Prepaid Return Labels: How They Work, What They Cost and Who Pays
Written byAyushi Tyagi
Reviewed byAnuj GoelQuick answer: Prepaid return labels are shipping labels your store pays for and gives to the customer. The customer sends the item back without buying postage. With many return services, you pay only when the carrier scans the parcel. For example, USPS return services are scan-based, and Shopify charges for its return labels after the scan. You then decide who carries the cost: free returns, a flat fee from the refund, or the shopper’s own label. QuickReturns creates prepaid return labels automatically through your shipping account when you approve a request. It does this on every plan, including the Forever Free plan.
Returns are a big share of online orders. NRF and Happy Returns estimate that 19.3% of online sales would come back in 2025. So how those parcels travel matters. This guide covers billing, carrier options, how the label reaches the shopper and who should pay. For the full returns process, read our complete guide to Shopify returns management.
On this page
- What is a prepaid return label?
- How prepaid return labels are billed
- Prepaid return labels by carrier: US, UK, Canada and Australia
- Label in the box, label on request or QR code
- Who should pay for prepaid return labels?
- Common prepaid return label mistakes
- How to offer prepaid return labels on Shopify
- Automate prepaid return labels with QuickReturns
- Frequently asked questions
What is a prepaid return label?
A prepaid return label is a shipping label that the store pays for. It carries your store’s return address, so the parcel comes back to you. The shopper packs the item, sticks on the label and hands the parcel to the carrier. They never buy postage. In short, the label helps you get back stock that a customer no longer wants.
A prepaid label is one of four ways to handle return shipping. Shopify’s return settings offer the first three, and the fourth skips shipping altogether.
| Option | Who pays the carrier | What the shopper does |
|---|---|---|
| Free prepaid label | Your store | Attaches your label and drops the parcel off or books a pickup |
| Prepaid label with a fee | Your store, which then takes a fee from the refund or the exchange | The same, after seeing the fee |
| Shopper buys their own label | The shopper | Buys postage and ships the parcel to your return address |
| No return shipping (returnless refund) | Nobody | Keeps the item; you refund or replace it |
What’s on a prepaid return label
Most prepaid return labels carry the same parts:
- the shopper’s address as the sender
- your return address as the recipient
- the carrier and the service, for example a ground or priority service
- a tracking barcode
- a postage mark showing the label is already paid
Each label and its tracking number belong to one parcel. So shoppers shouldn’t reuse or copy a label for a second return.
How prepaid return labels are billed
Carriers bill prepaid return labels in one of two ways. Either you pay when the carrier scans the parcel, or you pay when you create the label. This matters most if you put a label in every outgoing box. After all, many of those labels never get used.
USPS offers three return services: Priority Mail Express Return, Priority Mail Return and USPS Ground Advantage Return. On its USPS return services page, all three are scan-based and priced per piece and per label scanned. USPS can also print physical return labels and deliver them to you. That service costs $1.65 per label.
Shopify’s own return labels follow the same pay-on-scan rule. According to Shopify’s guide to buying return labels, creating a label costs nothing. Shopify charges you only after the carrier scans the package. Likewise, a label that expires unused costs nothing. The shipping cost goes to your Shopify account, and you get an invoice when you reach your billing threshold.
For other carriers and shipping apps, read your account terms before you print a label into every box. A label paid at creation costs money even if nothing comes back.
Prepaid return labels by carrier: US, UK, Canada and Australia
Every major carrier offers prepaid return labels. However, drop-off, printing and billing options differ. Below is what each carrier’s own pages say, grouped by market. QuickReturns connects directly with every carrier in this section. It creates the label when you approve a return, and it can charge the shopper the carrier’s live rate with Courier Rate. For the carriers built into Shopify, see how to create return labels in the Shopify admin.
United States
USPS prepaid return labels
A USPS return label can go in the original shipment box. Alternatively, customers can print their own. For shoppers without a printer, USPS Label Broker gives them a QR code. The Post Office then scans it and prints the label at the counter. Shopify can create a USPS prepaid return label for Priority Mail and Ground Advantage on domestic US returns. QuickReturns also connects with USPS: an approved return gets a label from your USPS account, emailed with a tracking link.
UPS prepaid return labels
On its UPS returns page for businesses, UPS says you can create a UPS prepaid return label with the outbound label. UPS can also email the customer a return label with a mobile barcode. Or a driver brings the label when they pick up the parcel. Through Happy Returns, customers can take a box-free return to The UPS Store, too. In Shopify, a UPS return label can use any UPS domestic service except UPS Ground Saver. You pay Shopify’s rates or your own UPS account rates. With UPS connected in QuickReturns, the label comes from your UPS account as soon as you approve the request. The shopper then gets it by email, tracking link included.
FedEx prepaid return labels
According to the FedEx returns page, the store either packs a return label with the order or sends one on request. Customers with a QR code don’t need to print anything. Instead, a team member prints the FedEx return label at a FedEx or participating retail location. Shopify also sells FedEx return labels if your return location and the customer’s address both include a phone number. QuickReturns works with FedEx directly. Approve a request, and the shopper gets a FedEx label from your account by email, with tracking.
Shippo return labels
Shippo is a multi-carrier shipping API and web application for ecommerce businesses. Its returns documentation says every Shippo return label is scan-based and free to print. So you pay only if the label gets used. Shippo return labels work for USPS, FedEx and UPS shipments. The return must also use the same carrier as the outbound parcel. If you already ship through Shippo, connect that account to QuickReturns. Approved returns then get their label from it, sent to the shopper with a tracking link.
United Kingdom
Royal Mail return labels
Royal Mail sells its business return labels as Royal Mail Tracked Returns. It needs a Business Parcels Account and a minimum of 20 returns a week or 1,000 a year. Shoppers without a printer can print their Royal Mail return label free at a Post Office branch or a Royal Mail Customer Service Point, or have the return collected from home with Parcel Collect at no extra cost. Check your account terms for what you pay per label. QuickReturns has a direct Royal Mail integration: when you approve a return, it creates the label through your Royal Mail account and emails it with tracking.
Evri return labels
An Evri return label can be a pre-printed label that came with the parcel. Or the retailer can book the return with Evri for the customer, according to Evri’s parcel returns page. Shoppers can drop the return at any of Evri’s 10,000+ ParcelShop or Locker locations. They can also print the label in most shops on a Print in ParcelShop device. Alternatively, a courier collects the parcel from an address of their choice. Evri notes that return costs vary by retailer, and some offer free returns. Connect Evri to QuickReturns, and each approved return gets an Evri label from your account, emailed with its tracking link.
DHL return labels
In the UK, DHL eCommerce UK offers business account holders a returns service where the customer generates the return on DHL’s online portal, which can carry your branding, and drops the parcel at a DHL ServicePoint. DHL describes that returns process as paperless, so the shopper does not need to print a DHL return label. Your DHL account terms set what you pay per return. For DHL, QuickReturns creates the return label through your connected DHL account on approval, and the shopper gets it by email with a tracking link.
Canada
Canada Post return labels
On its Canada Post ecommerce returns page, Canada Post says you pay only when your return label is used. Customers can get an emailed Canada Post return label and print it at home. They then drop the parcel at a post office or street letter box. Without a printer, they get a QR code by email, and a post office prints the label. Box-free drop-off is also an option. Shopify creates Canada Post return labels for returns within Canada, using Regular Parcel, Expedited Parcel, Xpresspost or Priority. It can’t use your own connected Canada Post account, though. QuickReturns connects with Canada Post as well. Approved Canadian returns get a label from your own Canada Post account, emailed with tracking.
Australia
Australia Post return labels
On its parcel returns for business page, Australia Post says a free MyPost Business account lets you create return labels. Through Print at Post, a shopper shows a QR code at a select Post Office. The shopper then gets the Australia Post return label printed for free. Returns can go back from 20,000+ locations, including Post Offices, street posting boxes and Parcel Lockers. An Australia Post account works the same way in QuickReturns. Approve the request, and the label and tracking link go to the shopper by email.
Label in the box, label on request or QR code
The way a prepaid label reaches the shopper decides what you know before it exists. It also decides whether a shopper without a printer can use it.
| Method | What the shopper does | What you know before the label exists | Carriers above that offer it |
|---|---|---|---|
| Label in the box | Uses the label that came with the order | Nothing yet: the label exists before any return is requested | USPS, UPS, FedEx |
| Label sent after the request | Prints the emailed label at home | The items, the return reason and whether your rules allow it | USPS, UPS, FedEx, Canada Post |
| QR code, printed at the counter | Shows a code at a post office or carrier location | The same as a label on request | USPS, FedEx, Canada Post, Australia Post (select Post Offices) |
| Pickup with the label | Hands the parcel over at their door | The same as a label on request | UPS, Evri |
| Box-free drop-off | Brings the item to a counter without packing it | The same as a label on request | UPS (The UPS Store, through Happy Returns), Canada Post |
A label in the box is the easiest option for the shopper. However, it exists before the shopper says why they are returning. So you get no chance to check eligibility or offer an exchange first. It also only makes sense when your carrier bills on scan.
A label on request comes after the return reason and your rules. As a result, you can approve, decline or suggest an exchange before you pay for shipping.
Finally, shoppers without a printer need a QR code or a pickup. USPS, FedEx, Canada Post and Australia Post print labels at the counter. UPS and Evri can also collect from the door.
Who should pay for prepaid return labels?
No option suits every store, and many stores mix them by return reason. Here is when each one fits.
| Option | Choose it when |
|---|---|
| Free prepaid label | You compete on free returns, margins are healthy, or the item arrived damaged or wrong |
| Prepaid label with a flat fee | Most returns are a change of mind and you want to offer the label without paying for every one |
| Shopper buys their own label | Margins are thin, or items are bulky and costly to ship |
| By return reason | You want free labels for damaged or wrong items and a fee for change-of-mind returns |
A flat fee is a guess, though. A heavy parcel can cost more than the fee, and a light one less. To charge what the carrier actually charges, use the live courier rate instead.
Whichever you choose, put it in the return shipping clause in your return policy. That way the fee never surprises a shopper at refund time.
Prepaid return labels on exchanges
Exchanges change the maths. When a shopper swaps a size, you keep the sale. So many stores waive the label fee on exchanges and keep it on refunds. That makes the exchange the cheaper choice for the shopper.
On an exchange, you can add the label cost to the exchange order, collect it upfront or waive it. In QuickReturns, the label fee goes on the exchange order by default, and a fee rule can cover returns, exchanges or both.
Charging the label fee on Shopify
Shopify bills its own return labels to your Shopify account. You can’t charge the customer for the label automatically. To pass on the cost, you deduct it by hand when you process the refund. Likewise, Shopify’s return and cancellation rules let you set a flat fee per return. Even so, Shopify doesn’t deduct those fees from refunds automatically.
Tax is the newer point. Since October 23, 2026, Shopify calculates tax on return shipping fees for some US orders. It applies when the order ships to a US address and the store uses Shopify Tax or Tax Platform. Tax applies only where the fee is taxable in that jurisdiction.
Common prepaid return label mistakes
- A label in every box that you pay for at creation. If your carrier bills when you make the label, every unused label is money spent. Use scan-based labels in the box, or send labels on request.
- One label for a partial return at the full order weight. Shopify creates return labels per order, not per item. So when only some items come back, adjust the expected weight.
- A label that expires before your return window closes. Through Shopify, USPS labels last 1 year, UPS labels 6 months and FedEx labels 90 days. A UPS label’s link expires after 30 days, so save it.
- Expecting to void a label you sent by mistake. Shopify’s return labels can’t be voided. Instead they expire, and an unused one costs nothing.
- A policy that promises free returns while a fee comes off the refund. Shoppers notice the gap. Keep the policy, the returns page and the refund in line.
- No option for shoppers without a printer. Offer a QR code or a pickup where your carrier supports it.
How to offer prepaid return labels on Shopify
A Shopify store has three routes:
- Shopify’s built-in labels. Shopify creates return labels only for domestic returns within the United States or within Canada, not between the two. The admin steps are in the guide linked in the carrier section above.
- A label from a carrier or a shipping app. For other returns, Shopify Help points you to a shipping carrier, a third-party service or an app. You buy the label there and add it to the return.
- A returns app. The app creates the label when you approve the return and sends it to the shopper.
Built-in labels mean opening each order, entering a weight and picking a service. On top of that, you review every request yourself. With returns every day, a returns app with automatic approval rules sends the label without those clicks.
Automate prepaid return labels with QuickReturns
QuickReturns is the simpler way to offer prepaid return labels on Shopify. You connect your shipping account once and set the label cost once. Then the label goes to the shopper when you approve the request. 1,000+ brands use QuickReturns.
Each label comes from your own connected shipping partner account, and that account pays for it. When you approve a request, the shopper gets the label and a tracking link by email. Carrier integrations include USPS, UPS, FedEx, Shippo, Royal Mail, Evri, DHL, Canada Post and Australia Post.
The label is created when you approve a request. On paid plans, an automation rule can approve new requests, so the prepaid return label goes out without a click.
Automatic prepaid return labels come with every plan, including the Forever Free plan (see QuickReturns plans). Our step-by-step setup guide walks through the label settings.
Charge shoppers the real cost of prepaid return labels with Courier Rate
You decide who pays. By default, the label is free for the shopper and your store absorbs the cost. Otherwise, a return fee rule charges the shopper in one of four ways. The options are a fixed amount, a percentage, a combo, or Courier Rate.
Courier Rate charges the shopper the live label rate from your connected carrier. If no rate comes back, a fallback amount that you set applies instead. Each rule can cover returns, exchanges or both. You can also limit it by return reason, product tag, SKU or customer location.
Next, choose how you collect the fee. On returns, it comes off the refund by default. For exchanges, it goes on the exchange order. Alternatively, the shopper pays upfront when they submit the request, which needs a connected payment provider. Either way, the returns page shows the fee before the shopper submits.
Shopify’s built-in labels fit a store that sends a few labels a month by hand.
Start with 10 free return requests a month, with prepaid labels created for you.
Frequently asked questions
Basics, carriers and printing
A prepaid return label is a shipping label the store pays for and gives to the customer. It is addressed to the store’s return location. The customer attaches it and drops the parcel off or books a pickup, without buying postage. Stores pack it in the order or send it on request.
The store pays the carrier for a prepaid return label. It can absorb the cost and offer free returns. Or it can pass part of the cost on with a fee taken from the refund. Some stores ask shoppers to buy their own label, or charge only for change-of-mind returns.
Yes, with several carriers. With USPS Label Broker, FedEx, Canada Post and Australia Post’s Print at Post, shoppers show a QR code. Staff at the counter then print the label. Print at Post works at select Post Offices. UPS can also send a driver with the label, and Evri couriers collect returns.
In the US, USPS, UPS and FedEx all offer prepaid return labels. Shippo creates scan-based return labels for those three. In the UK, this guide covers Royal Mail, Evri and DHL. Canada Post serves stores in Canada. Australia Post offers return labels through a free MyPost Business account.
Costs, charges and expiry
There is no single price. The cost depends on the carrier, the service, the parcel’s weight and size, and your account rates. USPS prices its return services per piece and per label scanned. Shopify charges for its return labels only after the carrier scans the parcel.
Not with scan-based labels. USPS return services, Shippo return labels and Canada Post returns cost nothing until the label is used. Shopify also doesn’t charge for return labels that expire unused. Other carriers and accounts may bill at creation, so check your terms first.
On Shopify alone, the label goes on your bill and you deduct any fee by hand at refund time. In QuickReturns, a Courier Rate fee rule charges the shopper the live label rate from your connected carrier. A fallback amount you set covers missing rates. The fee comes off the refund or goes on the exchange order.
Yes, most do. Through Shopify, USPS return labels expire 1 year after purchase, UPS labels after 6 months and FedEx labels after 90 days. The UPS label link expires after 30 days. For labels bought elsewhere, check the carrier’s terms and make sure the label outlasts your return window.
Sources: USPS return services · USPS Label Broker · UPS returns for business · FedEx returns · Shippo returns documentation · Royal Mail Tracked Returns · Evri parcel returns · DHL eCommerce UK ServicePoints and returns · Canada Post ecommerce returns · Australia Post parcel returns for business · Shopify Help: buying return labels · Shopify Help: return and cancellation rules · NRF and Happy Returns, 2025 returns estimate.
