Set your rules in your store's Settings › Returns: whether you accept returns, for how many days, and what customers may ask for (a refund, store credit or an exchange).
Customers ask from their order page; you can also Start a return from an order. Each return shows in Orders › Returns:
- Approve the return (with instructions) or Decline the return (with a reason).
- When the parcel is back, mark it received; returned units go back into stock if you choose.
- Finish the return with a refund, store credit or an exchange (a new order at no charge).
The customer gets an email at each step.