Who pays for the return shipping label by default.
Where to find it
Settings > Returns > Setup, under Label Fees.
[Screenshot: Setup tab — Label sponsor dropdown]
What this is
Option | What happens |
Customer | The customer covers the label cost. They see the charge on the review screen before submitting. |
Merchant | You cover it. Return shipping is free for the customer. |
Label sponsor is set in conjunction with an optional Maximum sponsored amount.
How a customer-paid fee is collected — charged by card at submission, or deducted from the refund — is controlled by Deduct fees from resolution.
What the customer sees
When labels are customer-paid, the label fee appears in the financial breakdown on the review screen before the customer submits their return.
[Screenshot: Return portal review screen showing a label fee line item]
Common exceptions
Merchant-paid labels for customers tagged VIP, or for orders above a value threshold
Merchant-paid labels when the return reason is a defect or wrong item
Customer-paid labels for international returns, where label costs are highest
Related settings
Maximum sponsored amount — caps what you'll cover toward a label
Deduct fees from resolution — how a customer-paid fee is collected
Return label provider — determines whether a label is generated at all