By default, back to the card or wallet they paid with. You can also let the customer choose store credit instead, which keeps the money with your store for their next order. The customer is always told where their refund is going before they confirm.

Editing Tools → Tools → Cancel order → Where the refund goes.

Back to their original payment method (the default)

"The card or wallet they paid with is refunded. Shopify never does this on its own, so we ask for it, and the ledger records whether the money actually moved."

The customer sees: "Your refund will go back to your original payment method."

Let the customer choose

"At the moment they cancel, the customer picks a refund to their original payment method or store credit to spend with you again. No cash leaves your account unless they choose it."

The customer sees "Your refund can go back to your original payment method, or to store credit.", then a choice, Where should your refund go?, with Back to my original payment method and Store credit. Neither is pre-selected: they must pick one before Cancel my order goes through. After cancelling, they see either "Your refund is on its way back to the way you paid." or "Your refund is on its way as store credit."

There is no "store credit only" option on this tool. A customer cancelling an order can always get their money back.

For the store credit choice to appear, your Shopify store must have:

Tacey checks this with Shopify. If any condition is missing, or the check cannot be completed, the customer is not offered store credit and the refund goes to their original payment method.

Days until store credit expires sets how long the credit lasts, from 1 day to 3,650 days. Leave it empty and the credit never expires, which is the default.

Store credit bonus is on the page but not active yet. The page says: "Nothing adds a bonus to store credit yet. A cancellation refund uses the order's exact amount, with no addition." Whatever you enter, no bonus is added today.

The amount Shopify calculates for a full cancellation, including tax and shipping as Shopify handles them. Tacey does not work out or change the amount. A cancellation refund does not wait for Approve refund; it is part of the cancellation itself.

On the order's Reconciliation ledger in Tacey, the Order cancelled row shows the refund amount once Shopify has finished the cancellation. On the order in Shopify, the refund appears in the timeline like any other refund.