The Default Return Service setting in your account applies to manual return labels and the Branded Returns Portal. You can access these settings in Settings . > Shipping > Returns
Here you will be able to set the default carrier service and package type for your Manual or Standard return labels. The default setting is to use the same services as the outbound shipment.
By default, the Automatically mark returns as "Received" if tracked option is checked. That way, if the return uses a service that supports auto-tracking, ShipStation will update the shipment as Received as soon as we receive the tracking notification from the carrier.
If this option is not checked, or the return service does not support auto-tracking, you can manually mark the shipment as Received in ShipStation so you can keep track of outstanding returns.