In the instance that you want to discount an order after it has already processed, you will want to add an Admin Discount and process a Partial Refund.
As an example, suppose this customer was only supposed to $4.50 for the $5 item:

*As the admin, you also have the option to adjust any previously "Assigned Discounts". However, (similar to our example) if you are looking to add a new discount altogether, simply select the "Admin Discount" option from the modal.
Give the discount a title and the amount you want the discount to be, any tax rates and the gross will automatically be calculated for you.
In this example, discounting the $0.25 off would appear as:

After adding the discount, you will be presented with the Refund Screen modal. From here you can select where the money is refunded to, apply a refund fee, choose a refund reason, and finish processing the refund.

Refund the Discount
The Discount will be viewable under the order you applied it to. If you ever want to Remove Discount, select the button as seen below
Next, select the Refund Selected Items button
A refund Screen modal will appear, allowing you to provide a refund reasoning. You can also view how many fee(s) or discount(s) you are removing via this refund. Simply select Process to remove the discount.
Once you have removed the discount, the product will now show the balance due (in our case $0.25) and the previous discount will be grey-ed out below.
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