When a return or refund is needed at an EC store, it's very important to respond quickly and appropriately. Mishandling a refund or return can damage the trust relationship with the customer and may even lead to a serious complaint. Before opening your store, be sure to establish an internal flow for handling refunds and returns.
This article explains in detail how to process refunds and returns on Shopify, along with key points for creating a refund and return policy.
Steps for processing refunds on Shopify
The Shopify admin makes it relatively easy to process refunds. There are broadly two types of return processing.
- Refunds before the product has shipped
- Refunds and returns after the product has shipped
Refunds before the product has shipped
If the product hasn't shipped yet, the refund procedure is simple. Open the relevant order from the admin and process the cancellation and refund from "More actions > Cancel order."
Refunds after the product has shipped
If the product has already shipped, check the return policy and whether the customer wants to return the item, then proceed with the process. If a return is needed, the customer sends the product back; once it arrives, check its condition, and if there's no issue, proceed with the refund.
Open the relevant order from the admin and proceed via the "Return" button.
Following the on-screen instructions, select some or all of the items to be returned.
At the bottom of the same screen is the return shipping option selection. Here, choose to upload a return label or select no shipping required.
Click "Create return" at the top right of the same screen to complete the return process.
After that, once you've confirmed the product has arrived, click the refund button from the relevant order screen to complete the refund process.
Points to note for refunds and returns
Here are some points to keep in mind when a refund or return occurs.
Restocking inventory after a return
If the returned product is in acceptable condition and the stock quantity is restored, make sure the number is correctly reflected. If you process a refund without processing the return, the inventory won't be reflected correctly. Whenever there's a return, be sure to process it as a return in the admin.
Refunding shipping costs
Check your refund and return policy to align with the customer on whether only the product is refunded, or whether shipping costs are refunded too. In cases where the refund is due to a shipping error such as a delayed delivery, a full refund including shipping is generally preferable.
Key points for creating a refund and return policy
A refund and return policy is one of the important elements that builds trust with customers. To avoid trouble, clearly state the conditions and deadlines for refunds and which products are eligible. It's also important that the content is easy for customers to understand and feel satisfied with.
The blog article below introduces how to display other types of policies besides your refund and return policy. Please use it as a reference.
Criteria for refunds and returns
Setting clear and fair conditions for customers helps prevent trouble.
Where to display it on your Shopify store
Make sure your refund and return policy on your Shopify store is easily accessible to customers. Place a link in the store footer, or display it on the order confirmation page or in an FAQ section, so customers can check it anytime.
Including a link to your refund and return policy in newsletters and order confirmation emails also helps inform customers in advance.
Establish a response flow for refunds and returns
When it comes to customer service around refunds and returns, a prompt and courteous response helps maintain trust going forward. When you receive a refund or return request, check it right away and start processing. Report the progress to the customer as it happens, and share it internally as well.
Sending a follow-up email after a refund or return also helps build a positive relationship with the customer. Rather than responding solely according to a manual, we recommend setting up a system where you can listen to the customer's requests and respond flexibly.
Refund fees on Shopify
When processing a refund for an order paid via Shopify Payments, no fees are charged. However, the transaction fee incurred at the time of payment is not refunded.
If you want to charge the customer a refund handling fee, you can do so by manually editing the total refund amount on the refund screen. If a fee will be charged to the customer as part of a refund, be sure to state this in your refund and return policy in advance.
The blog article below explains Shopify Payments in detail. Please use it as a reference.
Process returns and refunds correctly on Shopify
Returns and refunds are one of the tasks that can't be avoided when running an EC site. However, handling them properly and promptly can also help restore trust with customers and lead to further repeat purchases.
As a way to issue refunds on Shopify, besides refunding directly to the credit card the customer used, you can also issue store credit. The blog article below explains store credit in detail. Please use it as a reference.
