Maybe I'm missing something here. Is there no way to issue a refund (credit memo) for an order that's marked as complete?
I shipped the item, marked it as shipped in Magento, which changed the status to complete. Now the customer is unhappy with the purchase, so I've refunded him in PayPal but I need a way to reflect this in the store's admin. I see no "Credit memo" button when I look at either the order or the invoice. Surely there has to be a way? Otherwise my stats are showing a profit for something I've not made any money from??
The best way to control the Credit memos is to access Sales > Invoice.
Find the Invoice (order you want to refund) > Open it, and press the "Creditmemo" button at the top of the invoice page.
Let me know if this works for you ?