You may need to cancel an order if a customer has changed his mind or if it is a spam order. An order can be canceled if it is in the open orders only i.e it should not be a closed (already paid and delivered) or canceled order.
Click on the vertical ellipsis icon against the order that you want to cancel.
Choose Cancel Order from the dropdown. The following pop up appears:
Click OK if you are sure to cancel the order.Provide the reason for cancellation and click OK.
Once the order is cancelled, the inventory of the products in the cancelled order will be automatically updated and mail notification of cancellation of order is sent to admin, customer, and seller.
If the order is already shipped or its pickup is generated then to automatically notify the shipping provider about order cancellation you need to cancel the shipment, refer Cancelling a shipment for more details.