Why are sales reports overstating Recognized Total when a customer uses a promo code?
This problem most commonly caused by creating an internal promotional code with set a value for Net Amount Received for Selling this Code. This field is typically used for Groupon type of deals where every coupon actually has proceeds coming from an outside service.
To solve this issue, go to Store > Events > Promotional Codes.
On this page, click on your promotional code and change Amount Received for Selling this Code to $0.