Returns and refunds aren’t the fun part of running an online store – but they are inevitable. And how you handle them can either build trust and loyalty… or turn a customer off for good.
If you’re a New Zealand-based Shopify store owner, this guide will walk you through how to set up a return and refund system that’s fair, efficient, and (mostly) stress-free – for you and your customers.
Why returns matter more than you think
Returns aren’t just a cost of doing business – they’re part of your customer experience.
Handled well, returns can:
- Encourage shoppers to buy in the first place (knowing they can send things back)
- Boost loyalty and repeat purchases
Handled badly? You’ll burn trust, get frustrated customers, and see fewer repeat buyers
What does the law say in New Zealand?
In Aotearoa, the Consumer Guarantees Act (CGA) applies. This means you’re not legally required to offer returns for change of mind, but you are required to:
- Replace, repair or refund items that are faulty or not as described
- Cover the cost of return shipping for faulty goods
Offering change-of-mind returns is totally up to you – but doing so (with clear boundaries) can help you compete with bigger players.
Can I choose not to offer returns or refunds?
It is an option, but not a very good one because a strict or non-existant returns policy turns buyers away – fast.
49% of consumers say they will abandon their cart if return policies are unclear or too strict. - Baymard Institute, 2022
92% of consumers are more likely to buy again from a store that offers an easy returns process. - Invesp, 2023
66% of NZ shoppers say flexible returns influence where they shop online. - NZ Post eCommerce Spotlight Report, 2021
The difference between returns and refunds
Quick definitions:
- Returns = the customer wants to send the item back
- Refunds = they want their money back
Sometimes you’ll offer both. But increasingly, smart retailers are offering store credit as an alternative to refunds. More on that shortly.
📌 What about exchanges? It might be tempting to allow exchanges but they can quickly turn into a logistical headache, especially for small teams. Unless you’ve got a slick system in place, exchanges can confuse inventory, delay resolutions, and frustrate customers.
Instead, consider this flow:
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Customer returns the item
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You issue store credit (or a refund if necessary)
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They place a fresh order when they’re ready, most likely even before they’ve returned the first item!
Shopify tools that help with returns
🧾 1. New Customer Accounts with Self-Serve Returns
One of the features of Shopify’s new customer accounts is the ability to offer self-service returns. Once activated, customers can log in, view their past orders, and request a return directly – no back-and-forth emails needed. And most importantly, you set the return rules.
It gives you and them control, builds trust, and saves you admin time. If you’re using the classic customer accounts, this option isn’t available – just one more reason to consider making the switch.
➡️ To turn this on:
Settings > Customer accounts > Enable new accounts
💸 2. Store Credit Over Refunds
Instead of refunding the amount, offer store credit via Shopify or an app – the customer can login to their account and see the credit as well as use it as many times are they like.
- Customers get a credit they can use anytime
- You keep the money in the business
Just be clear about this in your return policy to avoid confusion.
📌 Store credit restrictions: Shopify’s store credit can only be used in full. If you want customers to be able to use store credit across multiple purchases you should use an app listed below. You can also issue Gift Cards but that’s highly manual (and customers forget the gift cards details)
🛍 3. Self-Return Apps Worth Checking Out
- Loop Returns – Great for growing stores, fully integrates with Shopify
- ReturnGO – More affordable, with lots of automation options
- NZ Post, NZ Couriers & Go Sweet Spot – Offer discounted return labels you can pre-pay or pass on
What to include in your Return & Refund Policy
✅ Timeframes
State how long customers have to request a return. Common options are 14, 30, or even 60 days from the delivery date. Be clear and consistent—this helps manage customer expectations and protects your business.
✅ What Can and Can’t Be Returned
Outline exactly which items are eligible for return and which aren’t. For example, you might exclude sale items, custom-made products, or anything used for hygiene (like skincare, swimwear, or earrings). If there are exceptions, list them upfront.
✅ Conditions for Returns
Specify the condition items need to be in to qualify for a return. This typically includes being unused, unwashed, and in original packaging with all tags attached. Mention that returned items should be in resaleable condition.
✅ Who Pays for Return Shipping
Clarify whether the customer or your store covers return shipping costs. Some stores offer free returns, while others expect the customer to pay unless the item is faulty or incorrect. If you recommend using tracked shipping, say so here.
✅ Store Credit or Refunds
Explain how customers will be reimbursed—whether through a refund to their original payment method, store credit, or an exchange. Include a note about how long refunds take to process once the return is received and approved.
✅ How to Request a Return
Give step-by-step instructions for how customers can initiate a return. This could include emailing your support team, filling out a return form, or visiting a dedicated page. Make it as simple as possible.
📌 Tip: Put this policy on your website footer, in your FAQs, in your product as either an accordian or tab so that the info is right there and the customer has all the info they need to move foward with the purchase deicion. It makes sense to link to it in your order confirmation emails too.
Louisa’s Take: A NZ approach that works
Here’s what I recommend to most Kiwi Shopify clients:
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If you’re ignoring your own returns policy to keep customers happy… maybe it’s time to update it.
Let’s say your online policy says “14-day returns only”, but in reality, you’re happily offering refunds or store credit 30 or even 100 days later for unused items.
👏 That’s amazing customer service – but also a mismatch between policy and practice.
And that mismatch can:
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Confuse team members handling returns
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Undermine trust (especially if some customers get special treatment and others don’t)
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Lead to unnecessary emails or friction
🛠 If you’re consistently going above and beyond, consider making your official policy match your real-world values.
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- Don’t overcomplicate your return policy. One simple, solid policy, written in plain English, wins every time.
- Use the new Shopify customer accounts to automate where you can.
- Offer store credit if you want to reduce refund requests.
- Be generous, but clear. Customers value clarity even more than flexibility.
Use Shopify’s Refund Policy Generator to create your own now.
