Can I offer a replacement if a customer asks for a refund on Etsy?

Hi! Yes—you’re allowed to offer a replacement on Etsy, but you generally can’t force a replacement if the buyer is clearly asking for a refund. The smoothest path (and the one least likely to turn into a case) is to quickly acknowledge the problem, ask for a couple of photos, and then give the buyer a clear choice: free replacement or refund (usually after a return, unless it’s not worth shipping back).

A good way to propose it without escalating things is to keep it simple, buyer-first, and “options-based”:

• Apologize + validate: “I’m so sorry it arrived scratched—thanks for letting me know.”
• Request proof (briefly): “Could you send 1–2 photos of the scratch and the packaging? This helps me fix packaging/handling issues.”
• Offer two clear resolutions:
  1. “I can ship a replacement at no cost right away,” or
  2. “If you’d prefer a refund, I can do that—once it’s returned (or I can refund without a return if that’s easier, depending on the situation).”
• Let them choose + set expectations: “Just tell me which you prefer and I’ll take care of it today.”

Here’s a message template you can copy/paste and tweak (keeping it friendly helps a lot):

“Hi [Name], I’m really sorry your item arrived scratched—that’s not what I want for you. If you can send a quick photo of the scratch (and the packaging, if possible), I’ll get this resolved right away. You can choose whichever you prefer: (1) I send a free replacement, or (2) I process a refund (typically once the item is returned). Just reply with your preference and I’ll take care of it.”

A couple extra tips to reduce dispute risk:

• Respond fast and stay in Etsy Messages / the Help Request thread if they opened one—Etsy wants to see you actively working toward a solution.
• Don’t sound like you’re blocking a refund. Even if you’d rather replace, wording like “I can only do a replacement” can trigger a case.
• Be specific about timing: “I can ship the replacement within 1 business day” / “I can refund as soon as it’s marked delivered back to me,” etc.

If you tell me whether your shop policies currently accept returns/exchanges for damaged items (and whether the buyer opened a “Help with order” request yet), I can help you tailor the exact wording for your situation.