Refund policy: how to write one for your shop

What a refund policy is and what it should cover

A refund policy, often called a return policy, tells a buyer what happens if they want to send an item back. It answers four questions: can the item come back, how long the buyer has, what they get back (money, store credit or an exchange), and who pays for return shipping. Within the posting rules below, a shop picks its own answers, as long as the policy is honest and it follows what it wrote.

The California Attorney General's consumer page puts the default plainly: when a store clearly displays a limited or no-refund policy, refunds and exchanges are not required by law. The reverse is the risk: in each of the four states in the table below, a shop that does not post its limited policy can owe a refund anyway.

A clear policy for an online store covers these points:

• Which items can be returned, and which are final sale (custom, personalized, perishable, digital, sale or as-is items).
• The return window, counted from delivery or from purchase.
• What the buyer gets: a refund to the original payment method, store credit, or an exchange.
• Condition rules: unused, with tags, in the original packaging.
• Who pays return shipping, and any restocking fee with its amount.
• How to start a return: email, a form, or the marketplace's return button.
• What happens with damaged, wrong or lost orders, which every shop has to fix regardless of its return policy.
• How long refunds take to process once the item arrives back.

State laws on posting a refund or no refund policy

The rules on posting a refund policy come from state law, and they differ from state to state. The table lists four states whose statutes were read on 2 Oct 2026 on the official statute sites. Other states have their own rules, and cities can add more, so check the state attorney general or consumer protection office where you and your buyers are.

New York's law is the most specific for online stores. The notice has to say whether refunds are given and under what conditions, including whether a refund is given on merchandise which had been advertised as "sale" merchandise or marked "as is", whether it is given at any time or not beyond a point in time specified, whether it is paid in cash, or as credit or store credit only, and any fees, including a restocking fee, and the dollar or percentage amount of each fee. It must also tell buyers they are entitled to a written copy of the store's refund policy upon request.

Laws like these change in legislative sessions. Re-check the statute pages linked in the sources every six months and after each state's legislative session, and update the policy date on your own site when you do.

Final sale and custom items: when no refunds is allowed

A no refund policy is allowed in each of the four states in the table when it is posted the way that state asks, which means the buyer sees it before paying. In New York, for example, the online notice must appear a notice displayed or made accessible by hyperlink near the item itself or before billing. A final-sale line the buyer only sees in the parcel does not meet that test.

Custom work gets the most room. California's posting rule does not apply to goods marked "as is," "no returns accepted," "all sales final," or with similar language, goods used or damaged after purchase, and customized goods received as ordered, and it also excludes food, plants, flowers, perishable goods. Florida's rule does not cover food, perishable goods, goods which are custom made, and goods custom altered at the request of the customer. Minnesota's does not cover goods custom ordered or special ordered by the consumer.

A final-sale policy still has limits. It covers a buyer who changed their mind. It does not cover an item that never arrived, arrived broken or is not what the listing described. The California Attorney General notes that an implied warranty exists by law even if the seller does not make any specific guarantees, and marketplace programs such as Etsy Purchase Protection refund those orders. Write the final-sale section so it says what is excluded and, in the next sentence, what you will still fix.

• Say which items are final sale: custom, personalized, made to order, perishable, digital, or marked as-is or clearance.
• Show the final-sale note on the product page and at checkout, next to the item.
• Keep a separate line for damaged, wrong or missing orders, with how the buyer reports them and how fast you reply.
• Do not call an item custom if the buyer only picked a size or color from a list.

Etsy and marketplace minimum rules

On a marketplace, the marketplace's own rules sit on top of state law. Etsy is the clearest example for makers. Etsy Help says sellers outside the EU must set a return policy whenever you edit or create a new listing for a physical item, even if the policy is no returns. Whether to accept returns is completely optional. Not setting one has a cost: Etsy says it may result in listings appearing lower in Etsy search.

Etsy also limits what a no-returns policy can do. Etsy's buyer help says sellers are not required to accept returns, exchanges, or provide a refund unless stated in the return policy on their listing, but its Purchase Protection program gives qualifying buyers a full refund if your order never arrives, arrives after the estimated delivery window, arrives damaged, or isn't as described. A late order counts once it arrives 7+ days after the estimated delivery date window. A buyer can open a case after you've contacted the seller for help at least 48 hours ago.

Other Etsy points that change the policy you write:

• Digital downloads: it is not possible to set return or exchange policies on your digital listings, so put any refund promise for digital items in the listing text.
• Custom items: Etsy suggests using the shop FAQ, listing descriptions or Messages to Buyers let shoppers know that you do not accept returns for customized or personalized items.
• EU buyers: Etsy notes that EU law requires some sellers to offer a minimum 14-day return policy on orders that ship to those countries.
• Other marketplaces run their own buyer guarantees. Read the selling policy of each one you list on, because its guarantee can override a no-returns line.

How to write a refund policy in six steps

These steps work for a return policy for an online store, a market stall or both.

1. List what you sell by type

   Split products into stock items, made-to-order or personalized items, perishables, digital files and sale items. Each type can get its own rule.

2. Choose a rule for each type

   Pick refund, exchange, store credit or final sale. Check the state table above: in each of those four states a limited policy has to be posted, or the shop can owe a refund anyway.

3. Set the window and the conditions

   Decide how many days the buyer has, whether the count starts at delivery, and what condition the item must be in. Say whether a receipt or order number is needed.

4. Decide who pays for shipping and fees

   State who pays return postage. If you charge a restocking fee, give the amount; New York requires the notice to state any fees, including a restocking fee, and the dollar or percentage amount of each fee.

5. Write the problem-order section

   Explain what the buyer does if an order is damaged, wrong or lost, and what you offer. This part applies even to final-sale items.

6. Post it where buyers see it before paying

   Link the policy from every product page and from checkout, set it in each marketplace's policy settings, and print it on a sign at markets if you sell in person.

Refund policy template and examples

The wording below is an example to adapt, not legal advice. Replace every bracket, and delete lines that do not apply. It is written for a small shop that takes returns on stock items and sells custom items as final sale.

• Example return policy template: "Returns. You can return unused items in their original packaging within [number] days of delivery for a refund to your original payment method. Email [address] with your order number to start a return. [You / We] pay return shipping."
• Example final-sale wording: "Final sale. Personalized, custom and made-to-order items, sale items and digital downloads are final sale and cannot be returned or exchanged, unless they arrive damaged or not as described."
• Example problem-order wording: "Damaged or wrong items. If your order arrives damaged or is not what you ordered, email us within [number] days of delivery with a photo. We will send a replacement or a full refund."
• Example refund timing: "Refunds. We issue refunds within [number] business days after the item reaches us. Your bank may take longer to show it."

No refund policy example: "All sales are final. We do not accept returns or exchanges. If your order arrives damaged or not as described, email us within [number] days of delivery and we will make it right." Post this on the product page and at checkout, and on a sign at the register for in-person sales, in a state that requires it.

The federal rule that forces a refund: late shipping

One federal rule can require a refund whatever your policy says. The FTC's Mail, Internet, or Telephone Order Merchandise Rule applies to most goods a customer orders from the seller by mail, telephone, fax, or on the Internet. If you give no shipping time, you need a reasonable basis to ship within 30 days. If you cannot ship on time and the buyer does not agree to the delay, you must promptly refund all the money the customer paid you for the unshipped merchandise.

For most payment methods the FTC says the refund is due within seven working days after the order is cancelled. Made-to-order shops should put a realistic production time on each listing, because that stated time is what the rule measures you against.

Where Nation fits

Questions about refund policies