
umtauschen
to exchange / return
To bring a purchased item back to a store and receive another item or the money back in return.
Ich möchte diese Hose umtauschen, sie passt mir nicht.
I would like to exchange these pants; they don't fit me.
to exchange
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to exchange / return
To bring a purchased item back to a store and receive another item or the money back in return.
Ich möchte diese Hose umtauschen, sie passt mir nicht.
I would like to exchange these pants; they don't fit me.

to exchange
To change one currency into another, for example euros into dollars.
Vor der Reise in die USA müssen wir noch Euro in Dollar umtauschen.
Before the trip to the USA, we still need to exchange euros for dollars.
'Umtauschen' (to exchange) is a separable verb. The prefix 'um-' goes at the end of the main clause. In subordinate clauses and in the infinitive with 'zu', the verb stays together.
Ich tausche die Jacke um, weil sie zu klein ist.
I am exchanging the jacket because it is too small.
How can you recognize the meaning? If it is about money (euros, dollars), it means currency exchange. If it is about products (pants, gift), it means returning goods.
Können Sie mir sagen, wo ich hier Geld umtauschen kann?
Can you tell me where I can exchange money here?
When you return an item and get something else in exchange, the preposition 'gegen' (for/in exchange for) is often used.
Sie können den Pullover gegen eine andere Größe umtauschen.
You can exchange the sweater for another size.
When exchanging currencies, the target currency is connected with the preposition 'in' (with the accusative).
Am Flughafen kann man Schweizer Franken in Euro umtauschen.
At the airport, you can exchange Swiss francs for euros.
to change / switch
Both words can express replacing a purchased item with another one. Wechseln is more general and simply describes the replacement; umtauschen emphasizes that you return the purchased item and receive another item or money in return. When returning something to a store, umtauschen is more precise.

Im Laden tauschte ich die zu kleine Jacke gegen eine größere um.
At the store, I exchanged the jacket that was too small for a larger one.
Im Laden wechselte ich die zu kleine Jacke gegen eine größere.
At the store, I changed the jacket that was too small for a larger one.