Since it creates a new order, Shopify automatically calculates taxes again — even for the same product exchange. To avoid charging the customer again, we apply a discount equal to the tax amount on the exchange order.

1. A return of the original item.
2. A new order for the replacement item.

Summary:

1. Exchanges = new orders in Shopify → taxes are calculated again.
2. We use a discount to offset the tax, so the customer doesn't pay.
3. Merchants do not need to process any refunds.

Updated on: 16/04/2026