I’m with you on this! It just doesn’t make any sense. They need to create an exchange button or remove this update altogether!
Topic summary
Shopify’s returns system update has been causing significant accounting and reporting issues for merchants who process exchanges or store credits instead of refunds. The core problem: when returns are created or approved, Shopify immediately deducts sales from totals, even when no actual refund occurs.
Key Issues Identified:
- Sales data becomes inaccurate for exchanges and store credit transactions
- Sales tax reporting is broken, making quarterly tax calculations unreliable
- Third-party returns apps (Loop, Redo) cannot properly sync with Shopify’s new system
- One merchant reported Shopify accidentally issued an actual refund due to a system glitch
- Merchants handling high return volumes (40%+ converting to exchanges) face severe data integrity problems
Shopify’s Response & Solution:
After months of merchant complaints, Shopify released an enhancement in late 2024. The new system only updates sales and tax records after merchants confirm item receipt and process the return—not when returns are initially created.
Implementation Timeline:
- Immediate effect for returns created directly in Shopify admin
- API-based returns (through apps) maintain old behavior until July 1st to allow partner adaptation
Important Note: The system still deducts returned item values from sales reports regardless of whether refunds, store credits, or exchanges are issued. Shopify recommends using the Payments Finance Report to track actual money movement.
Merchants and app developers expressed relief but await full implementation across all platforms.
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