How to Refund on Shopify

As a Shopify store owner, handling refunds is an inevitable part of running your business. It’s not just about giving money back – it’s about managing customer expectations, maintaining your inventory, and keeping your financials in order.

In this guide, we’ll walk you through everything you need to know about refunding on Shopify. We’ll cover why refunds are important, when you might need to issue one, and provide a detailed process to make refunding as painless as possible.

Understanding Refunds on Shopify

Shopify lets you issue full or partial refunds.

A full refund is when you return the entire amount of the order to the customer. This includes: the cost of all items purchased, any taxes applied to the order, and (sometimes) shipping charges. Usually you see full refunds in cases where the entire order was incorrect or damaged or you couldn’t fulfill the order.

Partial refunds let you refund only a portion of the order. They’re super useful if a customer bought multiple products but only wants to return one. If that happens, you can refund just that item. Another scenario is if the order arrives late – maybe you’ll keep the product payment but refund the shipping cost.

Refunds are unavoidable, and it’s important that you get them right. If you do, you’ll build trust with your customers and even encourage repeat business. If you get them wrong, your brand and reputation will suffer.

When to Issue a Refund

There are tons of reasons why you might need to issue a refund. Maybe the item arrived damaged or the customer received the wrong product altogether. Or maybe the customer wasn’t happy with the product or even just changed their mind after buying it. Refunds are one of those things in e-commerce that you just can’t escape from. Even the very best Shopify stores have to deal with them.

One thing that store owners always say helps them save headaches down the road is when they have a clear refund policy that’s easy to find on the store’s website! You’ll save countless hours negotiating with customers about refunds that you don’t want to process.

How to Refund: Step by Step Process

Step 1: Locate the Order

First you need to find the order you want to refund:

1. Log into your Shopify admin panel
   
   
2. Click on “Orders” in the left-side menu. This will take you to the Orders page, where you can see a list of all your store’s orders.
   
   
3. Use the search bar to find the specific order
   
   You have multiple options for searching:
   
   
   • Order number: If you have the order number (it usually starts with #), type it directly into the search bar.
     
     
   • Customer name: Type in the first name, last name, or full name of the customer.
     
     
   • Email address: Enter the customer’s email address associated with the order.
     
     
4. Click on the order number to open the order details

Once you’ve found the correct order in the search results, click on the order number. This will open up the full order details page. Take a moment to make sure this is the correct order. Check the customer name, items ordered, and order date.

Step 2: Start the Refund Process

Now that you’ve found the order, it’s time to begin the refund:

1. In the order details, look for the “Refund” button (usually near the top-right)
   
   
2. Click on “Refund” to open the refund page

Step 3: Choose What to Refund

On the refund page, you’ll see a list of items from the order. Here’s what to do:

1. Check the box next to each item you want to refund
   
   
2. If you’re only refunding some items, adjust the quantity as needed
   
   
3. You can also refund shipping costs if applicable
   

Remember, you can refund the entire order or just part of it. It’s up to you and the situation.

Step 4: Restock Items (If Necessary)

If the customer is returning the item, you’ll want to add it back to your inventory:

1. Look for the “Restock items” checkbox
   
   
2. Check this box if you want the items added back to your stock
   
   
3. If you don’t see this option, you might need to enable it in your settings
   

Step 5: Choose the Refund Method

Shopify gives you options for how to refund the money:

1. Original payment method: This sends the money back to the customer’s credit card or original payment method.
   
   
2. Manual refund: Use this if you’re refunding through a different method, like cash or store credit.
   

Step 6: Add a Reason and Notes

It’s a good idea to keep track of why you’re issuing refunds:

1. Use the “Reason for refund” dropdown to select a general reason
   
   
2. In the “Notes” section, add any specific details about this refund
   
   
3. These notes are for your records only – the customer won’t see them

Calculate and Issue the Refund

You’re almost done! Here’s the final stretch:

1. Click “Calculate refund” to see the total amount
   
   
2. Double-check that everything looks correct
   
   
3. If you’re happy with it, click “Refund $X.XX” (the button will show the actual amount)
   

And that’s it! The refund is now processed.

After the Refund

Once you’ve issued the refund, there are a few more things to keep in mind:

1. The customer will usually see the refund in 5-10 business days, depending on their bank
   
   
2. Shopify will send an automatic email to the customer about the refund
   
   
3. The order status will update to show that it’s been refunded

Tips for Smooth Refunding

Communicate! Throughout the refund process, keep your customer in the loop. Send updates about the status of their refund, when they can expect to see the money back in their account, and any steps they need to take (like returning the item).

Have a refund policy. This will save you SO many headaches from dealing with unwanted returns and customers disputing purchases.

Offer store credit. When processing a refund, consider offering store credit as an option.
Analyze refund data. You can spot trends in your refund data. Are certain products being returned more often? Is there a common reason for refunds? This info is a goldmine.

Conclusion

Handling refunds might not be the most exciting part of running your Shopify store but they are super important.

Remember, every refund is an opportunity to show great customer service. Handle it well, and you might just turn a disappointed customer into a loyal fan of your store!

Oh, and before you go. If you’re looking for a good way to manage affiliates inside your Shopify store then you really need to check out Simple Affiliate.