When you cancel an order, the payment status changes to either Refunded or Voided. If a payment hasn't been captured, then the payment status is Voided. If the payment has been captured, then the payment status is Refunded. If you partially refund an order with a captured payment, then the status is Partially refunded.
From your Shopify admin, go to Orders.
Click the order that you want to cancel.
Click More actions > Cancel order.
If payment was captured, then then details about the refund are displayed.
If you don't want the refunded items to be restocked in your inventory, then uncheck Restock items.
Select the reason for cancellation from the drop-down menu.
If you don't want to notify your customer of the cancellation, then uncheck Send a notification to the customer.
Click Cancel order.