Complete Guide to Refunds and Chargebacks for Global E-commerce: Operations, Fees, and Risk Orders (38)

Refunds and Chargebacks Are Two Different Scenarios

1. Refund: When we as merchants proactively initiate a refund to the customer.
2. Chargeback: When customers, for certain reasons, file a chargeback request with their bank/acquiring platform.

This article will use Shopify and Shopify Payments as references to clearly explain both scenarios (other payment channels and PayPal work similarly—refer to PayPal's official documentation for specifics).

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Refunds

How to Refund? What Scenarios Require Refunds?

In Shopify, refunds are divided into three scenarios:

Refund: Merchants can initiate a refund regardless of whether the order is complete or how long ago it was completed.

Cancel: Can only be used before the order is fulfilled—directly cancels the order and provides a full refund.

Return & Exchange: Official return/exchange backend service (optional).

In short, for solopreneurs, the most commonly used and quickest method is refund.

After clicking refund, you'll enter a second page where you can customize the refund amount. If you want a full refund, simply enter 1 in the quantity field, and it will automatically refund the full amount.

What Scenarios and Refund Methods Are Needed?

1) Negotiated Partial Refund Without Return

The customer receives the product, isn't satisfied, and wants to return it. You plead: "I'll refund you 15%, but you don't have to return the product, okay? Please."

If the customer agrees, calculate 15% of the order amount, enter it here, and complete the refund.

2) Negotiated Partial Refund

The customer emails after placing an order: "I forgot to use my 10% coupon!"

As a conscientious seller, you say no problem, I'll refund you 10%. Calculate 10% of the order amount, enter it here, and complete the refund.

3) Cancel Order Full Refund

Damn, this looks like a fraudulent order—I don't want to take the risk, so cancel the order directly. Or the customer just placed an order and says they don't want it anymore—you can also cancel directly.

After canceling, the full amount is returned to the user, and you don't need to take any other actions (like shipping).

4) Cashback

I set up an activity: write a good review for cashback! One good review gets $3 cashback—refund $3.

5) Return for Full Refund

The customer receives the product and absolutely insists on a full return and refund. As a conscientious seller, you have to refund everything and provide a return address for them to send the product back.

In summary, through email communication, confirm the product and payment return information, then operate the refund here.

Of course, you can also use Return & Exchange for this scenario—it's essentially the same function, just more formal with more customizable settings.

Are Refunds Charged?

So if a customer bought a $10 product and you paid $3 in various fees (numbers are examples only, actual amounts may vary), your actual receipt is $7.

When you want a full refund, you need to return $10 to the user. You don't need to pay any additional refund fees, but that $3 fee is lost and won't be returned to you.

For buyer customers, are there any fees? Buyer customers won't have any fees unless you as the seller propose it in advance and deduct it from the refund.

About Free Return

Here's a supplement—many friends are questioning what exactly is "free return" and what doesn't count as free return?

If our store doesn't offer free returns, we can state in the policy that we'll charge customers various other fees, including but not limited to:

• restocking fee
• payment processing fee
• shipping fee

As long as you state it clearly in advance—if you return, I'll charge you these costs.

More: Shopify Official Refund Documentation

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Chargeback

Customers file chargeback requests with card institutions for subjective reasons! (Disputes can also be filed in PayPal).

Including but not limited to:

• Believing your product doesn't match the description
• You're a scam that doesn't ship
• Your product is just garbage
• Malicious chargeback

Can Merchants Appeal?

Don't worry—during this process, we will receive appeal channels. That is, credit card institutions will ask us to provide relevant valid evidence, including but not limited to:

• Shipping tracking info
• Your purchase invoice
• Your overall store operation status
• Your entity compliance documents

Etc.

Afterward, the credit card institution will evaluate both parties' evidence and issue a judgment.

Are Chargebacks Charged?

For PayPal disputes, you just need to negotiate amicably with the seller. Even if following the customer's request—if the customer wants to apply for a return and refund, we refund the customer through the dispute without paying additional dispute fees.

Dispute fees are only charged when both parties refuse to acknowledge each other and PayPal makes the final judgment.

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FAQ

1. I'm a newbie, can you demonstrate how to specifically process returns and refunds?

Go make a sale first—you're acting like you can actually get orders. If I don't stop you, your next question will be about precautions for acquiring Temu.

2. How long does it generally take for customers to receive refunds after issuing them?

Depends on the card institution, but usually pretty fast. Don't worry—when you issue a refund, an automatic refund email is sent to the customer, which reassures them.

3. Where is the money refunded from?

Directly deducted from your payout.

4. I got a chargeback on my first order after opening the store—I heard it seriously affects store survival?

Some group members have indeed experienced this, but the store wasn't significantly affected. But that doesn't mean it won't affect you.

Besides, it already happened—what's there to纠结 about? Are you going to close the store and run away?

Finally, why did you let them chargeback? Don't you have any idea?

• Didn't prepare inventory and ship in time?
• Dropshipped without checking products, leading to mismatched items?

Be more careful yourself.

5. So how exactly do I process returns?

Reference tutorial: How to Handle Returns for Global E-commerce Independent Sites? Newbie Complete Process Guide

6. I just won't ship, and won't accept returns or exchanges. Can customers do anything?

You can choose not to accept returns or exchanges—you just need to state it clearly in your policy. But you can't deceive people; customers can file chargebacks, and too many appeals will definitely get your store banned.

You don't learn the good practices, you just have to learn from those底线-less non-shippers?

7. How do I communicate with customers? Is there something like Ali Wangwang?

No, it's whatever contact methods you leave, such as email, WhatsApp, etc.

8. I'm a newbie—are there many refund-only cases? Many malicious chargebacks? Will I get scammed?

I've always felt this depends on whether your business is legitimate.

I see some group members who seem to have poked a thief's nest—risk orders are everywhere. These group members should think about what you're actually selling and what channels you're using for引流?

Your site, your products, your little歪心思 naturally attract scammers—it's truly like attracts like, scammers meeting scammers, magic fighting magic.

From the beginning to now, over a year with 2500+ orders, I haven't encountered a single credit card chargeback; I've had customers who weren't satisfied with the product and wanted returns, but that's because I offered return/exchange services myself. In the end, I ask them to return the goods to a location, and once returned, I give them the money. I've never seen anyone ask for a refund-only.

Also, back to question one—worry about this after you get a few orders. You're really acting like you can explode with orders.

9. What should I pay attention to with PayPal customer disputes?

My first UK PayPal account was permanently banned for 180 days after I lost a customer dispute (though we can't blindly attribute it to this).

So for my second UK PayPal account, I especially pay attention to customer disputes. Throughout the entire time, 2 customers have initiated disputes, and I responded positively to both, providing them with return/refund or partial refund solutions, which they all accepted—so everything is fine.

So:

1. Respond to customers promptly
2. Provide all your valid evidence
3. Ask the customer what they want—what's the big deal if we lose a little on this order?

10. What about returns!

Overseas family warehouses, force customers to ship to your China address, or just don't want the goods anymore.

11. Oh no, isn't it a big loss if I don't want the goods?

Then just don't ship—non-shipping is the least lossy, instantly earning 100%, leaving customers with nothing to return.

12. Isn't non-shipping easy to get the store banned?

Then don't play global e-commerce—just squat in Donkey Sister's group every day grabbing red envelopes, doing nothing and having no risks.

13. Are there any small tips to check if medium-risk, high-risk orders are really malicious orders?

You know what, my paid Max community really has them—item 47! I'm not trying to maliciously引流, you asked me.