Returned goods can be a nightmare for online businesses. The damage caused by this phenomenon can include reducing the rate of successful applications, affecting the store’s profits and conversion rates, or worse, the store’s reputation. Therefore, managing and guiding customers on how to refund shipping on Shopify plays an extremely important role, not only helping to minimize the damage to the store but also helping to maintain a good reputation.
Managing refunds plays an indispensable role in running a store, especially when it comes to shipping costs. Knowing how to refund shipping on Shopify will help you handle customer requests seamlessly while maintaining trust in your business.
Understanding the importance of refund management, this article from BSS Commerce will equip you with the knowledge needed to answer the question: How to refund shipping on Shopify?
Contents
Step-by-Step Guide: How to Refund Shipping on Shopify
Refunding Shipping on a Full Order
Source: https://magecomp.com/blog/refund-entire-order-shopify/
When you request a refund for the entire order, the refund request will include all items of that order, including shipping fees and other fees (If any). In addition, you can also charge your customer a restocking fee depending on the specifics of the order. Follow the below guide to claim for a full purchase refund:
- From your Shopify admin, go to the Order section.
- Select the order you want to make a refund.
- Select Refund.
- When the Order Details section appears, click Refund. Deselect Restock items if you wish to manually replenish your inventory. Only when you track inventory for the items in the order is this option available, and it is selected by default.
- Enter the amount you wish to have refunded for shipping in the Refund shipping box after choosing Shipping.
- Choose if you wish to get a refund if the order contains import taxes and levies. Import taxes and Duties on returned goods, as well as Additional fees: Customs clearance.
- Provide a justification for the refund in the Reason for refund field. Input the reason why the customer requests a refund.
- When issuing a refund, deselect Send a notification to the client if you do not wish to send them an email. By default, this option is selected.
- To return the customer’s order, click Refund.
So you have completed the steps to refund the entire order. Normally, this request will take about 10 business days to get your money back.
Refunding Shipping for Partial Refunds
You can give a partial refund if you only want a refund for some items in an order. After that, you can also give out more partial refunds until you’ve refunded the entire amount, which is the order’s initial purchase price. The status of your order changes to Partially refunded once you submit a partial refund.
Source: https://ecomclips.com/blog/easiest-way-of-making-partial-refund-on-shopify-step-by-step-guide/
When you issue a partial refund to a customer who paid with a gift card and another payment method, the money is first applied to the gift card until it reaches the full amount that can be refunded. The remaining reimbursement is applied to the other modes of payment.
Up to the amount allowed for each payment method, you can manually modify the refund amounts for each one. For instance, you might apply $40 USD to the gift card and $30 USD to the credit card to receive the return if a $70 USD partial refund is applied to the $40 USD gift card. Follow the below guide to claim for a partial purchase refund:
- From your Shopify admin, go to the Order section.
- Select the order you want to make a refund.
- When the Order Details section appears, click Refund. Enter the number of products you wish to get refunded. Products with a quantity of 0 are not eligible for a refund.
- Deselect Restock items if you wish to manually replenish your inventory. Only when you track inventory for the items in the order is this option available, and it is selected by default.
- Enter the amount you wish to have refunded for shipping in the Refund shipping box after choosing Shipping.
- Choose if you wish to get a refund if the order contains import taxes and levies. Import taxes and Duties on returned goods, as well as Additional fees: Customs clearance.
- Provide a justification for the refund in the Reason for refund field. Input the reason why the customer requests a refund.
- When issuing a refund, deselect Send a notification to the client if you do not wish to send them an email. By default, this option is selected.
- To return the customer’s order, click Refund.
Likewise, this can also take up to 10 business days. However, partially refunding an order needs to be carefully calculated if you do not want to mess up your store’s books and sales. A full order refund or shipping will be considered the more optimal option in this case.
Refunding Shipping on Orders with Third-Party Apps
Only the shipping cost that you paid can be refunded. All shipping costs, if any, will be displayed when you make a postage refund request in order to get your order refunded.
However, the maximum amount that can be refunded for delivery cannot be exceeded. For instance, you can receive a refund of up to $15 USD for delivery if you were charged $15 USD for it.
Finally, orders that have an order-level free shipping discount applied are not eligible for shipment refunds. To create a shipping refund order, follow these steps:
- From your Shopify admin, go to the Order section.
- Select the order you want to make a refund.
- When the Order Details section appears, click Refund.
- Choose Shipping from the Refund shipping option. Enter the shipping refund amount you wish to receive.
- Provide a justification for the refund in the Reason for refund field. Input the reason why the customer requests a refund.
- When issuing a refund, deselect Send a notification to the client if you do not wish to send them an email. By default, this option is selected.
- To return the customer’s order, click Refund.
In this way, you can have your shipping fee back within 10 business days.
Important Considerations on How to Refund Shipping on Shopify
You must be the store owner or a staff member with Orders > Refund authority in order to provide refunds for orders.
Only the original payment method may be used for a refund. After a refund is issued, a customer who no longer has access to the original payment method must get in touch with the bank or organization to retrieve the money.
Source: https://www.supdropshipping.com/what-is-shopify/
Once you start a refund through your Shopify admin, it cannot be cancelled or reversed. In the event that you accidentally start a refund, you can make a new draft order and use it to collect the money.
Regardless of whether the order was fulfilled or not, the following situations apply when you refund or cancel a customer’s transaction:
- You will not receive a refund for any credit card costs if Shopify Payments was used to process the order.
- You won’t receive a refund for transaction fees if the order was handled using a third-party payment gateway and Shopify Payments is accessible in the nation where your store is situated. Credit card fees are not the same as transaction fees. The payment gateway you use determines and charges any credit card fees.
- Any transaction fees are reimbursed in the amount of the customer’s order that was refunded if the order was handled using a third-party payment gateway and Shopify Payments isn’t accessible in the nation where your store is situated.
- 100% of the transaction charge is reimbursed to your account if you completely refund a purchase.
- 50% of the transaction charge is credited to your account if you return 50% of the purchase price of an order.
- Only when you use your Shopify admin to refund an order does a transaction fee credit apply. You do not receive a transaction fee credit if you use a third-party payment processor to refund a purchase.
Why You Might Need to Refund Shipping on Shopify
Compared to physical locations, internet retailers have four times greater return rates. Since online shoppers open the package to see the products they ordered for the first time, we shouldn’t be surprised by the eCommerce stats. Returns happen when the experience with the requested things after the purchase differs from the expectations that were formed before the purchase. The customer may ask for a partial refund or a return for the full order. The following are a few of the most typical causes of returns:
Exaggerated marketing
The reason why customers return goods from the supplier is the discrepancy between the product introduced and the actual product the buyer received. If you put yourself in the buyer’s shoes when the product quality does not meet your money and expectations, would you want to return the order? Of course.
Source: https://www.shopify.com/sell
The consequence of false marketing is the loss of brand image. A customer who has a bad shopping experience will certainly cause many other customers to feel unsafe when shopping at your brand.
Therefore, the solution to this problem is honest marketing, ensuring the quality of the product when delivered to the user. At the same time, the seller should provide a clear solution for customers who have a bad experience; only then will the brand image in the eyes of the buyer be improved.
Slow delivery time
The psychology when shopping online is the desire to receive the order as soon as possible. So, as soon as the order is confirmed, try to package and deliver the order to the shipping unit.
If there is an interruption in the packaging operation and the delivery to the shipping unit is slower than expected, notify the customer and hope the customer sympathizes with the delay.
Careless packaging
Not only do fragile products need careful packaging, but any product when sent to customers should be carefully packaged. Some brands also add decorations and signature scents to their packaging to impress customers and increase their impression in the minds of consumers.
Source: https://www.pluginhive.com/shopify-packing-slips/
Such a great tactic sometimes does not completely satisfy customers, so if the packaging is careless, will customers feel like receiving the goods? If you cannot decorate your package, at least make it neat and carefully packaged, with a card introducing yourself to take the opportunity to increase brand recognition.
Order without real demand
Although customers are the priority target, to optimize the business’s delivery process, sellers should re-manage their customer base, and carefully screen to minimize the above situation.
Screening, managing customer data, and segmenting customers not only limits the return of orders but is also a foundation for marketers to deploy their campaigns more effectively.
Providing wrong shipping details
This is a fairly objective reason because if the customer really has a need, they cannot intentionally provide incorrect delivery information. That is why businesses should not skip the order confirmation step.
After closing the order, the order confirmation step helps customers feel more secure about their order. More importantly, order confirmation also helps customers check their personal information, order information, and shipping address to ensure that the order is delivered to the right person.
Reasons from the delivery vendor
Sometimes the reasons that affect the customer experience come from a third party. Some typical errors can be mentioned, such as slow delivery, not delivered but reported completed, missing orders, bad working attitude, etc.
Source: https://www.softec.ai/post/the-true-cost-of-late-deliveries
Merchants and customers are both prone to errors. In haste, an online shopper could make a mistaken order by rushing straight from the order page to the payment page without first reviewing the transaction details. Inappropriate packaging or incorrect product packing by the seller may cause damage during shipping. Some refunds are unavoidable, but you can significantly lower the number of return requests and refunds by optimizing the eCommerce platform on which your store is based. How you handle refunds has a significant impact on how both current and potential clients view your company.
Best Practices on How to Refund Shipping On Shopify in 2024
Every time you get a request for a full or partial refund, make sure it qualifies under both the refund and return policies. Make sure you include the right shipping amount in the Shipping section while processing the request, as clicking Refund will end the procedure permanently. Although you can manually reimburse shipping, you should be aware that if the carrier is at fault, the consumer is more likely to receive a full or partial reimbursement for delivery expenses.
At fault is the carrier
Source: https://www.zoho.com/expense/articles/6-essential-supplier-kpis.html
If the purchase was delayed or the delivery was damaged because of a carrier fault, your customer may be eligible for a partial or complete refund for shipping. If the carrier refuses to issue a partial or full refund, you can contact Shopify support.
The fault belongs to the customer
If a customer’s fault causes an order to be delayed, carriers may not reimburse postage. For instance, your customer might not receive a refund if they supplied the incorrect shipping address at checkout, which resulted in delivery delays. Take note of the justification for a refund request. If the carrier declines to reimburse shipping charges, you may be required to pay the shipment amount from your account.
It may take up to ten business days for Shopify Payments refunds to be returned to the original payment method. The payout is attempted again in three business days if your account shows a negative balance.
You can manually repay money into your account if you wish to eliminate a negative balance so that refunds can be processed. If the delivery was delayed and there are no tracking events linked to the order you need to refund, keep in mind that you can get your money back for the return label. You must first invalidate the shipping label by following the instructions in the previous section to receive a refund.
Other methods for giving a customer a refund
Only after processing the return or cancelling the order may you provide a refund. Given this, should you give the buyer their money back now or wait for them to return the goods?
Before issuing a refund and returning the money to the original payment method, some retailers wait for the consumer to return the items and determine if they qualify as replenishment items.
Customers, however, might not be pleased with having to wait so long for a refund. To maintain customer satisfaction and business profitability, you can modify your return and refund policy and provide a variety of refund options.
Source: https://www.cashfree.com/grow/refund-payment-gateway/
Online retailers can promptly reimburse customers using gift cards and store credit as excellent substitutes for cash, debit, and credit card returns. Only the original payment method may be used for Shopify refunds, and clients may have to wait five to ten business days to receive their money back. However, a store credit or gift card can be used right away, enhancing the experience your clients have after making a purchase and assisting you in converting returns into exchanges.
Shopify’s built-in order-editing feature cannot be used to grant shop credit, and only Shopify Plus stores are able to issue gift cards. Therefore, you can select a return management solution from the Shopify App Store if you wish to provide gift cards and store credits as refund choices.
Return management software helps you increase revenue and customer retention by enabling numerous refund alternatives that let customers select their preferred return method and removing the waiting period when they select a store credit or gift card.
Shopify’s Latest Refund Features in 2024
Conclusion
Returns won’t be a problem for your company any more if you know how to handle your store’s refund and return policy. Returns are essential to the consumer experience and have become the new normal. They need not be a scourge, though.
The above article helps retail businesses understand more about returns and the factors to control and deal with returned orders in the shop. Compare it with your business’s operating process and customer base to find a way to minimize this rate and optimize your brand’s growth rate.
Here are some tips from BSS Commerce to help you handle returns while reducing store damage and ensuring customer satisfaction. Actually, how you handle returns from Shopify sites, both before and after a customer makes a purchase, can help you stand out from the competition, build your brand, and even increase your revenue. Wish your business success!
