Refund and Cancellation

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What is

Refund and Cancellation

A refund policy is a document that outlines the rules for getting refunds for purchased goods and services. A refund policy often details the eligibility requirements for refunds, types of refunds given, the refund timeframe, and the return process. It is a policy that dictates the terms of any refunds or returns which may be offered by the website or eCommerce store. The term Cancellation Clause refers to the terms mentioned in the contract, in which it is stated under which terms a cancellation can occur. It is not a negotiated contract - in other words, there are no two sides to this document.


1. What is the need for a Refund Policy?

While the privacy policy agreement is the only one that is required to be put on display by the law, the terms and conditions agreement and return and cancellation policies are optional. If a clear return policy for an item is visible to people, it will be easier for them to make an informed buying decision. It’s easier to convince someone to make a purchase when they have all their questions answered, including those regarding refunds. A refund policy can also protect your interests by helping you to play it safe on the legal side.

2. What to include in a Refund policy?

A refund policy should be broken down into smaller sections, this increases the readability of the document, and it makes it easier for customers to find what they need.

A refund/return policy should usually contain these three sections:

  • Within how many days a customer must return the product and how does the counting of the days start?
  • If the customer returns a product, the return policy shall specify what kind of refund they are eligible to get.
  • The return policy shall specify the payment or the return shipping.

3. Who should have a refund policy?

Every retailer should provide a Refund Policy. This includes companies selling:

  • Goods e.g., fashion retailers
  • Digital content e.g., app developers
  • Services e.g., digital content creators

If someone pays for anything, they have a right to know what happens if they're unhappy with what they get.

4. Are Refund Policies legally binding?

Yes, they are legally binding. Refund Policies are, essentially, legally enforceable contractual terms between you and the customer. These terms are only enforceable if they are clearly set out, agreed to by the customer, fair and reasonable, and lawful i.e., a contract is not entered for any illegal activity.