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How to Handle Return Shipping Costs When Customers Wish to Exchange Products

Brody Hall
By Brody Hall
Joel Taylor
Edited by Joel Taylor

Updated April 27, 2023.

How to Handle Return Shipping Costs When Customers Wish to Exchange Products main image

The difference between exchanges and refunds is quite obvious when looking at costs. If a customer returns a product strictly for a refund, you'll most likely lose cash on both the return shipping costs and customer acquisition. You'll also have to refund the shopper all profits made on the initial order.

On the other hand, an exchange is often far less costly, which makes handling the return shipping costs a lot easier.

Decide Where the Money Will Come From

Offer Product Exchanges

Typically, most online businesses offer a return policy that covers consumer shipping costs only if the shopper opts for exchanging the product. The exchange can then be done in a way that ensures you don't lose out on the shipping fee.

For example, when a customer is simply displeased with their order and hasn't concluded on your brand, you can exchange a returned product for store credit. This keeps your cash with you.

By convincing the client to stick around, you can boost their lifetime value, as they'll most definitely come a second time if they're satisfied.

If the exchange still isn't profitable to you due to the shipping cost, you can up-sell complementary products of the customer's initial order when they come back to use their store credit.

» Pro Tip: Use a good upsell & cross-sell app for pop up notifications to help with customer retention

Let the Client Cover It

If you're simply unable to cover the cost, you can have the clients cover the return shipping costs, though this may make them displeased with your brand. If you do this, ensure that you offer a valuable exchange such as store credit, allowing them to include extra items in their cart, or giving a discount would ensure that they stay happy. A good way of doing this is to use a popular Shopify discount app such as Order to Discount by Egnition.


By making product return exchange valuable, and not penalizing shoppers who aren't pleased with an order, you'll effectively handle whatever costs are related to return shipping and even profit from the situations.