Shopify Payments refunds

On this page, you can find information on how to process refunds with Shopify Payments.

Processing refunds with Shopify Payments

When you issue a refund through Shopify Payments, the refunded amount is deducted from your next available payout. The refund status will be marked as Pending for up to 2 business days, during which the funds are processed back to your customer. Due to varying processing times at your customer's bank, it might take up to 10 business days for the refunded amount to be received. Refunds are processed in accordance with your payout schedule, and are typically scheduled for the next payout.

Transaction fees

When processing a refund, no additional transaction fee is incurred. However, the original credit card transaction fee isn't refunded to you when issuing a refund.

Tracking refunds with Acquirer Reference Numbers (ARNs)

To track the refund transaction, you can locate the Acquirer Reference Number (ARN) in the order timeline under the refund details. ARNs are assigned to refunds processed through Shopify Payments for transactions involving Visa or Mastercard. These unique reference numbers can be used by banks and credit card providers to trace transactions.

Resolving disputes

If a customer claims that they haven't received their refund, then you can provide them with the ARN and advise them to reach out to their credit card provider for further investigation.

Insufficient funds with Shopify Payments

If you're using Shopify Payments and you encounter a situation where your payout lacks sufficient funds for a return, then the outcome varies depending on your store's location:

Austria, Australia, Belgium, Canada, Czechia, Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, New Zealand, Portugal, Spain, Sweden, Switzerland, United Kingdom, United States: The balance required for the refund will be debited from your bank account. This debit will occur on a day outside your regular payout schedule.
All other countries: The remaining amount needed for the refund will be deducted from subsequent payouts until the refunded amount is fully covered.

Failed debit attempts with Shopify Payments

If the initial debit attempt fails, then a second attempt will be made after 3 business days. If this reattempt also fails, then you will need to change your Shopify Payments bank account or repay the negative balance manually.

Negative balances

If your Shopify Payments account displays a negative balance and the refund status remains Pending for more than 2 business days, then the resolution process varies based on your store's location:

Hong Kong SAR, Japan, Romania, Singapore: Negative balances will be cleared by future sales.
Europe (using a non-Euro bank account): Negative balances will be cleared by future sales.
All other countries and currencies: The negative balance will be debited from your bank account.

Managing negative balances

Negative balances occur when the cost of refunds, disputes, or fees exceed your store’s negative balance threshold. You can view your current balance in the Payouts section of your admin.

Each merchant has a dynamic negative balance limit on Shopify. When your negative balance reaches this limit, your business can continue issuing refunds, but the funds aren't returned to the customer until the negative balance is cleared. These are called pending refunds.

When you exceed your negative balance threshold, you receive a notification in your admin, an email to the account owner email address, and a banner in your Orders page. Orders that are refunded after the negative balance threshold has been reached will have the status Refund pending on your Orders page.

If you issue further refunds after reaching your negative balance threshold and receiving these notifications, then you will see details of the total amount you owe, which is calculated from the current amount of your negative balance, and the amount of pending refunds, in the banner on your Orders page.

If you issue a refund after exceeding your refund limit, the customer will be notified only when the refund is processed.

Clearing a negative balance

To fix a negative balance, Shopify might debit your bank account on file within two business days. You can also cover the negative balance with same-day sales, next-day sales, or by making a manual payment to Shopify. Refunds will be processed in the order they were created after the negative balance has been cleared.

Automatic debit

Automatic debits occur when Shopify initiates a debit to cover a negative balance. This feature is available in most countries and helps maintain a funded, operational account without manual intervention from your business. After the debit is received, any pending refunds are settled. No action is required for an automatic debit to clear your negative balance.

Making a payment

When you exceed your negative balance threshold, you will receive a notification in your admin, an email to the account owner email address, and a banner in your Orders page. If you wish to complete a manual payment to clear the negative balance, you can begin this process from the banner on your Orders page, or the email the account owner receives, using the Make a payment option.

From your Shopify admin https://admin.shopify.com/login, go to the Orders page.
In the notification banner, click Make a payment
On the Billing information page, you can see the total amount due, and enter your billing address information.
On the Payment page, enter the card details you wish to use to clear the balance.
Click Complete payment

Before making a payment, review your balance and future payouts in case your negative balance has already been addressed. Any excess payment will be credited back to you in your next payout.

Shopify Recovery team

Depending on the balance, and how long it's been pending, the Shopify Recovery team might reach out to you directly to address the negative balance, and to keep your Shopify Payments account in good standing.