austauschen
to replace
To replace something old, defective, or unsuitable with something new or different.
Der Mechaniker muss den platten Reifen am Auto austauschen.
The mechanic has to replace the flat tire on the car.

to replace / exchange
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to replace
To replace something old, defective, or unsuitable with something new or different.
Der Mechaniker muss den platten Reifen am Auto austauschen.
The mechanic has to replace the flat tire on the car.

'Austauschen' (to replace / exchange) is a separable verb. The prefix 'aus-' comes at the end in a main clause. In subordinate clauses and in the infinitive, the verb stays together.
Ich tausche die alte Batterie aus.
I replace the old battery.
In the meaning 'miteinander reden' (to talk with one another), the verb is always used reflexively: 'sich austauschen' (to exchange ideas). The preposition 'über' (+ accusative) indicates the topic of the conversation.
Wir sollten uns bald über die neuen Pläne austauschen.
We should exchange ideas about the new plans soon.
When replacing something, you use the structure: 'etwas (Akkusativ) austauschen' (to replace something [accusative]). To name the new part, you can add the preposition 'gegen' (+ accusative).
Können Sie bitte die leere Druckerpatrone austauschen?
Could you please replace the empty printer cartridge?
to replace / reimburse
'ersetzen' and 'austauschen' are very close in meaning when something old, defective, or unsuitable is replaced by something new. 'austauschen' often describes the practical process: you take one part out and put another one in. 'ersetzen' places more emphasis on the function: the new thing takes the place or role of the old one. With devices, furniture, or parts, both words often fit. With people or more abstract things, 'ersetzen' often sounds more natural. There is a high risk of confusion because in many everyday situations both are possible.

Der Hausmeister tauscht die kaputte Lampe im Flur aus.
The caretaker is replacing the broken lamp in the hallway.
Im Büro ersetzt morgen ein neuer Drucker das alte Gerät.
A new printer will replace the old device in the office tomorrow.