This article explains how Swap refunds Shopify-calculated taxes and duties on returns, and charges them on exchange orders.
ℹ️ This article covers Returns V2, and the Shopify taxes & duties rules specifically. For orders shipped through Swap Global, see How to enable tax and duty refunds for global returns (Returns V2).
Taxes and duties calculated through Shopify can be both refunded and charged, so customers receive the correct adjustment when returning or exchanging:
For returns, the refunded amount includes the item price plus any applicable taxes or duties.
For exchanges, new items have their taxes and duties applied in the same way Shopify would handle them at checkout.
How to enable it
In the Swap dashboard, go to Returns → Settings → Taxes & Markets
In the Taxes & duties panel, select Refund/charge taxes & duties
In the Shopify taxes & duties table, click + to add a rule
Choose the Destination countries the rule applies to
Set Refund to either Taxes and duties or Only taxes
Switch on Charge for exchange items if you want taxes and duties applied to exchange orders for those destinations
Click Save
Refund/charge taxes & duties is a single choice covering both order types. Selecting it does not commit you to Shopify rules — the Global taxes & duties and Shopify taxes & duties tables are independent, so you can fill in one and leave the other empty.
Each rule records the Date modified and Modified by, so you can see who last changed it.
💡 If you use the Shopify duties and taxes application on specific regions, add those regions to the table for them to be refunded.
How it works
When enabled, Swap will:
Detect whether an order has Shopify-calculated taxes or duties, including both domestic and international.
Pull tax and duty information for exchange items directly from Shopify before the summary page.
Present the same information provided by Shopify, without changes.
Add the refunded taxes and duties to the customer’s total refund.
Show this information in the returns portal, the return summary, and emails.
How each exchange type is calculated
All exchange orders have shipping lines copied from the original order, even where that setting is normally disabled. This ensures duties are calculated correctly, since they depend on the delivery address.
Same price exchange
Customers receive a refund for duties and taxes, then are charged the same amount, resulting in a net total of $0 for duties and taxes.
For example, where the exchange item price equals the returned item price at $96, the duties and taxes added to the exchange order are $0.
Lower price exchange, a downsale
Not all taxes are refunded. When the draft order is created, Swap takes the full duties and taxes amount for the exchange item, which is charged in the portal. Swap then refunds the duties and taxes for the returned item, so the customer is ultimately charged only the difference.
The draft order shows $0 in duties and taxes, but the original order is adjusted, since only the relative amount is refunded.
Higher price exchange, an upsale
The discount in the exchange order covers only the returned item's price. Duties and taxes are applied to the difference between the exchange item and the returned item, so customers are charged only on the additional payment amount.
For example, with a returned item at $98.29 and an exchange item at $160.62, the difference is $62.33. Duties and taxes are applied as a percentage of $62.33. Where duties also apply, taxes are calculated on the duties as well:
13% × ($62.33 + $11.22) = $9.56
What customers see
Choosing items to return
When a customer selects items in the returns portal, they see a note that taxes or duties may be included in their final refund.
Return summary
On the summary page, refunded taxes and duties appear as a separate line below the item return value.
A tooltip clarifies that "Taxes and duties are set by local customs authorities and may vary. In some cases, they may not be fully refundable."
The RMA view in the dashboard
In the RMA, refunded taxes and duties are shown alongside the returned items.
For US orders, the breakdown lists each tax component separately, for example NY State Tax, NY City Tax and NY Special Tax.
Things to note
Taxes and duties may not always be fully refundable, depending on local customs rules.
If an item is not approved during quality control, its associated taxes and duties are not refunded.