All returns are paid in store credit.
Receiving gifts from loved ones is great, but getting an item you're not particularly interested in is less than ideal. Thankfully, if someone buys you a gadget or accessory from the Google Store, you can now return it in exchange for credit towards a future purchase.
The Google Store has a new gift returns page, and after logging in with your Google account, you'll need to enter the order ID number and shipping zip code. You could be faced with a potentially awkward conversation asking the person who got you the gift for the order ID, but I'll let you figure out how to go about that.
Additionally, the product(s) in question must have been marked as a gift during the time of purchase. If not, this process won't work.
Once this information is entered and the order has been located, select the items you'd like to return and Google will send you a pre-paid shipping label to ship the item(s) back. After they're received, you'll get a Google Store credit on your account that can be used towards a future purchase. This credit can't be transferred for cash or to your bank account, but Google says that it won't ever expire.
Gift returns are currently live in the United States and it's unclear if/when Google will roll this out to more countries.