Shop Pay installments, enable merchants to buy now and pay later by paying for products in installments and not all up front. This gives both stores and customers the flexibility to pay and get paid in a more affordable fashion. It’s proven that stores that sell via Shop Pay installments have more sales, larger orders and fewer abandoned carts. Our Youtube video provides more detail on Shop Pay Installments if you’re looking to learn more!
Note: The current requirements for Shop Pay installments are:
Based in the US
Use Shopify Payments and Shop Pay
Have an online store in English
Sell in US dollars
While that all sounds amazing, refunds can still happen on orders processed through Shop Pay Installments. We’re going to first examine how payouts with Shop Pay Installments work then explain what happens with a refund for both the store owner and customer.
Payouts with Shop Pay installments:
Even though the customers split their payments, you will still receive the full amount for your order excluding the fees. In addition, you can receive your payment as early as the next business day. The payouts will go to the same account that you use for Shopify Payments. Because the Shop Pay installment payments are issued separately to your current payout schedule, you may see more than one payout on the same date or payouts which don’t align with your current payout schedule. This is completely normal. You can view your Shop Pay installment payouts the same as you’d view your Shopify Payment payouts in your admin.
Refunds with Shop Pay installments:
Refunds are usually cleared by future sales; however, if the negative balance is higher than $500 or older than 90 days then Affirm will work with the Shopify Recovery team to recuperate the funds.
Note: Please do not contact Affirm for questions about refunds as Shopify handles this process.
From a buyer's perspective, they’ll need to contact the store they purchased from to request a refund. Once the online store processes the refund, the payment provider will return the refunded amount to the original payment method (e.g. credit or debit card) within 3-10 business days and their installments balance will be updated.
A known limitation is that the email to the buyer for the refund will display the total order amount instead of what’s been paid so far. This can lead to confusion for the buyers who may think they’ve received a partial refund, because the amount in their bank may be less than what’s displayed in the email.
Our FAQ covers an example for when a buyer returns an item paid when using Shop Pay Installments which might provide more context:
We hope this helps clarify the refund process for Shop Pay Installments while also highlighting how the process is different from Shopify Payments. More information on Shop Pay Installments can be found here. We'd welcome you to comment below if you have any questions! You can also contact Shopify Support with questions about Shop Pay through our Help Center.