A merge tag allows you to insert unique user data from your mailing list into emails. Common merge tags are used for first and last names and addresses. In the case of package tracking, you can also create a merge tag for carrier identification (UPS, USPS, FedEx, etc.) and tracking number.
Do I need a merge tag?
If you are using the notifications that are sent out via Shopify, then you will not need to know merge tags. Most users of Shopify basic will use Shopify's notifications.
However, if you are using Shopify Plus along with an ESP for your transactional emails, you will need to contact your ESP to set up merge tags for the carrier and tracking numbers.