How refunds are worked out

A customer returns a £100 jacket and gets £82 back. They email asking why.

Every number in a return comes from the same short calculation, and once you’ve seen it you can answer that question in about ten seconds.

Start here

Take what they’re sending back. Subtract what they’re taking instead. That’s their credit.

Credit = what they return − what they take

Everything after that is deductions coming off, or a bonus going on.

Three possible outcomes:

Positive — they’ve got money coming, in whatever form they chose.
Zero — straight swap, nothing changes hands.
Negative — they owe you, and get invoiced for the difference.

What comes off

Four things can reduce what they get:

Return postage, if you charge it
A restocking fee, if you charge one
The cost of the label
A keep-item deduction, if they’re keeping it

These stack. Your £100 jacket with £8 postage and a 10% restocking fee gives back £82 — which is exactly the email you started with. Make sure your returns page says what you deduct, because the alternative is explaining it one customer at a time.

Each outcome in turn

Money back to the card. What they returned, minus the deductions above.

A swap. What they returned minus what they took. Leftover credit can go to Shop Now. Owing money means an invoice.

Store credit. Their credit, plus any bonus, minus deductions. The bonus only applies where your rules allow — it can be blocked if their credit is under your cut-off, or if a fixed bonus is bigger than the credit itself.

Shop Now. Their credit plus any bonus becomes their spending power. Whatever their basket costs above that, they’re invoiced for. Under it, they owe nothing. The bonus only lands if their basket is worth at least as much as the credit.

Keep Item. What they returned, minus your keep-item deduction. That deduction can be fixed or a percentage — and if it’s larger than what they’re returning, the option won’t appear at all.

Which price counts

When someone swaps, you decide whether the comparison uses what they actually paid or your current listed price.

This matters more than it sounds. If you discount heavily, comparing against the listed price lets someone buy at 60% off and swap for something at full price, with you covering the gap. Comparing against what they paid closes that.

You also choose how much freedom they get on price: same price only, trade up or down, treat it as covered either way, or hide anything priced differently.

What catches people out

Deductions stack. Two or three small fees on one return produce a number the customer wasn’t expecting.

A fixed bonus bigger than the credit silently disables itself. Offer a flat £20 bonus and it won’t appear on a £15 return — the exact small-value returns you most wanted to avoid refunding. A percentage doesn’t have this problem.

Shop Now bonuses need the basket to match the credit. Someone with £100 of credit who spends £30 doesn’t get the bonus on it.

Questions people ask

My customer got less than they expected. Where do I look?

Open the request — the breakdown shows every deduction. It’s nearly always postage plus a restocking fee, and nearly always because your returns page didn’t mention them.

Can I waive the fees for one customer?

Yes. Your team can adjust when reviewing, or you can write a workflow that removes fees for anyone carrying a tag like vip. The workflow is better if it’ll happen more than once.

Why didn't the store credit bonus apply?

Either their credit is under your cut-off, or you’ve set a fixed bonus larger than their credit. Check the fixed-versus-percentage setting first.

What happens if the swap costs more than they returned?

They’re invoiced for the difference and pay before it ships. That’s a good outcome — you’ve turned a return into a bigger order.

Should exchanges compare against the paid price or my listed price?

Paid price, if you run sales. Otherwise a customer who bought at a discount can swap up to full price and you pay the difference every time.