If you sell on Etsy, you could run into a situation where you’ve refunded something, but then the situation changes, and the customer tells you to cancel the refund.
It’s not possible to cancel a refund on Etsy because Etsy sellers can’t process payments for their customers. When a refund is started, the processing of the refund starts, and it’s impossible for the seller to reverse that process.
There are a few situations where reversing a refund could be something that you want to do, so you’ll need to handle each situation differently.
Table of Contents
- What if I gave a refund to the wrong customer?
- What if a customer asked for a refund, then changes their mind?
- What if the refund was issued because the package didn’t arrive, but now it has?
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What if I gave a refund to the wrong customer?
If you issue a refund to the wrong customer, how you handle it could depend on whether the order has shipped or not.
If the order already shipped:
If you issued a refund to the wrong customer and the order has shipped already, there’s no way to get the money back other than contacting the buyer and letting them know what happened. They might be willing to re-buy the item so that you still receive the payment, but if they won’t do that, you’re basically going to be out of luck.
If the buyer says that they’ll purchase the listing again, they can do that, and you can use the same tracking number from the first listing in the “complete order” section of the new listing.
If the customer won’t buy the item again, mark it up to experience, write it off as a business loss, and move on.
The one thing that you can try is to do a postal redirect to tell the post office to send the package back to you, but that isn’t available for every shipment.
If it is an option, and the product is expensive and hasn’t been delivered yet, it might be worth doing.
If it’s not an option, though, there’s not a lot that you can do about it, and you can’t force someone to pay you if you refunded them!
If the order hasn’t shipped yet:
If the order hasn’t shipped yet, you can cancel the order after you realize that you refunded it and contact the customer to admit to your mistake!
Tell them that you canceled the order by mistake and that you need them to reorder it.
I would offer them an additional discount to make up for your mistake, maybe something like 20-25% depending on the cost of the item.
It’s a slight loss on your end, but if it was your mistake then it’s better to offer the customer something to make up for it.
And yes, it’s possible that the customer won’t reorder the item, but it’s better to cancel than it is to ship something that has a refund issued when you won’t be paid for the product!
What if a customer asked for a refund, then changes their mind?
If a customer asks for a refund and you issue it, then they change their mind about it and tell you to charge them for the original amount, you can’t do that. Let the customer know that they need to re-purchase the item that was refunded, and that you can send it when you get the payment.
This happens to me every now and then because people will buy more than one thing, ask me to refund one of them, then they’ll change their mind.
They usually say to recharge them for the additional item, because they don’t know that Etsy sellers don’t handle the payments on Etsy.
I just tell them that I don’t ever see their payment information, and that they can just repurchase the original item and I’ll send it once I get the order.
Most people are fine with that, but if they give me a hard time I reiterate that I don’t have their credit card info, and that it’s for their protection that Etsy sellers don’t see that!
What if the refund was issued because the package didn’t arrive, but now it has?
If you had a customer who said that their package hasn’t arrived, and either you issued a refund (through your funds,) or Etsy issued a refund (through purchase protection), you can choose to handle it in one of two ways.
What to do if you issued the refund out of your own money:
If you refunded the order and the customer receives it after the refund is issued, you can contact them and ask if they would purchase it again.
If the customer contacts you and wants to pay you for it it will be a lot easier, but if you have to contact them you’re going to be taking your chances.
Most people are honest, but there are a lot of people who will just ignore you and keep the product without paying you for it.
If that happens, I suggest moving on and writing it off as a loss. These things happen every now and then, so it’s part of doing business, unfortunately.
You should keep the payments on Etsy, don’t send them a PayPal invoice or take the payment off of Etsy in order to avoid the fees. That’s fee avoidance and it can get your shop shut down!
What to do if Etsy issued the refund through purchase protection:
If Etsy issued the refund through the purchase protection program, it would have been paid out of Etsy’s funds, and you wouldn’t have had to pay for it from your own funds.
If that’s what happened, the customer doesn’t have anyone to repay for the loss, since there was no financial loss on your part.
If they pay you for the item again you’ll be paid for it twice, so there’s no need for that (no matter how nice it would be for us.)
The customer can try to contact Etsy, but they’ll just tell them that they can keep the item.
If the customer contacts you and says that they want to pay you for it, explain that the purchase protection paid for it, and that they can keep it without any worries.
If you phrase it in terms of “the item was late, so keep it at no charge as a thanks for the inconvenience,” most people will like that and they’ll think you’re doing something nice for them.
Is issuing a refund by mistake a disaster? Not really.
Is it awkward? Yes! But it happens, and it will happen to you at some point if you’re running a business.
So don’t beat yourself up if you do it, but pay closer attention next time!
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