I recently sold an item at an outdoor antique show and sold the same item on Etsy the same day. I notified the buyer of the dilemma and refunded her money as soon as it her payment hit my bank account. I thought this would complete the order on Etsy but I was mistaken as I did not know the proper procedure to avoid a strike against my seller status. Even though I refunded her order the item kept showing up to be shipped and was late. I tried everything I knew and even tried the complete tab but the system kept asking for a tracking number. I finally contacted Etsy today only to learn that I should have canceled the order before I refunded it. Since I did not do it in that order my seller badge took a hit. I think this is wrong. Once I refund an order in full it automatically should be canceled. I am asked why it was being refunded and I stated so when I was processing the refund. I am asking Etsy to correct this issue. Once an item have been refunded in full it should automatically complete the item. This added step is confusing and hurts the seller as it did me.
You also have to cancel.
Sorry this has happened to you. You need to think long and hard about listing things here that you are also selling in person. I know others do it, but this is the problem you will run into.
You have to cancel the order as marking it as complete - it isn't because you were not able to complete the order.
" Once I refund an order in full it automatically should be canceled..."
It has never worked that way here. Refunding has never canceled the order as there may be times when an order needs to be refunded in full but not canceled. Canceling is what moves the order out of open orders into the completed orders tab. If the order remained in your open orders then showed overdue for shipping then of course it would be counted. It was still an open order. Unfortunately etsy will not correct the issue or adjust any star seller bits. as the system is completely automated.
For future reference if you use the one step cancel option (meaning cancel the order first vs refunding first) then it will cancel the order and also issue a full refund.
You can always put your shop on vacation mode when you know you are going to be selling In Person (I used to go to Topsfield in Mass) and shop my heart out.
Keep some sort of log that you have with you of items you sell there and that are also IN your shop here. Before you take the shop OFF of vacation mode delete anything that you sold in person. Then you are only out the .20 cents listing fee. Re-open your shop and you are alls et to go.