Shopify refund to store credit: returns, exchanges and POS, step by step

A Shopify refund to store credit sends the value of a return to the customer's store credit balance instead of their card. You pick it on the refund screen when you process a return, and you can split the amount between credit and the original payment method. The money stays in your store until the customer spends it.

For issuing credit by hand, see our guide on how to give store credit on Shopify.

What a store credit refund is, and what "exchange credit" means

A store credit refund is a refund paid as a balance on the customer's account. It belongs to one customer, can have an expiry date, and works on your online store, Shopify POS and the Shop app.

Shopify has no feature called "exchange credit". The phrase covers three things, handled differently:

In an even exchange, Shopify says "the money paid for the returning items is applied to the new items".

Shopify refund to store credit: what you need first

You need three things in place:

• Customer accounts. Store credit isn't available on legacy customer accounts, and neither are self-serve returns.
• Staff permissions. Refunding a return needs either Refund to original payment or Refund to store credit, depending on the method you choose.
• A customer on the order. Credit lives on a customer profile. On POS, Shopify prompts you to create one if the order has none.

How to return for store credit on Shopify (online orders)

First create the return:

1. Go to Orders and open the order.
2. Click Return. If the order has unfulfilled items, click More actions, then Return.
3. In Select quantity to return, enter the quantity of each item and choose a Return reason.
4. Optional: in Summary, adjust the Restocking fee or Return shipping.
5. Under Return shipping options, create a label in Shopify, upload one, or choose No shipping required.
6. Click Create return.

When the parcel arrives, process it and refund it:

1. Open the order. In Return in progress, click Process return.
2. Select the items you received and choose where to restock them.
3. Optional: under Refund shipping, select Shipping and enter an amount.
4. Under Issue refund, choose Now and click Process and refund.
5. Choose the refund method: original payment, store credit, or both. If you choose both, edit each amount.
6. Optional: use the calendar icon to set an expiry date for the credit.
7. Leave Send notification once refund is finalized ticked so the customer hears from you, and click Refund.

To refund afterwards, choose Later and click Process return, then refund from the order's Refund button.

Exchanges, and when the prices don't match

To swap an item, go to Exchange items while you create the return, click Add products, choose the new items and click Done. Then:

• New item costs less. Process the return and refund the difference, to store credit if you like.
• New item costs more. Process the return and collect the balance with an invoice, or capture payment or mark the order as paid afterwards.
• Same price. Process the return. The old payment covers the new item.

Shopify doesn't allow custom items as exchange items, exchange items on orders with duties, or order level discounts on exchange items (product discounts work). Exchange stock isn't reserved until you process the return. Shopify Plus stores turn exchanges on through a feature test drive. And if you process a return in parts, Shopify advises against refunding early when you still need to collect payment.

Self-serve returns and return rules

With self-serve returns, customers request a return from their order status page. You turn it on in Settings > Customer accounts with the Self-serve returns and cancellations setting (setup guide). Customers pick items, a reason and a note, and you approve or decline.

Two limits matter for store credit:

• Customers don't choose the refund method. Shopify's self-serve guides don't mention a refund method choice for customers. You choose it when you process the return, so your policy has to say who gets credit and who gets a refund.
• Customers can't request exchanges. In Shopify's words, "exchanges can't be requested in self-serve returns". Ask customers to write the size they want in the note, then handle the exchange yourself.

Return rules live in Settings > Policies, under Return and cancellation rules. You set the return window (14, 30, 90 days, unlimited or custom), final sale products or collections, the return shipping fee and a restocking fee. Customers see an estimated refund based on those rules, but "return fees aren't automatically deducted from refunds". Check the amount before you click Refund.

Return rules have no refund method setting. If you want customers to pick credit or a bonus, use a returns app. We priced the main ones in our Shopify returns app fee comparison.

Shopify POS refund to store credit

In a physical shop, first turn on Allow orders to be refunded to store credit in the Point of Sale sales channel settings. Staff need the Refund orders permission (listed in POS roles as Return and exchange orders). Then, in the POS app:

1. Tap the Order icon and open the order.
2. Tap Return, set the quantities and tap Next.
3. Tap Select reason, choose one and tap Next.
4. Optional: tap Refund shipping or Refund tips.
5. In Options, tap Refund to store credit, then Refund.
6. Give a receipt if the customer wants one and tap Done.

For an exchange at the counter, tap Return or exchange and add the new items. If the customer owes you, tap Apply store credit and Collect. If you owe them, tap Refund to store credit and Refund. Exchanges that use store credit need a location on POS Pro.

POS credit triggers an "Order refund" email, not a "Store credit issued" one. Our guide to Shopify POS store credit covers applying and editing credit at the till.

Partial refunds, shipping and taxes

The tax rule on return fees comes from the return rules page. Shopify's return guides say little more about sales tax on refunds, so read the Summary before you confirm.

The trap is changing your mind. Once an order has a store credit refund, the original payment method is locked on the refund screen. Over-refunding to the card needs a special permission, works only for Shopify Payments orders, and "doesn't reverse the store credit refund that was already issued". Take the credit off the customer first, or you pay twice. A refund can't be cancelled once you start it.

What the customer sees

• An email. A refund notification, unless you switch it off on the refund screen.
• A balance in their account. Signed in, they see their store credit in their account details.
• A checkout option. At checkout they choose Apply store credit. The full balance is applied, up to the order total, and the rest stays on the account.
• Currency. Only credit in the checkout's currency shows up.

Tell customers to sign in or use Shop Pay, or the credit won't show.

Can store credit buy a gift card?

On Shopify POS, no. Shopify says "store credit can't be applied to a cart that contains a gift card product" (POS redeem guide). The online store credit page doesn't say either way, so test it on a real checkout before you promise it in a policy. A gift card can't buy another gift card either (gift card guide).

That is the core of merchandise credit vs gift card. Merchandise credit, which Shopify calls store credit, belongs to one customer, while a gift card is a code anyone can spend. Our guide to Shopify gift cards vs store credit compares them in full, including tax.

When store credit beats a cash refund

Store credit keeps the revenue in your store. It works best when:

• the return is outside your legal window and you are being generous;
• the reason is fit or taste, not a faulty item;
• you offer it as a choice, often with a small bonus, next to a normal refund.

Credit also has two costs. Outstanding credit is a liability (Shopify has an Outstanding store credit balance report). And for stores created on or after 12 May 2025, orders paid with store credit carry third-party transaction fees on the amount paid with credit, according to Shopify's store credit page.

Credit not tied to an order, like an apology, is added by hand from the customer page. If you send a lot of it, that is what we built Giftmint for. It sends native Shopify store credit by email, with an expiry date and the reason on record. It is in final development and not on the Shopify App Store yet, so the link goes to the launch list.

GiftmintGift cards with emails that carry your logo, delivery on the day the buyer picks and a balance check in your store.See how it works

How to word a store credit return policy

The law decides when you can use these tools. In the EU, a refund after a legal withdrawal must use "the same means of payment as the consumer used for the initial transaction" unless the consumer expressly agrees (Consumer Rights Directive, Article 13). In the US, state rules on refund policies and on credit expiry vary. We cover the expiry rules in store credit expiration laws by state.

Before you publish, check that your policy:

• says which returns get a refund and which get store credit, with the number of days;
• offers store credit as a choice where the customer is owed a refund;
• states the expiry, or that credit doesn't expire, and matches what staff set on the refund screen;
• says where credit works and that the customer must sign in or use Shop Pay;
• explains how exchanges work and who pays return shipping;
• keeps faulty items and legal rights out of your credit rules.

Short wording you can adapt:

Returns within [30] days get a refund to your original payment method, or
store credit if you prefer. Returns after [30] days and within [60] days get
store credit only. If you want a different size, write it in the note when you
request the return and we will send it as an exchange. Store credit is added to your
account, expires [12 months] after it is issued, and can be used online and
in our shop when you sign in. This does not affect your legal rights.

Keep the policy and the refund screen in step.

Frequently asked questions