If you have paypal

I use the ship now option

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Fill in my address and check the box under my “return” Address with their origin zipcode. This will make a label with your address as both sender and receiver, but has the correct shipping.

You can either print it and mail it to them or save the pdf and email it to them for them to print…

Works for me…

If you shipped it via US Postal Service… sorry, you can’t do that. However, if you shipped via UPS or FEDEX directly through their website (and you have an account with them) you should be able to print out a prepaid return shipping label that on their website. Basically, you are prepaying the return shipping costs and giving them a label to stick on a package that is being returned.

You can also accomplish the same thing by refunding their return postage costs AFTER you get the item back. Make sure that you get a commitment on WHAT carrier/service the customer uses so that you don’t end up with the buyer expecting overnight delivery charges to be refunded. I would specify the exact amount of refund that the customer will receive — no more than what it cost you to ship the item to them.

Of course, if it is an item that the buyer just didn’t want, you are not expected to refund THEIR shipping costs. You only need to refund the cost of the item plus any original shipping they were charged. If you sent the wrong item, or if it was broken, then you do need to pay for their return shipping.

The USPS does offer an option to make return labels but it seems like such a hassle unless you are going to be using it quite often. Use of Merchandise Return Service requires that a USPS permit account be set up on site at a local USPS facility.
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Customer can create label via PayPal and ship it to you. You then send them the shipping cost. Tell them the address, service type and weight to use.