How to do an exchange without making financials inaccurate

CarmellaAndRose
Tourist
6 0 0

Hi all.  I am trying to do something very simply in Shopify and I have a feeling I am doing something wrong as it is overly complicated and screws up reporting. 

 

The scenario. 

 

Bob buys a red shirt for $50.  The shirt is shipped, received and Bob wants to send it back for a blue shirt.  This is a simple exchange that should result in revenue of $50 and Bob having a blue shirt.

 

The way I do this today is I 

1. Click the order

2. Click return items

3. Select a return reason, return shipping option and click return

CarmellaAndRose_0-1678564344880.png

4. I then generate a return label and email the customer

5. This puts the order as "return in progress"

6. Once I receive the order back I click edit on the top right corner and add the new product that they want (the blue shirt in this example)  I apply a discount of 100% because I already collected the money and update order.

CarmellaAndRose_1-1678564487913.png

7. Generate shipping label like normal and ship.

 

The problem is when you do this your financials shows you as making $0.  You made $50 in revenue for the first shirt and since you did a discount of 100% on the second it shows a -$50.  I took back the first shirt though so this isn't truly the case.  How do you do an exchange in Shopify where the end result is what you'd expect it to be?

 

Thanks in advance. 

Matt

 

 

 

Replies 12 (12)

Ignelis
Shopify Partner
125 15 23

Hi @CarmellaAndRose 

It sounds like you are currently using Shopify's return/exchange feature to handle your exchanges, which is why your financials are showing $0. However, there is a different way to handle exchanges in Shopify that will accurately reflect your revenue and inventory.

Here's how you can do it:

  1. Create a new order for the blue shirt that Bob wants to exchange for. You can do this by going to Orders > Create order.

  2. Add the blue shirt to the new order, and apply a discount of 100% to the red shirt that Bob is returning.

  3. In the notes section of the new order, make a note of the original order number and that this is an exchange.

  4. Save the new order.

  5. Fulfill the new order like you would with any other order.

  6. Once you receive the red shirt back, process the return like you normally would in Shopify.

By creating a new order for the blue shirt, you are accurately reflecting the revenue for the new sale, and by applying a discount to the returned item, you are adjusting your inventory levels accordingly.

 

I hope this helps! Let me know if you have any other questions.

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CarmellaAndRose
Tourist
6 0 0

Hi there! Thanks for the response.  I did a test order and have a few follow up questions.

 

1. To take back the red shirt you'd have to generate a return label.  This is going to mark this as a return in the returns report, but you get around this by making it $0.  However, now it shows up as a $50 discount on that same report which throws off the numbers by the same amount. I didn't give a discount, I just swapped the color.

 

2. If you were to mark down the original order (red shirt in this example) does it refund the customer's credit card?

 

3. When you create the new order, are you re-charging the person's credit card?

 

You definetly understand my goal.  It is a bit crazy that this is so complicated on a platform so large.  I really want to make this as easy as possible and if at all possible, prevent refunding and re-charging cards.  This will cause questions.

 

Thanks again.

Skye
Shopify Staff
1070 96 191

Hi, @CarmellaAndRose 

 

Thanks for posting to the Forums. I hope your day is going well!

 

Your financial report should still be accurate unless you refunded the order. If you simply created a return/exchange, the payment was made in the original order, accounting for the sale. In the exchange, you are not charging, but are still sending out a product, so it would reflect $0 for that shirt. 

 

I hope that makes sense! 

Skye | Social Care @ Shopify
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CarmellaAndRose
Tourist
6 0 0

Hi Skye! Thanks for your response.  Maybe I am missing something.  Yes, the original charge remains, but when you send out the exchanged product it shows it as a 100% discount which reduces your financials by the same amount that you charged.  Below are the steps I am following.  I am happy to adjust them.

 

The steps to exchange a product when no refund is being processed, are as follows:

 

  1. Open the order page, from the Orders tab of your Shopify Admin

 

  1. Select return items in the top-right corner and choose the items being returned, the return reason and whether you'd like to create a return label or no shipping is required. Note - this step can be completed when the customer first initiates the return and you can print your return label here. 

CarmellaAndRose_0-1678624499544.png

 

 

CarmellaAndRose_1-1678624499548.png

 

 

  1. Select the shipping method that includes a tracking number and click Create return label button

CarmellaAndRose_2-1678624499551.png

 

 

  1. Click Email Customer button.  If it is in chat, you can copy the download link and sent to them over chat.

CarmellaAndRose_3-1678624499554.png

 

 

  1. After selecting Create return you will see the return is now in progress. Next to the return in progress section, you can select the 3 dots and "Mark as returned". Note - if you had created the return when your customer first contacted you and printed the return label, this would be the step to take once you've physically received the product back. 

CarmellaAndRose_4-1678624499556.png

 

 

  1. After the original product has been returned, you can select Edit in the top-right corner, which will allow you to add the new product to the order.

 

  1. After adding your new product to the order, select Apply discount to make the product $0 (if no refunds or payments are applicable for this exchange). Uncheck the box to send your customer an invoice and select Update Order 

CarmellaAndRose_5-1678624499562.png

 

  1. You can review the order to check the correct product is showing returned and the new product is unfulfilled. Then, proceed with purchasing a shipping label as normal.

 

 

 

Skye
Shopify Staff
1070 96 191

Hi, @CarmellaAndRose 

 

Yes, those are the correct steps! However, following those steps should not display -$50 if the original order was not refunded. The only way it should show a negative balance would be if the original product was refunded, as well as a new product shipped out. It should say $0 balance.

Can you show screenshots of the order timeline? This should show all the steps that were completed to see what could have happened here.

Skye | Social Care @ Shopify
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CarmellaAndRose
Tourist
6 0 0

Looking at this in more detail, when I follow that method what I see is a discount of the total retail amount. It shows a discount because I apply a 100% discount to get the exchanged product to $0.  However, that is a bit misleading. I took back the original product so it should look like that sale never happened.  Rather, with the discount being the total retail of the product it skews any real promotions that are going on.  Could you image this at scale?  Your ability to evaluate any real promotions would be impossible because exchanges appear as promotions.

 

Below is the timeline. 

 

 

CarmellaAndRose_0-1678651798063.png

 

 

CarmellaAndRose_1-1678651798083.png

 

CarmellaAndRose_2-1678651798084.png

 

 

CarmellaAndRose_3-1678651798086.png

 

 

CarmellaAndRose_4-1678651798091.png

 

CarmellaAndRose_5-1678651798093.png

 

Skye
Shopify Staff
1070 96 191

Hi, @CarmellaAndRose 

 

Thanks for that additional context. That all looks to be correct. Can you show where it shows that the order is now negative for the cost of the product? As mentioned, it's expected behavior for the order to show a $0 balance. However, it should definitely not be in the negative. 

 

The reason it's intended to show an even balance is that there were two items worth X amount, but one charge. In your financial reports, it will still show a sale, but you can't sell one product twice if that makes sense. 

 

To make things clearer, I created a test exchange order in my test store. Here is how it displays after I have completed the process. You will notice it states the customer paid X amount for the complete order, and only shows $0 for the exchanged items, but maintains the paid price for the returned items. Thus, the financials are all still accurate: 

Skye_0-1678652718454.pngSkye_1-1678652766185.pngSkye_2-1678652794396.png

 

In your reports it will display as seen in the screenshot below. It essentially splits into two transactions, and one order. The first transaction date will show the sale, while the date the returned products are shipped out shows $0. 

Skye_0-1678653747567.png

 

Skye | Social Care @ Shopify
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CarmellaAndRose
Tourist
6 0 0

Hi Skye.  Sorry for the delay.  Sticking to the order in my screenshots, you are right.  In that case, it doesn't show a negative number.  However, in other situations it does.  

 

For example, I had a customer place an order and then before I could process the order they asked for a different color.  I simply edited the order and removed the one color and added the color they wanted.  Then, I created the shipping label and shipped.  This resulted in a negative sale amount.  In this scenario, I don't believe I could do the exchange process because the order was not fulfilled. 

 

Thanks, Matt

Skye
Shopify Staff
1070 96 191

Hi, @CarmellaAndRose 

 

Thanks for that additional info, Matt! Can you provide a screenshot of that order? That definitely should not have happened if there was no refund and the new color was the same price. 

Skye | Social Care @ Shopify
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CarmellaAndRose
Tourist
6 0 0

Hi Skye.  See attached.  In this example I had a customer, order 1173, order one color and before I fulfilled the order she asked for a different color.  I simply edited the order, removed the product of the color she didn't want and added the color of the product she wanted.  If it was not for order 1174 on that day the total sales report would show $0.  I didn't lose money or break even on order 1173, I still brought in $84 in revenue, but if it wasn't for order 1174 the total sales report would show $0.  

 

Thanks, Matt

Skye
Shopify Staff
1070 96 191

Hi, Matt

 

Thanks for that screenshot! For situations such as what you described, you will not want to use the return feature. Instead, you will edit the order. This means you don't have to add in the 100% discount that results in the order balancing to $0. It will not even display the edit in the reports, and only in the order itself. 

 

I can see how where the frustration comes from as some businesses might restock the return, so I will absolutely pass this on to your team to consider when upgrading the system. 

Skye | Social Care @ Shopify
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nztack
Excursionist
14 0 3

Absolutely ridiculous how convoluted the Exchanges process is in Shopify, how a massive platform such as Shopify is missing this very basic feature is beyond me.

 

The way I have got around it is to unfulfilled the original shipment, remove the original product and then edit the order to the new product and refulfill. This way makes an absolute mess of our accounts however it's the only way that actually works in Shopfiy.