What do you want to do in business terms?  Write off the credit?  Issue a check / refund to the customer?  Apply the credit to a future invoice?

The credit balance for the customer is your "IOU" to them.  How to get the customer back to $0 depends on how you want to deal with that "IOU".

What do you want to do in business terms?  Write off the credit?  Issue a check / refund to the customer?  Apply the credit to a future invoice?

The credit balance for the customer is your "IOU" to them.  How to get the customer back to $0 depends on how you want to deal with that "IOU".

We sell product on amazon, as orders are placed we create the sales order, and invoice it. Amazon FBA fulfills the orders. At that point, we apply payment in sage to the order. 

If a customer then returns the item back to Amazon, we do an RMA to return the item back to inventory, which then creates an open credit.

Amazon handles the returns, and then just reduces the amount of our payout by the amount of the refund. 

So, Amazon has already refunded the customer, I just need to now get the account back to $0.00

When processing your next Amazon payment, probably during a Cash Receipt, include the CM in the batch (which reduces the total amount received).  Trying to do something in advance of when you're dealing with the shortened payment will just make things more complicated.

I'm fairly new to sage, so please forgive me. When you say include the CM into the batch, what do you mean by that? 

I understand when I'm applying payments I create a batch in Cash Receipts Entry. But if you are saying to include the CM, what am I applying the CM to? The original invoice? The invoice that's zeroed out?

A negative payment amount as part of the batch.  This wipes out the AR credit, and decreases the deposit total.

Ok, Im following you. Thank you. 

So, if I do this, its not going to go against the GL code twice will it? Once from the CM and now again for the negative amount in the batch. 

One side of the CR is the AR control account, and the other is the bank code's GL account.  The only way to affect a different GL account is to add a GL line to one of the payments.

Ok got you. In the future, is there an easier way to process a "refund" in sage, for my Amazon scenario? 

As with any system, there are many ways to accomplish the same thing.  While someone else might have a different suggestion than mine, I can't imagine anything being easier than just treating the refund as a line item while entering the payments. 

Of course, talk with your CPA about what transactions they want to see in the system before considering any shortcuts.