Returns are an inevitable part of running an online store, and how you handle returns can make a big difference to your business. When done right, even a return can become an opportunity to build customer trust and loyalty. Done poorly, returns can hurt your profits and reputation.
In this article, we’ll cover everything you need to know about managing returns on Shopify – what returns management is, how Shopify’s return processes work, why it’s important, the basic process, and best practices. We’ll also explain how local returns options can simplify returns, and review how the right tools can help. Mipler’s Shopify Reports and analytics make the whole returns process easier and more insightful for you.
What Is Returns Management and Shopify Returns Processes
Returns management is the end-to-end process of handling a product that a customer sends back. It starts the moment they request a return and ends when the product is refunded, exchanged, restocked, or written off.
In Shopify, this process usually includes:
- Publishing a clear return policy customers can trust
- Creating and tracking return requests in the Shopify admin
- Providing prepaid labels or easy instructions
- Receiving and inspecting the returned product
- Restocking usable items to keep inventory accurate
- Issuing an exchange, refund, or store credit
Shopify helps merchants manage most of these steps without third-party tools: you can choose the item being returned, add exchange items, generate labels, and let Shopify calculate the correct refund amount automatically.
The real value of good returns management is not just moving products back and forth — it’s having a system that is consistent, trackable, and painless for both the merchant and the customer.
Why a Good Returns Management Strategy on Shopify Is Important for Customer Trust
A strong Shopify returns strategy impacts far more than logistics:
1. It directly increases customer loyalty
In modern e-commerce, shoppers decide whether to trust a store before purchase — often based on how easy it will be to return something if needed. A fast, no-drama return experience makes customers feel safe and gives them confidence to buy again.
2. It protects and even recovers revenue
A well-designed return workflow turns “lost sales” into saved revenue by:
- offering exchanges instead of refunds,
- promoting store credits,
- triggering follow-up purchases.
Instead of losing the customer forever, you keep the relationship alive.
3. It provides business intelligence most stores ignore
Every return tells a story:
- Did the product run small?
- Was the color different in real life?
- Was the description unclear?
- Did a supplier deliver a faulty batch?
Tools like Mipler Shopify Reports help merchants analyze return reasons and discover patterns that improve product data, sizing charts, quality control, and marketing — reducing returns in the future instead of just processing them.
Explore related reports
Returns Management Process on Shopify
Managing returns on Shopify involves several key steps. Let’s break down the process from start to finish.
How to do Returns on Shopify
- Initiate the return: In your Shopify admin, go to the order and click Return. Select the items and quantity being returned, then click Create Return. Choose a shipping service and designate which warehouse to ship back to.
- Provide return shipping info: Give the customer clear instructions for sending the product back. If your store’s primary location and the customer’s address are both in the US, you can use Shopify Shipping to email them a prepaid return label. Otherwise, you can upload a return label or simply instruct them how to ship the item back to you.
- Receive and restock: Once the item arrives, mark the return as received in Shopify to update the order status. Inspect the item’s condition. If it’s still sellable, restock it in your inventory so your stock levels stay accurate. If it’s damaged or unsellable, note that in Shopify and do not restock.
- Refund or exchange: Issue the refund to the customer’s original payment method, or fulfill the exchange item if you agreed to an exchange. Shopify automatically calculates the refund amount based on the returned items, any restocking fees, and any new items in the order
These steps cover the basic workflow in Shopify. The platform also sends automatic email notifications at key steps (e.g. when a return is created, approved, or refunded), keeping customers informed and reducing manual work. By following this process, you ensure every return is logged, tracked, and resolved properly.
How to Handle Returns on Shopify
Beyond the platform steps, how you handle returns on Shopify is more about customer service and efficiency. Aim to make the process as easy as possible: have a clear return policy, keep customers updated at each step, process refunds promptly, track return reasons to spot patterns.
These steps will help you remain loyal to your customers by providing great service and even if they return your items they might come back because of how you treat them.
Returns Management Best Practices
Here are some best practices to manage returns effectively on Shopify:
- Write a clear return policy: Make sure your return policy is easy to find and understand on your site. It should state what is acceptable for return, the time window when they make it and whether you offer refunds or exchanges. If you're unsure how to add return policy on Shopify, go to your Shopify admin Settings > Policies to create one.
- Make returns easy: Provide prepaid return labels if possible, or give simple email instructions with how to return items to your warehouse. You might even use a specific app or portal so customers can initiate a return online without needing to email support or make return by phone calls.
- Keep customers informed: Notify customers at each stage of the return and let them know when you approve the return, when the item is received, and when the refund is issued. Keeping them in the flow shows good service and builds trust even after they return your products.
- Learn and adapt: Treat returns as feedback and track why customers return items and look for specific patterns. If many people say an item “runs small,” adjust its description or sizing info. Use an analytics tool like Mipler to report on average returning customer rate in Shopify and reasons so you can spot trends. The best Shopify returns app or system helps you not just process returns, but learn from them, allowing you to make decisions that reduce future returns.
How to Choose the Best Shopify Returns Management Software
When evaluating returns management software (sometimes called a Shopify returns manager app), consider your needs: a self-service return portal for customers, automated return labels, exchange handling, etc. Also think about analytics (does it help you track and understand returns?), integration with Shopify (will it update orders and inventory automatically?), and cost.
The best Shopify returns app for your store is one that makes returns easy for customers and provides you useful insights. Often, you might use one app for handling the return process and another like Mipler for analyzing the return data.
