Shopify does not refund automatically when an order gets smaller. It lowers the total and leaves the money where it is. When a customer reduces or removes an item with Change product options, Tacey closes that gap: it asks Shopify how much is owed and sends the refund in the same step.

Tacey never calculates a refund itself. After the change is saved, it asks Shopify for its own suggested refund for the order and sends exactly that figure, in the currency the customer paid in. Shopify never lets a refund exceed what can be refunded on the order.

Where the refund goes has two options:

To change it:

Before confirming, the customer is told which one applies: "The difference will be refunded to your original payment method." or "The difference will be issued as store credit."

Store credit lives on a customer account in Shopify, so it only works when:

If customers can check out without signing in, they need to sign in at their next checkout to spend the credit.

If store credit cannot be issued, Tacey does not fall back to a card refund. You chose store credit, so sending cash instead would move the money somewhere you turned off. The item is still removed, the customer sees "Your order was updated, but your store credit couldn't be added automatically. We've been notified and will follow up with you.", and the order appears under Needs your action so you can settle it by hand.

Also refund shipping on a partial reduction is off by default. The shipment still goes out, usually at the same cost, so a smaller order does not refund shipping unless you turn this on.

Import duties are not a setting. When a customer removes an item completely and it was charged duties, those duties are refunded in full along with it.

A partial reduction of an item that was charged duties is refused: "This item was charged import duties, so it can only be removed completely, not reduced." There is no reliable way to split a duty automatically, so Tacey refuses rather than guess.

If Shopify refuses a refund, the change to the order stays saved, but no money has moved. The customer sees "Your order was updated, but your refund couldn't be sent automatically. We've been notified and will follow up with you." The order appears under Needs your action on your Orders page and in the Ledger, with Shopify's reason, so you can refund by hand in Shopify.

A reduction refunds as soon as the customer confirms. It does not wait for your approval. (The Refund customers automatically switch in Global settings covers refunds from an applied discount and from a cheaper replacement, not reductions.)