Switch it on. Open Settings → Modules, find Returns & RMA and enable it. Sales → Returns and Sales → Return Reasons appear.
Set your policy. Click Configure:
Return Window (days) — how many days after delivery customers can ask. 7 is common in India for fashion; 10–30 for other goods.
Require Reason — keep on.
Auto-approve Returns — keep off at first so you see every request.
Leave Prepaid return labels off unless your shipping provider supports return labels (see Settings reference).
Add return reasons. In Sales → Return Reasons, click Add Reason: Wrong size, Damaged in transit, Not as described, Wrong item received, Changed my mind.
Publish your return policy on a page (My store → Pages) and link it in your footer: the window, condition of items (unused, tags on), and what you refund.
Test. Mark a test order delivered, then request a return from the customer's account.