Hi @Jeff.Martens
Welcome to the Community!
Almost there! Here’s how we do it at our house:
The first purchase is categorized as Groceries, a deduction of cash against your budget. The second transaction, the refund, is applied to the same category, Groceries, an addition of cash and restoration to the budget for that time period. The third transaction, buying the fresh item, is applied to the same category, Groceries, a deduction of cash against your budget.
No need for any other category. It all happens in the one Category-Groceries: the first two transactions cancel each other out (one positive, one negative, equal amounts), with third one telling the real story.
Use the Note column of the Transaction sheet to add comments that explain each transaction for full documentation, and you’re one your way.
Does that help?