Refund policy example: the clause no template gives you

What a refund policy actually commits you to

A refund policy is the published statement of when a customer gets their money back, how much of it, how long it takes and who pays to move the goods. Every example you find is written for one situation, the customer who changed their mind, and all of them go quiet on the case where the refund isn't in dispute, because you're the reason it's owed. I learned that in 2020, on the operations side of a brand running its own warehouse sale. Volume went vertical, the store stopped syncing with the warehouse and the brand oversold: around a thousand customers had paid for products that were never going to ship, and the refunds went out by hand. The policy on that site was fine. It just had nothing to say about that day.

NRF and Happy Returns put returns at 19.3% of online sales in 2025. A document that governs a fifth of your revenue deserves more than a copy and paste.

The clauses every example already has

These eight are the union of every element list on the first page of results. They're the floor, not the differentiator: getting them right earns nothing but the absence of an argument.

1. The window: how many days from delivery a customer has to start a return.
2. Eligible condition: unworn, unused, tags attached, original packaging, and who judges it.
3. How to start it: the request route, and whether an RMA is issued before anything ships back.
4. Who pays return shipping: you, the customer, or a flat fee deducted at refund.
5. Restocking fee, if any: whether one applies, and the returns it never applies to.
6. Refund method: original payment method, store credit or exchange, and who chooses.
7. Exclusions: final sale, personalized, perishable, hygiene and digital lines.
8. Contact: the address at which a dispute reaches a human.

Shopify's return rules make the restocking percentage merchant set and note that "Return fees aren't automatically deducted from refunds", so somebody applies them by hand. Eight clauses, and the usual answer to them is a template you download and fill in. Here's one written out instead.

A refund policy example, clause by clause

Written for a single storefront selling physical goods in the US, with the bracketed numbers yours to set. The timing isn't free text, because the FTC already defines a prompt refund, and the inspection step is what Shopify's returns flow assumes: it processes a return after "you receive and inspect your return items".

1. Return window: You have [X] days from the date your order is delivered to request a return.
2. Condition: Items must be unworn, unused, in original packaging with tags attached. We inspect every return on arrival and contact you if an item doesn't qualify.
3. How to request: Start your return at [returns page or email address]. We issue a return authorization first, and returns shipped without one may be delayed.
4. Return shipping: Return shipping costs [X] and is deducted from your refund. Where the return is our error, we pay it.
5. Restocking fee: A restocking fee of [X] applies to [category]; it never applies where the return is our error.
6. Refund method and timing: Approved refunds are issued to your original payment method within [X] business days of your return reaching our warehouse. Your bank may take longer to post it.
7. Exclusions: Final sale, personalized and perishable items can't be returned or refunded, and are marked on the product page.
8. Contact: Questions about a refund reach a person at [email address].
9. Faulty, damaged or wrong item: If an item arrives faulty, damaged or not what you ordered, you pay nothing. Tell us within [X] days and we'll arrange collection and refund you in full, including original shipping.

Nine clauses, and one situation still missing: nothing above covers the order that failed before it reached the customer.

The clause no template gives you

Every clause above answers one question: what happens when the customer doesn't want the thing. There's a second question, and it produces the refunds nobody argues about. What happens when the customer wanted it and you couldn't deliver it. Oversold, because the stock number was wrong. Never picked. Lost in transit. Shipped in the wrong size. Across every published example there's no clause for any of it. Write one.

Where we cannot fulfill your order as promised, we refund it without you having to ask. The refund is issued in full, including original shipping, to your original payment method, within [X] business days of us identifying the problem, and we tell you before you have to contact us.

That's not generosity, it's the rule put where the customer can read it. Under the FTC's Mail, Internet, or Telephone Order Merchandise Rule, a seller who can't ship within the time it stated, or within thirty days where it stated none, must offer the buyer "clearly and conspicuously and without prior demand" the option to cancel and take a prompt refund. You owe that whether or not the clause exists.

What the law actually requires of your policy

Most guides say "no federal requirement, some states require posting" and name no statute. Three rules, and one myth. This is what the rules say, not legal advice.

The federal refund clock. A prompt refund is seven working days from the date the buyer's right to it vests, or one billing cycle on the credit route. None of that is conditioned on your policy saying so. The card timing. Regulation Z gives the creditor seven business days from accepting a return to transmit the credit statement, and the issuer three business days to credit the account. Your stated timing sits on top of this, not instead of it.

Posting your policy. California Civil Code 1723 requires a retailer offering less than a seven day full refund or exchange to display its policy conspicuously. New York GBL 218-a requires an online policy displayed or hyperlinked before billing information is requested. Florida sets a statutory default for retailers that don't post one.

The cooling-off rule doesn't apply to you. That three business day cancellation right covers door-to-door sales. It's the most repeated wrong advice in this space and doesn't reach an online store.

Three states named, and the rest are yours to confirm where you sell.

Generous is not one setting

Every page on this subject tells you to be generous, or clear, or customer first, and none cites anything. There's evidence, and it says leniency isn't one dial. A meta-analysis in the Journal of Retailing, across 21 papers, separates leniency into five dimensions that don't move together. Overall it increases purchase more than it increases returns, and then the directions split.

• Time: a longer window reduces returns, which is the opposite of what most operators assume, and the researchers point at the endowment effect.
• Money: absorbing more of the cost yourself increases purchases.
• Effort: making the return easier to start increases purchases.
• Scope: widening what is eligible, sale items included, increases returns.
• Exchange: offering credit or a swap instead of cash reduces returns.

The dials that buy you purchases aren't the ones that move your return rate, so "be generous" isn't a policy decision. It's five decisions, not one.

A policy is a promise your operation has to keep

Go back to the refund timing clause. You published a number of business days from receipt, and receipt happens on a floor, in a queue, behind whatever arrived that morning. We see the same pattern on account after account: returns still awaiting processing days after they arrived, customers without their money back, and a policy that is, for them, untrue. Nobody notices until one of them emails, and by then the policy is a ticket.

A helpdesk is a system for replying about problems, not resolving them. Answering the customer and honoring the commitment are different jobs, and only the second is written in your policy. The category that does it's proactive e-commerce operations: detect the break, decide what to do, act. Keeyu doesn't write your policy, generate one or give legal advice, and it's not a returns portal, a carrier or an OMS. It sees the order that failed before the customer does, which is the part that has to happen before the clause above can be kept at all.

Make the policy true in the warehouse

A refund policy that's accurate on the page and untrue in the warehouse costs you the customer twice: once for the failure, once for the wait. Every order is a promise, and your policy is that promise written down, so it's worth what the operation behind it can keep. Keeyu detects the break in the order, decides the action and acts, usually before anyone has to ask for their money back. See how Keeyu works.

• National Retail Federation and Happy Returns. 2025 Retail Returns Landscape. NRF returns research
• Federal Trade Commission. Mail, Internet, or Telephone Order Merchandise Rule, 16 CFR 435.1, definitions. 16 CFR 435.1
• Federal Trade Commission. Mail, Internet, or Telephone Order Merchandise Rule, 16 CFR 435.2, unfair or deceptive acts. 16 CFR 435.2
• Federal Trade Commission. Cooling-Off Rule, 16 CFR 429.1, door-to-door sales. 16 CFR 429.1
• Regulation Z, 12 CFR 1026.12(e), prompt crediting of returns and refunds. Regulation Z 1026.12
• California Civil Code, section 1723, display of refund policies. California Civil Code 1723
• New York General Business Law, section 218-a, refund policies. New York GBL 218-a
• Florida Statutes, section 501.142, retail sales establishments and refund policies. Florida Statutes 501.142
• Janakiraman, N., Syrdal, H. A. and Freling, R. The Effect of Return Policy Leniency on Consumer Purchase and Return Decisions: A Meta-analytic Review. Journal of Retailing 92(2), 2016, pp. 226-235. Journal of Retailing meta-analysis
• University of Texas at Dallas, Naveen Jindal School of Management. Researchers Examine Effect of Return Policies on Consumers. UT Dallas research news
• California Department of Tax and Fee Administration. Sales and Use Tax Regulation 1655, Returns, Defects and Replacements. CDTFA Regulation 1655
• Shopify Help Center. Setting up return and cancellation rules. Shopify return rules
• Shopify Help Center. Creating and processing returns and exchanges. Shopify returns processing