Item Discount Distribution for Returns

Overview

Managing Return requests for discounted items can be tricky sometimes, especially if promotions like “Buy X Get Y” or “Amount off product” are applied. AfterShip Returns has introduced the Item discount distribution rule to simplify the refund calculations during return submission. This feature ensures fair refunds and prevents promotion misuse. 

How item discount distribution helps

Promotions are designed with conditions. When an item is returned, those conditions may no longer be met; therefore, the refund amount can be adjusted accordingly. 

Without automated discount logic, merchants need to manually review orders. This may mislead merchants into thinking that AfterShip has over-refunded, and it also makes managing promotions difficult. 

With AfterShip Returns automated discount logic:

• Optimal refund is recalculated automatically
• Promotion eligibility is considered
• Both merchants and shoppers get clarity on the refund value

Configure the item discount distribution rule

1. Log in to the AfterShip Return admin.
2. Navigate to Return policy > Discount rule.

Supported discount types

This feature is exclusive to item-level discounts and does not work for order-level discounts, which are already handled by the eCommerce platform. Two discount sources are: 

Shopify native discounts

Choose this option if your item discounts are created directly in Shopify: Amount off products and Buy X, get Y. AfterShip automatically detects these discounts from the order and matches them with Shopify’s discount settings. No additional configuration is required. 

Custom discount

Choose this option if your item discounts are created using a third-party app or any internal promotion system. In this case, you’ll need to add the exact discount name to the users on the order in AfterShip so the system can correctly identify and apply the correct discount logic during returns. 

Refund behavior options

For each discount source, merchants can choose one option for how refunds should be calculated when a discounted item is returned.

Option 1. Keep discount on originally discounted items

• Discount value is not redistributed across items
• Each item is refunded based on its original discounted price
• Promotion eligibility is not re-evaluated

This means the free item remains free. The refund behaviour is unchanged, ensuring the shopper’s return experience is the same as before enabling this feature. 

“Keep discount on originally discounted items” is best for merchants who prefer simpler refunds.

Option 2. Distribute discount across the discount family

• When a shopper placed a return for items bought in promotions, it breaks the promotion condition.
• AfterShip Returns re-evaluates the discount eligibility and distributes all item discounts for the same discount family
• Deducts the discount value from the first returned item in the discount family

This ensures refunds reflect whether the shopper is still eligible for the original promotion and prevents shoppers from unfairly keeping promotional benefits. It works best for merchants running Buy X Get Y or high-value promotions. 

Add a message to the customer

Merchants can add a customer-facing note when a discount amount is adjusted according to the configured discount rules. This message is displayed during return submission when the discount value is redistributed.

Logic explanation

• Item discount distribution is triggered only when an RMA results in a refund. If the return is processed as an exchange with no refund, discount distribution does not apply.
• Item-level discount value can be distributed only within the same discount family.
• After the first RMA, any remaining item discount value will be applied to the next RMA.
• If an RMA is rejected, any discount applied to that RMA is released back to the discount family for future RMA submission. 
• Discounts are applied during the review checkout stage and thus do not affect workflow conditions or routing rules. 

Examples

Here are examples to help you better understand the logic:

Example 1: Buy X Get Y – Refund

In this case, suppose the shopper purchased 2 Jackets and got 1 T-shirt for free. 

• Jacket: $100 each
• T-shirt: $50 (Discounted to $0)

First RMA: 1 Jacket Returned, $50 refund after deducting discount value. ($100 - $50 = $50)

Second RMA: T-shirt Returned, $50 refund, as the discount value is already used in RMA 1.

Example 2: Buy X Get Y – Refund + Exchange

Again, with the Buy 2 Get 1 Free promotion, the shopper buys 2 Jackets and gets 1 T-shirt for free.

• Jacket: $100 each
• T-shirt: $50 (Discounted to $0)

RMA: Returned 1 Jacket ($100), Exchange Item worth $20

The refund amount calculation includes the deduction of the exchange item value and the discount value: 

$100 - $20 (Exchange item price) - $50 (discount value) = $30.

Customer experience

• If merchants enable item discount distribution, and the item has an item discount, customers will see the item discount code during item selection under “What would you like to return?”

• When a selected return item is part of a promotion and triggers discount distribution, the corresponding discount adjustment with value is displayed on top of the Next button.

• The discount adjustment appears as a new field in the summary and impacts the total refund value.

Merchant experience

A new discount adjustment field will be added in the summary section of the return detail page to offset the total refundable amount.

Key takeaways

• The item discount distribution rule ensures accurate refunds by automatically recalculating discount eligibility when a return breaks promotion conditions.
• Supports item-level discounts only, including Shopify native discounts and custom item discounts. It does not apply to order-level discounts.
• Merchants can choose between keeping the original discount or redistributing discounts across a discount family based on their promotion strategy.
• Buy X Get Y and high-value promotions benefit most from discount redistribution, helping prevent shoppers from retaining unintended promotional value.
• Discount distribution applies only when a refund is issued and is handled automatically during the review checkout stage.

FAQs

1. Does the order discount apply in the discount rule?

No. Order-level discounts are not applied in discount rules. Order discounts are automatically distributed proportionally across line items by the eCommerce platform. However, if you add the order discount code to the Custom Discount section, AfterShip will treat it as an item discount.

Note: Make sure you enter the exact discount name in the Custom Discount field. Incorrect or mismatched discount names may prevent the discount from being recognized.

2. Why didn’t my custom discount work?

If your custom discount didn’t apply as expected, it might usually be due to a discount name mismatch. Note that the campaign name in the third-party discount app may differ from the actual discount name on the order.

Always use the actual discount name shown on the order, not the internal or campaign name from the third-party app.

Updated on: 11/02/2026