Free Return and Refund Policy Template

E-commerce has revolutionized the way we shop, offering unparalleled convenience to customers all around the world. However, running an online store comes with its own set of legal responsibilities, especially when it comes to return and refund policies.

This article will provide a comprehensive guide on crafting a return and refund policy that complies with regulations in the EU, UK, and the US and give you a return policy template and refund policy template that you can use for your business.

What Is a Return Policy?

A return policy is a set of guidelines that helps a business manage returns. It defines when a customer can return an item, the timeframe within which returns are accepted, the process to request a return, etc.

Having a clear return policy helps simplify the return process and gives your customers an exact idea of what they can expect when they buy from you.

Why You Need a Return Policy

If you sell online, a return policy is a must-have: most countries’ industry regulations require online stores to have an agreement to inform users about their policy on returns and refunds.

For example, in the EU, the right of withdrawal can go from 14 days to 1 year and 14 days, if users are not informed of their rights before accepting your return policy or Terms and Conditions document. Also, you’ll have to pay the return shipping costs for EU customers.

In the US, not having a clear return policy can result in legal complications and damage your brand reputation.

What Is a Refund Policy?

A refund policy is a clear statement that outlines your conditions for requesting and receiving a refund for products or services. It is extremely important in e-commerce.

The information it includes can vary depending on what you sell, but it typically covers the products or services eligible for a refund, the timeframe in which a refund can be requested, and the process for requesting and receiving a refund.

Why You Need a Refund Policy

As for the return policy, providing details about refunds to your customers is a requirement under consumer laws.

In the EU, consumers have the right to return purchases made online or through other types of distance selling, such as by phone, mail order or from a salesperson, within 14 days for a full refund.

In the US, there is no federal law. However, under several state laws, if no refund notice was made visible during purchase, consumers are automatically granted extended refund rights.

What’s the Difference Between a Return Policy and a Refund Policy?

As you can see, returns and refunds are often managed together, but the processes that these policies manage are different.

A return policy defines when and how your customers can return what they’ve purchased from you and then request a refund or exchange.

A refund policy outlines whether refunds are accepted and when they are issued. There may be times when customers can get a refund but are not expected to return the product they purchased. For example, if the product is faulty or damaged.

Return and Refund Policy: Legal Requirements

Providing all the details concerning returns and refunds isn’t just good practice, but it’s also legally required by many consumer regulations. In many countries, when customers are not made aware of their rights, they are automatically granted extended rights – like the 1-year and 14-days return period in the EU we mentioned earlier.

Let’s take a closer look at the guidelines governing returns and refunds in Europe, the United Kingdom, and the United States.

Returns and refunds in the EU 🇪🇺 and UK 🇬🇧

Online, mail and telephone order customers have the right to cancel their order for a limited time even if the goods are not faulty. Here are the rules:

• You must offer a refund to customers if they’ve told you within 14 days of receiving their goods that they want to cancel. They don’t have to give any reason.
• Customers have another 14 days to return the goods once they’ve told you.
• You must refund within 14 days of receiving the withdrawal decision. Anyway, you may withhold the refund until you receive the goods back, or until the customer gives you proof that they’ve sent the goods back, whichever is the earliest.

As for the return shipping costs,

• Usually, in the EU and UK consumers have to pay for the return shipping costs, but this is something you must inform them about before the purchase.

However, not all products are covered by the right to cancel. For example, the following items can’t be refunded:

• perishable goods;
• personalized items and custom-made items;
• services that have been fully performed (in certain specific circumstances);
• newspapers and magazines;
• culture and sports events.

Return and refunds in the US 🇺🇸

As we already said, in the United States, laws surrounding return and refund policies can vary by state. However, it’s a good practice to offer a clear and concise policy. A 30-day return policy is often considered standard.

As for return shipping costs, it’s common for customers to pay for return shipping costs (unless the item is defective or the wrong item was sent), but you need to clearly state that in your return policy.

Moreover, in your return policy, you may include a list of non-returnable items, such as:

• perishable items;
• gift cards;
• downloadable software;
• health and personal care items.

What to Include in a Return and Refund Policy

Before diving into the return and refund policy template, let’s examine the essential elements of a sound return and refund policy.

Your return and refund policy should include at least the following sections:

• Timeframe for return: How long do your clients have to return the products? This usually falls between 14 and 30 days.
• Condition of return: What condition should the products be in when they’re returned? As a general rule, products should be unused, in their original packaging, and with all tags attached.
• Shipping cost: Who is responsible for the shipping costs? In general, customers pay for the shipping costs, but you should clearly state that.
• Refund method: How do you issue refunds? What products can be refunded? Explain whether you’ll refund your customers through the original payment method, as store credit, or as an exchange. Note that in the EU, customers have the right to always receive a refund on their original payment method, and store credits and exchange can only be added as alternative options.
• Exceptions and exclusions: What items aren’t eligible for return or refund? For example, final sale items (in the US), custom-made products, or perishable goods can’t usually be returned.
• Contact information: This is so customers can reach out with any questions or issues related to their return.

Return and Refund Policy Sample

Return and refunds can vary depending on the type of store. Usually, big e-commerce stores tend to have a more permissive return policy, while small businesses could choose a stricter one to protect them from excessive returns.

Small Business Return Policy Example

The return policy of a small business can vary a lot depending on what kind of business it is, what products it sells, and who its customers are.

For instance, a small e-commerce business might let you return items within 14/30 days for a full refund, and add exchanges or store credit as refund options. Sometimes, small businesses might also have a “final sale” policy on their products, meaning that items can’t be returned.

These policies are designed to protect the business from potential losses while still offering customers a fair and reasonable way to address any issues with their purchases.

Boutique Return Policy Example

A boutique return policy usually reflects the personalized and customer-focused nature of small, independent shops.

In a boutique setting, the return policy is often flexible and customer-focused, while also protecting the business from excessive returns. For example, a boutique might let you return items within 14 to 30 days of purchase, as long as they’re in their original condition and packaging with tags attached. The policy might also include options like store credit or exchanges instead of full refunds, especially for items on sale or custom orders.

This approach balances the need to keep customers happy with the financial realities of running a smaller business.

SaaS Business Return Policy Example

SaaS businesses usually have a return policy based on subscription terms and refunds for digital products.

Since SaaS products are often delivered instantly and used immediately, some companies may apply exceptions to the right of withdrawal. Some SaaS companies might also have rules about trial periods, cancellations, and things like setup fees or custom integrations.

Return Policy Template

Here below is a standard return policy template that you can use for your online store. Remember to customize each section according to your business needs.

Refund Policy Template

As you can see from the return policy template above, refunds are often included in the return process. However, if you wish to have two separate sections or documents, we’ve also prepared a standard refund policy template. Make sure to customize it according to your needs.

Where to Add Your Return and Refund Policy

Besides being clear and easy to read, your return and refund policies should also be easy to find on your website. In this way, customers can see it before they buy. A few key places to list this policy include:

• Your website footer
• FAQ page
• Product page
• Cart
• Checkout

Please note that you could also add the return and refund policy in your Terms and Conditions rather than having a separate agreement.

Frequently Asked Questions

Is a Return and Refund Policy Enough?

A return and refund policy is an important document, but it is not enough on its own. A well-rounded business should have a Terms and Conditions document to be protected from legal and financial risks.

Terms and Conditions are mandatory for e-commerce because they contain all the information about the conditions of sale and disclosures on methods of payment, shipping, delivery, withdrawals, cancellation conditions, warranties, etc.

That is why your return and refund policy should be included in your Terms and Conditions.