Websites · Glossary
What is a refund policy?
A refund policy is a shop's published statement of when customers can return items and get a refund, exchange or credit, how to ask, and how long it takes. It can add to customers' legal rights, for example by offering change of mind returns, but it cannot remove the rights consumer law already gives them.
Most refund disputes start with a policy that says less than the law, or more than the shop meant. A short, accurate policy is one of the cheapest ways to prevent them.
Nuwan Madhusanka · Co-founder
4 min read · Published
| Situation | Australia | United Kingdom, online sale |
|---|---|---|
| Customer changed their mind | No legal right; the shop decides and must honour its own policy | Usually 14 days to cancel after delivery, then 14 days to return |
| Item has a major fault | Customer chooses a refund or replacement | Short term right to reject a faulty item, then repair, replacement or refund |
| Item has a minor fault | Shop may choose to repair instead | Repair or replacement first, then a price reduction or refund |
| No refunds sign | Not allowed | Misleading customers about their rights is not allowed |
What a refund policy covers
A clear policy answers five questions: which items can be returned and for what reasons, the time limit, the condition items must be in, what the customer gets back, whether a refund, exchange or credit, and how to start a return, including who pays return postage. It should separate change of mind returns, which are the shop's choice in Australia, from faulty or not as described items, which the law covers. Say how refunds are paid, usually to the original payment method, and how long they take.
The law in Australia
Under the Australian Consumer Law, customers have consumer guarantees that goods are of acceptable quality, fit for purpose and match their description. If an item has a major failure, the customer can choose a refund or replacement; for a minor failure the business can choose to repair. The Small Business Development Corporation in Western Australia notes that displaying a no refund sign is against the Australian Consumer Law, even for sale items, while change of mind returns are at the business's discretion. If a shop offers change of mind returns, it must honour its own policy.
The law in the United Kingdom
For online, phone and mail order sales, customers usually have a right to cancel within 14 days of receiving goods and a further 14 days to return them, and the shop must refund within 14 days of getting the goods back, without deducting fees unless the item was used or damaged. Faulty goods are covered by the Consumer Rights Act 2015, which gives a short term right to reject. GOV.UK states it is illegal to restrict customers' rights or mislead them, for example with a sign saying returns are not accepted.
Common mistakes
Copying a policy from an overseas shop is the classic mistake, because the rules differ by country. Others include saying no refunds on sale items, refusing refunds without original packaging when an item is faulty, offering store credit only for faulty goods, and hiding the policy in a footer nobody finds. Put a link to it at checkout and in the order confirmation.
Where it shows up in OneCraft
OneCraft never writes law or policy terms for a site. With its legal guide, the agent creates privacy and terms pages, and a refunds page when the brief has one, using the owner's own text word for word; with no text, the page says the policy is being prepared and gives the business name and contact email. When the site takes payments through Stripe Checkout, refunds are made in the owner's Stripe dashboard and a full refund marks the order refunded.
Questions people ask
Do I have to offer refunds for change of mind?
In Australia, no; it is up to the business, but if you advertise a change of mind policy you must honour it. In the UK, most online sales carry a legal 14 day cancellation right, with exceptions such as personalised or perishable goods. Check the rules for every country you sell into.
Can I charge a restocking fee?
For change of mind returns that you offer voluntarily in Australia, you can set conditions such as a fee, as long as they are clear before purchase. You cannot charge one for a faulty item covered by the consumer guarantees. In the UK, refunds after a distance sale cancellation generally cannot have fees deducted unless the item was used or damaged.
Can I give store credit instead of a refund?
For a change of mind return, yes, if your policy says so. For a faulty item with a major failure, the customer can insist on a refund rather than credit. Make the policy wording reflect the difference, so customers are not misled about what they are entitled to.
Where should a refund policy appear on a website?
On its own page, linked from the footer, the product pages or checkout, and the order confirmation email. UK rules on distance selling expect key information, including cancellation rights, to be given before the customer buys, and a visible policy also reduces chargebacks from confused customers.
How long should refunds take?
As short as your payment provider allows, and no longer than any legal deadline, such as 14 days after receiving returned goods for UK distance sales. State the time in the policy, and tell customers that their bank may take a few more days to show the refund on their statement.
Make one with websites
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Written and checked by the OneCraft team. Last checked .