Restocking Fee COGS or Expense?

Hello, I returned a few items and the vendor/supplier credited me less a 10% restocking fee. In other words, the refund was credited to my bank account, minus the restocking fee. What is generally the most accepted way for accounting for this 10% stocking fee on a Schedule C?

1. In the COGS section, ensure the returned items are subtracted from purchases and add the restocking fee as "Other Costs."

2. In the COGS section, count the restocking fee toward purchases?`

3. In the

Expenses

section, enter the restocking fee as

Commission

and Fees (line 10)

4. In the Expenses section, enter the restocking fee under other expenses?

5. Another COGS or

Expense

accounting

method?

Thanks for the help!

Thanks much!

218

Expert Alumni

Mar 5, 2023 5:19:56 AM

Option two would be appropriate, the restocking fee is a cost associated with the goods you sold, so just add it to your purchases.

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Restocking Fee COGS or Expense?