With the introduction of the advanced eCommerce options and the Multi-Vendor system, we also need one more order status besides Processing, Shipped, Completed and Cancelled.
The new status is Refunded.
Many times, customers will take advantage of the 14 day return period, to test a tangible product then return it for a refund.
Now you might say that we already have Cancelled as a status, but this should apply only when an order hasn't been shipped yet and the customer sent a cancellation request.
So it's better to differentiate between these types of situations, because this way we'll know when an order was cancelled by request and refunded by return.
Thanks!