Customers can ask to return shipped items from their order page, choosing the items, a reason and a note, until the return period set in Store settings under Online returns has passed (30 days by default).
The team's admins are emailed, and Store › Returns lists every return. Approve or decline with a message to the customer, record how many items arrived and how many go back into stock, then close the return with a refund, a replacement order at no charge, or no refund. Each step is kept in the order's history.