How to cancel eBay order as seller after payment

How to Cancel eBay Order as Seller After Payment

eBay sellers tend to treat canceled orders as some sort of a cardinal sin. However, there are certain situations where you can’t avoid canceling an order. For example, if an item gets lost, damaged, or has been sold out after it was listed, and there is no way that the transaction can be completed successfully within the stipulated time, you may have no other choice but to cancel the transaction.

Canceling eBay orders can, however, be a sticky situation. Getting it right the first time is important so you don’t end up getting your seller performance dinged or even banned from selling. Here’s how you can cancel eBay orders as a seller after payment, along with best practices for doing so.

How to Cancel eBay Orders Without Receiving a Transaction Defect





First, make sure you have carefully considered other options before even thinking about canceling an eBay order. As the eBay seller, it is important that you do all that you can to not cancel orders.

If there’s no way to fulfil the order, you can send a message following this template to your customers:


“Hi (Buyer name), How are you? Thank you for your purchase. I’m sorry to let you know, but when your order was processed we found a defect in the purchased product, and we didn’t want to send you a defective item. I’m now thinking about how to compensate you. What do you think? Would you prefer to cancel the order? I also sell other versions of this (item) at a much cheaper price and I’ll give you a refund for the difference. {Insert link for the cheaper item here}. Please let me know what you prefer. Sincerely, (Your Name)”


You should not cancel an item for being out of stock as this will have a significant impact on your store or seller performance. eBay’s policy stipulates that canceling an item for being out-of-stock will amount to a transaction defect. You should first obtain the buyer’s go-ahead and then proceed to cancel the order on their request. Buyers aren’t allowed to cancel orders from their end but they can send cancellation requests to the seller.

You have three days from the time the buyer requests to cancel the order to decide whether or not to do so. You can do this through Seller Hub or the Sold section of My eBay.

Canceling an order on eBay usually involves taking the following steps:

Step #1: Go to orders and find the item you want to cancel. Click the dropdown button and select cancel order.

Step #2: Put the reason for cancellation. Make sure you select “Buyer asked to cancel” from the three options available. We don’t choose any of the other options because eBay asks for proof of these other options and as a dropshipper, you might not have this proof.

Step #3: Click Submit

That’s all there is to it and you have successfully canceled an order. Orders can be canceled up to 30 days after a sale, even if the buyer has already paid.

A full refund will be issued automatically when you cancel an order. You may also be eligible for a fee credit as per eBay’s fee credits policy. Once the buyer has been refunded, eBay refunds the entire final value fee, including the $0.30 per-order fee.

If a buyer completes the payment through eBay checkout, a full refund will be issued to the buyer’s original payment method after the order is canceled. If payment was not completed through eBay checkout and the seller cancels an order (for example, the buyer paid via check or cash), it is up to the seller to issue a full refund.

Items in canceled orders are also automatically relisted. If you do not want your item to be relisted, simply uncheck the “Relist item after cancellation” box when you’re canceling the order.

When Can You Cancel Orders?


When can you cancel orders


An order can usually be canceled without a transaction defect if one of the following events occurs:

  • If the buyer specifically requests for the order to be canceled and the item has not shipped.
  • The buyer has not paid for the item within the time allowed.
  • When the buyer completed their purchase, they used the wrong shipping address.

You can technically cancel an order due to the item being out of stock, but it will result in a transaction defect and will impact your seller performance.

When are You Not Allowed to Cancel an Order?

You won’t be able to cancel an order on eBay if the buyer has requested a return or if they have reported that the item has not arrived.

Best Practices for Cancelling eBay Orders


Best practices for cancelling eBay orders


Here are a few tips and strategies for canceling eBay orders:

  • You should avoid putting yourself where you have to cancel an order to prevent running at a loss e.g setting a low starting price without using a reserve price.
  • Be absolutely certain about the item’s selling price before putting it up for sale.
  • If you absolutely have to cancel, be sure to select the option “Buyer asked to cancel.” Also, reach out to them with a personal message first.
  • You should avoid canceling due to being out of stock. Too many transaction defects may lead to your seller account being suspended.
  • You should avoid claiming the buyer asked for the order to be canceled if they didn’t. It is unethical and may reflect badly on your eBay business.
  • Unless an order was canceled for non-payment, buyers can still leave feedback on canceled transactions.
  • Try your best to offer an equal alternative, if you cannot offer the original product.


What Happens If the Buyer Wants to Cancel an eBay Order?

The buyer may ask to cancel an order without you initiating it. As an eBay seller, you can choose to accept or decline this request. If you decline or if the order has already shipped out, the buyer will then have to wait till the item is delivered before starting a return request. As long as they haven’t yet shipped the product, eBay encourages sellers to accept a buyer’s cancellation request. However, ideally buyers can only cancel an order if is not more than an hour.

Contrary to what you may think, any no returns policy you may have is superseded by the eBay money-back guarantee. If you don’t cancel, they will return it, giving you your items back, but there’s a chance you won’t receive your money back for the initial delivery and there’s a chance you’ll get bad reviews.

Do you Get Penalized for Canceling an Order on eBay as a Seller?

Not necessarily. If the buyer requested to cancel, you have little to lose, except maybe PayPal fees and time. On the other hand, if you’re canceling for any of the other reasons, you might have a costly transaction defect on your hands, as well as damaging feedback.

Also, abusing the cancellation process can lead to any number of sanctions on your seller account, such as canceled listings, hiding or demoting all listings from search results, lowering seller rating, buying or selling restrictions, account suspension, and application of fees.

Consequently, sellers should keep an accurate stock inventory and store items in an orderly manner.

Suffering from a lower seller rating? Check out our tips on 
increasing your eBay seller rating quickly.

What Happens After You Cancel an Order?

When you return an item for a full refund, it happens automatically. When the buyer has received a refund, you may be eligible for a fee credit, under eBay’s policy on fee credits. If you agree to a buyer’s cancellation request, eBay will pay you back the full final value fee credit, including the $0.30 per order fee.

Unless you choose not to, your item will be immediately relisted. When canceling the transaction, simply tick the box that says Relist item after cancellation if you don’t want your item to be relisted.

If you cancel the order due to nonpayment, the buyer’s feedback will be removed, and it won’t have any affect on your seller standards.


Canceling orders is not something to be taken lightly. You want to ensure that when you cancel an order, it doesn’t come back to bite you later on. If you’re going to cancel an order on eBay, make sure it is because the buyer asked to cancel. One canceled order isn’t the end of the world, just as long you don’t make a habit of it. Use a proper inventory management system and monitor your stock levels closely. Always treat customers with due respect and remember that the customer is always right.