Groupon on Friday revised its Q4 results, citing an unexpected number of refunds in the latter part of 2011. The company’s bad news led to an 8.5% drop in Groupon stock during after-hours trading.

The company’s performance revision cut Q4 revenue results to $492.2 million, a loss of $14.3 million from the company’s original $506.3 million. The company also reported that net income fell by $22.6 million, an equivalent of 4 cents per share.

According to a company statement:

“The revisions are primarily related to an increase to the company’s refund reserve accrual to reflect a shift in the company’s fourth quarter deal mix and higher price point offers, which have higher refund rates.”

Essentially Groupon executives didn’t set aside enough money to pay back customers who requested refunds.

Accounting practices have been a slippery slope for Groupon and the company hired accounting firm Ernst & Young to oversee its operations in 2011.