Use your Merge Tags settings when products have different variations of a similar option.
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For example, if your shop has t-shirts variants with different shades of blue like cyan, cobalt, and navy blue, you can use the Merge Tags feature to merge them all into a single filter option called "Blue". This way, customers can see your cyan, cobalt, and navy blue t-shirts by simply selecting the filter option "Blue".
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In your Collection Filter dashboard, click Merge Tags. On each line, enter a list of the variations you want to merge separated by a comma. Then, enter a colon followed by the name you want to merge those options into.
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For example, on a single line enter Cyan, Cobalt, Navy Blue: Blue.
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Follow the same steps for any tags you want to merge and click Save when you're finished.