How are return costs charged?

As a return label plus handling, charged once for each refund in which shipped items come back, on the day of the refund. Both amounts come from a rule on the Logistics page, and they land in Logistic Costs, line 21 of the P&L.

What counts as coming back is what Shopify records: a refund whose items are marked as returned, on a product that ships. One such refund is one parcel back, so its label and handling are charged once, however many items it covers. A refund that sends nothing back carries no return cost: a goodwill refund, where the customer keeps the item; items cancelled before they shipped; and a dispute, where no parcel moves. Digital products never carry it either, since nothing was shipped.

Set it up with Add rule on the Logistics page, choosing Return processing. Return label is what your carrier charges for the label back, and Handling per return is what your warehouse charges to receive, check and put the item away. The rule is effective-dated like every cost, so a new contract prices the returns from its start date, and the version in force on the refund day prices the return, whenever the order was placed.

The original order's own costs are never credited back: its shipping label, pick and pack and packaging stay where they were, because that parcel did go out. The refund itself, the money and the product cost credited back, lands on the same day as the return cost. On the P&L, expanding Logistic Costs shows it as its own Returns row, and Insights, Returns sets it beside the margin each return gives back. What a return costs in total, a write-down for goods that can no longer sell at full price included, is worked through in the return cost calculator.