E-commerce has revolutionized the way we shop, offering unparalleled convenience to customers all around the world. However, operating 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 policy that complies with regulations in the EU, UK, and the US.

What is a return policy?

A return policy is a set of guidelines that helps a business to manage returns or refunds. It defines when a customer can return an item, the timeframe within which returns are accepted, the process to request a return or refund, 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 and refund policy is a must-have: most countries’ industry regulations require stores (even digital ones) to have an agreement to inform users about their policy on returns and refunds.

For example, in the EU not having a return policy can expand the right of withdrawal from 14 days to 1 year and 14 days. 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 to include in a return 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 the products should 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: Let your clients know who’s responsible for the shipping costs.
• Refund method: How you’ll issue refunds, whether through the original payment method, as store credit, or as an exchange.
• Exceptions and exclusions: What items aren’t eligible for return, like final sale items, custom-made products, or perishable goods.
• Contact information: This is so customers can reach out with any questions or issues related to their return.

Here you can find additional information.

Where to put a return policy

Make sure that your return and refund policy is easy to find on your website so that customers 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 add the return policy in your Terms and Conditions rather than having a separate agreement.

Return Policy Template

Examples of return policies

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 30 days for a full refund, while a local artisanal shop might only offer exchanges or store credit. 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 have a limited refund period, like offering refunds within the first 7 days of a subscription if the customer is unsatisfied. Some SaaS companies might also have rules about trial periods, cancellations, and things like setup fees or custom integrations.

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 the customer within 14 days of receiving the goods back.

Returns and refunds in the US

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.

Return shipping costs

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

• In the UK, return shipping costs are borne by consumers, unless sellers have stated otherwise. Furthermore, you must take back at your own expense the goods that, by their nature, cannot normally be returned by post.

• In the US, it’s common for customers to pay for return shipping unless the item is defective or the wrong item was sent.

Exceptions to Refund Policies

EU and UK

Some purchases are not covered by the right to cancel, for example:

• perishable goods;
• personalized items and custom-made items;
• services that have been fully performed;
• newspapers and magazines;
• culture and sports events;
• trips and accommodations.

US

Exceptions often include:

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

How iubenda can help you generate a return policy for your eCommerce store

With our Terms and Conditions Generator you can – among other things – inform customers about your policies regarding returns and refunds.

Our solution lets you easily generate and manage Terms and Conditions that are professional, customizable from over 100 clauses, drafted by an international legal team, available in +15 languages, and up to date with the main international legislations.

It comes with:

• guided set-up;
• hundreds of possible personalizations;
• legislation monitoring;
• plug-and-go integrations for popular store platforms such as Shopify and WooCommerce;
• pre-defined scenarios: buildable text modules for marketplace, affiliate programs, copyright, eCommerce, mobile, and more.

The solution is optimized for everything from eCommerce (including affiliate programs), blogs, and apps, to complex scenarios like marketplace and SaaS.

Read also

• What Legal Documents Are Required for eCommerce
• How to Write Terms and Conditions for an eCommerce Store
• Privacy Policy for eCommerce Stores
• Cookie Banner for eCommerce: Example and Why You Need One