When you -- as a seller -- give money back to a customer for merchandise they bought, but later returned, GoDaddy Bookkeeping considers that a Return.
(Please make note that a Return is NOT the kind of transaction from when you get money back from a purchase that you'd previously counted as an expense)
With our new system importing from both PayPal and eBay, refunds should be recorded into your account automatically and there should be no need for extra stress or effort on your part.
But in the event you are an old-school brick-and-mortar business that is using GoDaddy Bookkeeping track your cash inflows and outflows, you will have to do the return manually. Returns are handled in your "Income" section, using the "Returns" category. Whenever a customer returns an item, it should be recorded with this category and a negative amount. Here's how:
Click "Save" and you should see the transaction appear in your ledger. Your overall "Profit & Loss" number at the top will decrease, because you've paid out money you previously counted as income.