Returns vs Refunds in Lifetimely and Shopify

This guide breaks down the differences between how Lifetimely and Shopify handle returns and refunds. Lifetimely focuses on tracking refunds processed for orders, and you can decide whether they’re reported on the original order date or the refund processing date. Shopify, however, includes returns as a separate metric, which can sometimes cause slight differences between the two platforms. We'll walk you through how Lifetimely calculates refunds and give you tips on aligning your metrics to match your needs.

How Lifetimely Handles Refunds

Lifetimely is all about tracking refunds. Depending on your Calculation Logic settings, you can choose how those refunds are reported:

1. Refunds Metric in Lifetimely:
   • Lifetimely focuses on refunds that have been processed on orders.
   • If you turn on the setting "Assign refunds to the original order date instead of the processing date," refunds will show up on the original order date in your reports.
   • If you leave that setting off, refunds will show up on the date they were processed in Shopify.
2. Net Sales Adjustment:
   • Lifetimely doesn’t track "returns" as a separate metric like Shopify does. Instead, it adjusts the net sales value of the refunded order to $0. This way, the refund amount is accounted for in your overall sales.
3. What About Returns?
   • Shopify tracks returns separately (like when items are sent back but not refunded yet). Lifetimely doesn’t do this—it only looks at refunds processed and adjusts the net sales to $0 on the order.

So, while both Shopify and Lifetimely end up showing the net sales of refunded or returned items as $0, Shopify keeps a more detailed log of returns, while Lifetimely sticks to processed refunds.

Why the Numbers Might Be Different

1. How Shopify Tracks Returns and Refunds:
   • Shopify’s returns metric combines refunds and the value of returned items.
   • If an item is returned, Shopify first reports its sales when sold, then adds a return record once it’s sent back.
2. How Lifetimely Tracks Refunds:
   • Lifetimely doesn’t add separate return records. Instead, it adjusts the net sales value of the refunded order to $0.

This means Shopify might show more granular details for returns, while Lifetimely keeps things simple with refunds-only reporting.

Adjusting Your Lifetimely Settings

You can tweak how refunds are reported in Lifetimely under  Settings > Calculation Logic

Reset product costs to zero for all refunded orders

When enabled, this setting resets the product cost (COGS) for refunded orders to zero.

• Default behaviour (if not enabled): The product cost is reset to zero only if the refunded items are restocked.
• Use case: Useful for merchants who want to exclude the cost of refunded items from their profitability calculations, even if the items are not restocked.

Assign refunds to the original order date instead of the processing date

When enabled, refunds are reported on the original order date rather than the date the refund was processed.

• Default behaviour (if not enabled): Refunds are displayed based on the refund processing date (the date when the refund is completed in Shopify).
• Use case: Helps merchants align refund reporting with the original sales period, giving a clearer picture of the financial performance during that timeframe.

A Quick Example

Say you process a refund on January 10th for an order placed on January 5th:

• If you’ve enabled the original order date setting, the refund will show up as part of January 5th’s data.
• If you stick to the default, the refund will show up on January 10th instead.