Why would an order get cancelled?
If an Amazon, eBay, Etsy or Walmart order which has been sent to Shopify gets cancelled on the marketplace, the corresponding order in Shopify is cancelled.
What happens to inventory levels?
Inventory levels remain unaffected. The cancellation does not restock the product. This behaviour is deliberate. Consider the possible reasons for a cancellation, for example, unable to fulfil due to soiled or missing stock. The only exception to this is if the order is cancelled before it is paid, as the cancellation is due to non-payment, so the product is restocked in this scenario.
Shopify is not notified of the reason from the marketplace, only that it was cancelled.
If Marketplace Connect were to restock the product, it risks overselling an item which is unavailable.
If a customer cancels an order, you will need to manually adjust the inventory to put the product back into stock.
The order will be marked as refunded in Shopify Admin but this will not sync back to the marketplace, this is because Marketplace Connect can only sync the order status once.
For further assistance please reach out to marketplace-connect@shopify.com