When enabled, any applicable fees — return label, restocking fee — are deducted from the customer's refund or store credit instead of being charged separately.
Where to find it
Settings > Returns > Setup, under Label Fees.
[Screenshot: Setup tab — Deduct fees from resolution toggle]
What this is
This setting doesn't change how much a customer pays — it changes when and how they pay it.
Setting | How fees are collected |
Enabled | Subtracted from the refund or store credit. No upfront payment. |
Disabled | Charged by credit card when the customer submits the return. |
Example. A customer returns a $50 item with a $5 label fee.
Setting | Pays upfront | Receives |
Enabled | $0 | $45 |
Disabled | $5 by card | $50 |
What the customer sees
With deduction enabled, the customer sees the fee subtracted in the financial breakdown and never enters card details. With it disabled, they enter their card via Stripe and click Pay & Submit Return.
[Screenshot: Return portal review screen — fee deducted]
Caveats
With deduction disabled, you need a connected Stripe account to take the payment. See Setting up Stripe Connect.
With deduction disabled, the fee is collected at submission — before the return is approved or shipped.
Stripe is also required for Shop Now when a customer's new items cost more than their credit, regardless of this setting.
Related settings
Label sponsor and Maximum sponsored amount — determine the label fee
Handling / Restocking fee — the other fee this applies to