Refund

Refunds are seller-initiated from the order detail page. You can refund the full order or any partial amount. Etsy returns the 6.5% transaction fee on the refunded portion to your account, but the payment processing fee (the $0.25 + 3% Etsy paid to the card processor) is not refunded.

What gets refunded automatically

• The amount you specify, charged back to the buyer’s original payment method.
• The 6.5% transaction fee on that amount, returned to your shop payment account.

What doesn’t

• The payment processing fee. You’re out the $0.25 + 3% on the refunded amount, even on a full refund.
• Outbound shipping cost (if you’ve already shipped). The buyer might or might not return the item; that’s a return-shipping conversation.
• Etsy Ads spend. Any ad cost on the order is gone.

When to refund vs. when to push back

• Damage in transit, missing item, item not as described → refund quickly. These are buyer-protection cases Etsy will side with the buyer on if it escalates. Save the dispute hassle.
• Buyer’s remorse on a non-personalized item → policy decision. Many shops accept; some don’t. State your stance in the return policy.
• Personalized items that arrived as ordered → typically not refundable. State this in the description and policy.

Partial refunds as a tool

Offering a 20–30% partial refund instead of a full refund + return is often cheaper for both sides on lightly-imperfect orders. The buyer keeps the item, you keep most of the sale, and the dispute stops.