-04-2019

Scenario:

Customer originally purchased 3 items, came back to exchange the Small for the Large.

Their original purchase:

Large Tee $32
Small Tee $32
XL Tee $32

Subtotal: $96.00

Sales Tax (10.1%): 9.70

Total: $105.70

This is the return receipt

Size Small: $32.00

Sales Tax (10.1%): $3.24

Subtotal: $35.24

Credited to Gift Card to use for the following exchange

This is the final purchase receipt

Size Large: $32.00

Sales Tax (10.1%): $3.23

Subtotal: $35.23

Gift Card Credit Used: $35.24

Gift Card Balance: $.01???

Any idea why this is happening? I know it's just a penny, but I hate for the customer to think that we're keeping any money from them even in such a small amount!

Any insight you can provide is welcome. Thank you!

RHatch · ‎01-05-2019

This is all because of how the system rounds the tax. Because you had multiple items in the first sale the return came back a penny higher.

The tax on $32 is 3.232 or 3.23 (rounded). On 3 items it is 9.696 which rounds to 9.70 so it is a penny more. When you returned one item it gave back the extra penny because the new tax on the two remaining items was only 6.464 or 6.46. 9.70-6.46=3.24.

I hope that helps.

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RHatch · ‎01-05-2019

This is all because of how the system rounds the tax. Because you had multiple items in the first sale the return came back a penny higher.

The tax on $32 is 3.232 or 3.23 (rounded). On 3 items it is 9.696 which rounds to 9.70 so it is a penny more. When you returned one item it gave back the extra penny because the new tax on the two remaining items was only 6.464 or 6.46. 9.70-6.46=3.24.

I hope that helps.

THS · ‎01-06-2019

Thank you so much for clearing that up for us! I knew it was something like that but couldn't wrap my brain around it. 😄

Much appreciated!!