You have two options for reporting your revenue. I prefer to report the entire amount I received as income and deduct the reimbursement as an expense. (I actually put it on the line for "returns and allowances" because technically you "returned" that portion when you paid the company you shopped. But there are other ways it could be deducted.)
It's also possible to subtract the reimbursements from the amount you got, report that as the income and disregard what you paid out. But then you're in the position where what went through the bank, and what may be on a 1099 if you got one, is bigger than what you're reporting. This is why I prefer to declare the whole payment and deduct the expense separately.
If the tax preparer who is being quoted here was not claiming the full payment as income, then it would not be right to deduct the reimbursed amount and what was quoted is correct under those circumstances. If they did claim the full payment as income, then they are incorrect to say you can't deduct the reimbursed amount that you paid out.
This is why it is very important to get advice from your own tax preparer because what one preparer told one shopper about their situation may not be correct for another shopper unless their return was being prepared in the same way.
If you think of it as you only have to pay tax on the amount you got to keep, maybe that will clarify it in your mind.
I am a bit bothered by this statement of OP: I understand tracking income and reasonable business deductions with the goal to show under a $400 profit to avoid paying self employment tax.
The goal of working should be to make money. Making money means paying taxes. You will be far better off financially to generate a profit of $4000 and pay taxes on it than to make only $399 and not pay taxes. Why? Because the tax rate is not 100%. Even if your tax bracket was 40% and you paid the 15.4% SE tax on top of that, you still get to keep the other 44.6%, which is over $1700.
Would you rather have $1700 in the bank after paying taxes or only $350?
Please discuss this with your own tax preparer as there are a lot of components to a tax return and they interact with each other. The tax you would end up with depends on the totality of your situation -- married or single? children or not? other dependents or not? other income? investment losses?
If you have kids you may qualify for earned income credit, which can actually create the situation where the more you earn, the bigger the refund, not the bigger the tax bill. If you don't yet have enough SS credits to qualify for benefits, you are better off to make over $1250(?) and pay the SE tax so you get a credit. (Not sure if it's $1250 or 1280 or some other figure, you can look it up)
So don't be so quick to assume that minimizing your income is always the best thing. For one thing, it works against your profit motive if you keep filing tax returns with less than $400 net when you have possibly a few thousand in gross income.
Talk to your tax preparer.
Time to build a bigger bridge.