Refund policy template (for products and services)

Short answer: a refund policy says when a customer gets money back, how long it takes, and how refunds work differently for physical products, services, and digital goods, since each has its own practical rules. If you sell physical products that customers send back, start with our return policy template instead, since that covers the return process itself. This page focuses on refunds for services, digital products, and cases where nothing gets physically returned.

Facts last checked on October 19, 2026, against the sources linked below.

How a refund policy differs from a return policy

These overlap but aren't the same thing:

• A return policy covers sending a physical item back: the window, condition, who pays shipping, and what the customer gets (refund, exchange, or credit). See our return policy template for that.
• A refund policy covers the money side of a cancellation or problem: when you'll actually refund someone, through what method, and how long it takes, including cases with no item to send back at all, like a service, a subscription, or a digital download.

Many small stores only need a return policy, since most of what they sell is physical and returned the normal way. You need a dedicated refund policy once you sell services, bookings, digital products, or anything with its own cancellation rules.

Copy-paste refund policy template

Fill in the highlighted parts with your own numbers and rules.

Refunds for services and bookings

Service refunds usually depend on timing: the closer the cancellation is to the appointment, the smaller the refund, since you've likely turned away other bookings for that slot. A common structure is a full refund outside a set window (24 to 72 hours), a partial refund inside it, and no refund for a no-show. Say your exact windows and percentages plainly, since "reasonable notice" means something different to every customer.

Refunds for digital products and downloads

Digital goods raise a problem physical returns don't: once downloaded, there's no way to "return" the file. Most stores handle this by only refunding digital purchases when something's actually wrong (the file is corrupt, missing content, or not what was described), not for a change of mind. State this plainly on the product page itself, since shoppers used to physical-store return rules may assume the same applies here.

Why there's no single federal US refund law

There's no general US federal law that forces a store to give refunds just because a customer changed their mind, for goods, services, or digital products. One narrow federal rule, the FTC's Mail, Internet, or Telephone Order Merchandise Rule, requires a refund when a seller can't ship a physical order on time and the customer doesn't agree to wait, but the FTC's own guidance says this rule doesn't cover services. FTC

That gap is exactly why you need your own written refund rules for services and digital goods: there's no federal default to fall back on, so your policy is what actually governs the refund. This isn't legal advice, and some US states add their own rules on top, so check your state's requirements too.

Where to put your refund policy

1. Your site footer, next to your return and shipping policies.
2. Service booking and checkout pages, as a short line about your cancellation window.
3. Product pages for digital goods, stating plainly that downloads aren't refundable except when faulty.

On Shopify, refund terms are usually written into the same policy as your returns, under Settings > Policies. Shopify Help Center

Once your refund rules are written down, a chatbot like Chatbait can answer "can I get a refund on this?" straight from your policy, whether the question is about a product, a booking, or a download.

Frequently asked questions

What's the difference between a refund policy and a return policy?

A return policy covers sending a physical item back. A refund policy covers when and how you actually get money back, including cases with nothing to return, like services and digital products.

Do I have to refund digital products?

Not for a simple change of mind, in most cases, since there's no general law requiring it. Most stores only refund digital purchases when the file is faulty, missing, or not as described, and say so clearly on the product page.

How should I handle refunds for canceled bookings?

Set a clear cancellation window (for example, 48 hours before the appointment) with a full refund outside it and a partial or no refund inside it, so customers know the rule before they book.

Is there a US law requiring refunds?

No general one. The FTC's Mail, Internet, or Telephone Order Merchandise Rule requires a refund when a physical order can't ship on time and the customer doesn't agree to wait, but it doesn't cover services, and there's no equivalent federal rule for digital goods.

Can I offer store credit instead of a cash refund?

Yes, as long as you say so in your policy before the customer buys. Many stores offer the customer a choice between a refund and store credit.