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A contact in the file already exists, what happens?
Short answer: They are not duplicated: the row is merged into the existing profile. Empty fields are filled in, anything already there is never overwritten, and tags are added on top.
What identifies a person
The email address is what identifies the person. Two rows with the same address mean the same person, in the file as in your contacts.
What the merge does
| Data | Behaviour |
|---|---|
| First name, last name | Filled in only if they were empty. An existing value is kept. |
| Tags | The file's tags are added to those already applied. Nothing is removed. |
| Orders, history | Untouched. |
Duplicates inside the file
If your file holds the same address twice, both rows are grouped before the import: the first non-empty first name and last name win, and the tags from both rows are combined.
Re-importing a file you already loaded therefore creates no duplicates. The result shows it: those rows are counted as "merged" rather than "created".
Nor do those rows use anything up against the account's limit of 2,000 contacts: only the people actually added count towards it — see How many contacts can I import.