> For the complete documentation index, see [llms.txt](https://docs.xorosoft.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.xorosoft.com/xoroerp-1/connected-apps/shopify/understanding-shopify-refunds-in-xoro.md). # Understanding Shopify Refunds in Xoro ### Overview When a Shopify order is successfully paid, a **Customer Deposit** is created in Xoro for the payment amount associated with the corresponding Sales Order. When a refund is processed in Shopify, Xoro determines how to process the refund based on the **current status of the Sales Order**. Depending on whether the order is still in the fulfilment process or has already been shipped, the refund is processed through either the **Customer Deposit** or a **Credit Memo**. * If the Sales Order is **Released / Unallocated** or **Released / Allocated**, the refund is processed against the existing **Customer Deposit**. * If the Sales Order has already been **Shipped**, the Customer Deposit is not refunded. Instead, Xoro creates a **Credit Memo** for the applicable refund amount. Xoro also updates the related **Sales Order** and **Wave**, when applicable, based on the order status and the quantity and amount being refunded. ### Workflow #### **When an SO in Released/Allocated Status is refunded** When a Sales Order is in **Released/ Allocated** status, the order has already been allocated for fulfilment and has a Wave associated with it. If the customer requests a refund before the order is marked as **Fulfilled/Shipped** in Shopify, the refund is processed against the **Customer Deposit** created for the Shopify order. **Step 1:** Create a Sales Order in Shopify by adding the required product.

**Step 2:** In Xoro, go to the **Shopify Channel** and open the **Orders** tab. Click **Actions → Import by Order**, enter the Shopify **Order Number**, and click **Import** to import the order into Xoro.

**Step 3:** After the order is imported, a corresponding Sales Order is created in Xoro in **Released/Allocated** status.

{% hint style="info" %} This status is determined by the **Auto release sales orders** and **Auto wave sales orders** settings enabled under the **Warehousing** section of the Shopify Channel's Orders tab. Since both settings are enabled, the Sales Order is automatically released and allocated. {% endhint %} **Step 4:** Go back to Shopify and open the same order. Click **Collect payment**, select **Mark as paid**, and select **Cash on Delivery** as the payment method. The order is then marked as **Paid** in Shopify.

**Step 5:** After the payment is collected, the Sales Order in Xoro is updated with a **Customer Deposit** equivalent to the payment amount collected for the Shopify order.

**Step 6:** Go back to Shopify and open the paid order. Click **Refund** to open the refund screen.

**Step 7:** On the **Create a refund** page, enter the item quantity, shipping amount to be refunded, and select the required **Refund reason**. Review the refund amount and other details, and click **Refund** to process the refund.

**Step 8:** After the refund is processed, the Shopify order is updated to **Refunded** when the entire order amount is refunded.

**Step 9:** Reimport the same Shopify order into Xoro from the **Orders** tab by selecting **Actions → Import by Order**, entering the Shopify Order Number, and clicking **Import**. **Step 10:** After the order is reimported, Xoro processes the refund against the **Customer Deposit** associated with the Sales Order, and the Customer Deposit is marked as refunded.

**Step 11:** Since the complete quantity and amount of the unshipped order have been refunded, the Sales Order is **Cancelled/Unallocated** in Xoro. The associated Wave is also **Voided**.

**Step 12:** Click on the **Customer Refund number** to see the details of the **Customer Refund** record generated.

#### **When an SO in Shipped Status is Refunded** When a Sales Order has already been **shipped**, the refund is not processed against the **Customer Deposit**. Instead, when the Shopify refund is imported into Xoro, a **Credit Memo** is created for the applicable refund amount and marked as **Refunded**. **Step 1:** In Shopify, open the required order and click **Mark as fulfilled**.

**Step 2:** Enter the **Tracking number** and select the **Shipping carrier**. Click **Mark as fulfilled** to complete the fulfilment.

**Step 3:** After the order is fulfilled, click **Collect payment** and select **Mark as paid**.

**Step 4:** In the **Mark as paid** window, select **Cash on Delivery (COD)** as the payment method and click **Mark as paid**.

**Step 5:** In Xoro, go to the **Shopify Channel** and open the **Orders** tab. Click **Actions → Import by Order**, enter the Shopify **Order Number**, and click **Import**.

**Step 6:** After the order is imported, the corresponding Sales Order in Xoro is **created with Shipped status**. The **Customer Deposit** associated with the Sales Order is also applied to the order.

**Step 7:** Go back to Shopify and open the respective **Sales Order**. Click **Refund**.

**Step 8:** On the **Refund** page, enter the quantity and shipping amount to be refunded. Review the **Refund amount** and click **Refund** to process the refund.

**Step 9:** After the refund is processed, the Shopify order is updated to **Refunded**.

**Step 10:** Reimport the same Shopify order into Xoro from the **Orders** tab by selecting **Actions → Import by Order**, entering the Shopify **Order Number**, and clicking **Import**. **Step 11:** After the order is reimported, Xoro identifies that the Sales Order is already **Shipped**. Instead of refunding the Customer Deposit, Xoro creates a **Credit Memo** for the refunded amount. **Step 12:** Open the Sales Order and select the **History** tab to verify the refund-related transactions. The history displays the **Credit Created** and **Credit Memo Refund** records with their respective amounts and **Refunded** status.

**Step 13:** Go to the **Credit Memo Centre** and locate the corresponding Credit Memo.

**Step 14:** Open the Invoice Credit Memo to view its details. The **Refunded** amount is displayed, and the **Remaining Amount** is **0.00**, confirming that the refund has been fully processed.

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