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Refund Policy Generator

Generate a professional refund and return policy for your Shopify, WooCommerce, or Etsy store in 60 seconds. Covers return windows, digital products, international orders, and more.

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Shopify & EU Compliant

Why Use FreeTOS for Your Refund Policy?

Just instant, professional legal documents.

Platform-Specific Language

Select Shopify, WooCommerce, or Etsy and get platform-appropriate language that matches your store's checkout flow and customer expectations.

EU 14-Day Right of Withdrawal

If you sell to EU customers, our generator automatically includes the mandatory 14-day statutory cooling-off period required by EU Consumer Rights Directive.

Digital Product Exclusions

Toggle digital product no-refund clauses, personalized item exclusions, and defective item provisions: all the nuances that protect your business.

Frequently Asked Questions

Everything you need to know about Refund Policies

Shopify strongly recommends having a refund policy and includes a dedicated page for it in their checkout settings. While not strictly mandatory on Shopify's end, major payment processors like PayPal and Stripe expect a clearly displayed refund policy.
A good refund policy should cover: return window (e.g., 30 days), acceptable condition of items, who pays return shipping, how refunds are issued (original payment or store credit), what's excluded (digital products, sale items), and the step-by-step process to initiate a return.
Yes, but with limitations. You can restrict refunds for digital products, personalized items, and perishables. However, EU consumers have a statutory 14-day right of withdrawal that cannot be waived, and some US states have minimum return window requirements for physical goods.
There is no universal requirement, but best practice is 30 days. EU law mandates a minimum 14-day cooling-off period for online purchases. Shopify's default template is 30 days and consumer protection laws across most jurisdictions expect a reasonable return window.
Digital products such as ebooks, software, and online courses can typically be marked as non-refundable once downloaded or accessed. You should clearly state this before purchase. EU consumers retain certain rights even for digital goods, so clear disclosure is essential.

Further Reading

Go deeper on this topic with our guide.

Blog Post
Shopify Legal Pages: The Complete Guide (Privacy Policy, ToS, Refund Policy)
Every legal page a Shopify store needs, what each one must include, and why Shopify Payments will hold your funds without them.

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Why a Refund Policy Actually Matters

It's not just about being nice to customers. Your payment processor and your bank account depend on it.

Most e-commerce businesses think of a refund policy as customer service documentation. It's that, sure. But it's also a financial protection mechanism, a legal requirement in many jurisdictions, and a requirement for keeping your payment processing accounts in good standing. A missing or bad refund policy can cost you in ways that have nothing to do with actual refunds.

Chargebacks are expensive and they add up fast.

Every chargeback costs you between $15 and $100 in fees depending on your payment processor. Stripe charges $15 per dispute. PayPal charges $20. But the bigger problem is your chargeback ratio. If your dispute rate exceeds 1% of transactions, Visa and Mastercard place you on a monitoring program. Exceed their thresholds long enough and your payment processing account gets terminated. A clear refund policy that customers can actually find and understand is one of the most effective ways to prevent chargebacks.

On the legal side, the EU's Consumer Rights Directive gives online shoppers an unconditional 14-day right of withdrawal on most purchases. You cannot contract out of this. If an EU customer asks for a refund within 14 days of receiving a physical product, you must give it, full stop. In the US, the FTC has rules about mail and telephone order merchandise that require you to ship within the time you advertised, notify customers of delays, and offer refunds when you can't fulfill. Many individual states also have their own minimum return requirements.

Then there are the platform requirements. Shopify Payments requires merchants to have a refund policy. PayPal's seller protection program requires one. If you want to run ads on Google Shopping, your store needs a visible return policy. Amazon requires it for third-party sellers. And when customers can't find your refund policy, their first instinct isn't to email you. It's to call their bank and file a dispute. Every chargeback you prevent with a clear, findable refund policy is $15 to $100 saved.

A good refund policy actually increases conversion rates. Studies by the Wharton School and several e-commerce analytics firms consistently show that a clear, generous return policy increases purchase confidence, especially for first-time customers. Free returns and long windows correlate with higher average order values. Being upfront about what happens if something goes wrong makes people more willing to risk buying in the first place.

Who Needs One

Any e-commerce store, SaaS product, digital download seller, or service provider who accepts payment online. If you take money, you need a refund policy.

Without One

Higher chargeback rates, payment processor account risk, EU consumer law violations, lost Google Shopping eligibility, and customers who can't find your policy and file disputes instead of emailing you.

With a Good One

Fewer chargebacks, higher conversion rates, payment processor compliance, and customers who trust you enough to complete their first purchase.

What's Included in Your Generated Refund Policy

Every clause your store needs, from eligibility windows to non-refundable items.

Return Eligibility Window

Your return window (30, 60, or 90 days from delivery), clearly stated so customers know exactly how long they have to initiate a return.

Condition Requirements

Items must be unused, in original packaging, with tags attached (where applicable). Clear condition requirements prevent disputes about whether a return qualifies.

Digital Products Handling

Specific rules for ebooks, software licenses, online courses, and downloadable files, including when refunds are available and when they aren't once access has been granted.

How to Initiate a Return

Step-by-step instructions for starting a return: contact method, what information to include, and what the customer should expect to happen next.

Refund Timeline

How long refunds take to process (typically 3 to 10 business days after receiving the return), and how the refund is issued: original payment method, store credit, or check.

Exchange Options

If you offer exchanges in addition to refunds, this section explains the process, including how size or color swaps work and whether exchanges are free or involve additional shipping costs.

Non-Refundable Items

Specific categories that can't be returned: perishables, personalized items, intimate apparel, hazardous materials, and items marked final sale at time of purchase.

Sale Item Policy

Whether sale or clearance items are eligible for refunds or exchanges. Most stores make sale items final sale, and this section makes that clear before purchase.

Return Shipping Costs

Who pays for return shipping: customer-paid, prepaid label provided, or free returns. For defective or incorrect items, the policy clarifies you cover return shipping regardless.

More Refund Policy Questions

The questions e-commerce store owners actually ask

30 days is the industry standard and what most customers expect. It's also what Shopify's default template uses. EU law requires a minimum 14-day right of withdrawal, so 30 days comfortably covers that and still feels reasonable to customers. Some stores offer 60 or 90 days for a competitive advantage, especially in fashion and electronics. A longer window sounds scary but research consistently shows it doesn't increase actual return rates much, while it does increase purchase confidence.
In the EU, yes. Online customers have a 14-day right of withdrawal under the Consumer Rights Directive, with no questions asked. In the US, there's no federal law requiring refunds for physical goods, but the FTC has rules about delayed shipments and many states have their own minimum return requirements. In the UK, the Consumer Contracts Regulations give the same 14-day right as EU law. In practice, even in the US, refusing all refunds leads to chargebacks, which cost more than the refund itself, plus processor account risk.
Yes, but it's more nuanced. In the EU, digital content has a 14-day right of withdrawal unless the customer explicitly consents to immediate delivery and acknowledges they lose the withdrawal right by downloading. So if you sell ebooks or software downloads, you should show a checkbox at checkout where the customer acknowledges this. In the US, digital product refund policies are largely governed by your own stated terms, but credit card networks still allow chargebacks for "not as described" disputes regardless of your no-refund policy. Being clear and fair upfront is always cheaper than fighting disputes.
In the US, yes, restocking fees are legal as long as they're disclosed before purchase. Common restocking fees range from 10% to 25% for opened electronics or specialty items. In the EU, you can deduct from the refund if the returned item has diminished value due to handling beyond what's necessary to inspect it, but you cannot charge a flat restocking fee. The key is disclosure: your refund policy must mention the restocking fee and the percentage or calculation method clearly, and ideally this is also visible on the product page or at checkout.
A refund returns money to the customer (to original payment method or as store credit). An exchange swaps the product for a different size, color, or item of equal value. Exchanges are operationally more complex but often preferred by both stores (you keep the revenue) and customers (faster resolution). Some stores offer exchanges only, not refunds, for certain product categories. EU law requires that you offer a refund as one of the options for faulty goods, so you can't limit customers to exchanges only when a product is defective.
On Shopify: go to the order in Admin, click Refund, select full or partial refund, and Shopify processes it back to the original payment method automatically if you use Shopify Payments. For exchanges, you can create a new order and cancel the original. On WooCommerce: go to the order in Admin, click Refund, enter the amount, and process. WooCommerce will refund through your payment gateway automatically for most processors. For both platforms, document your refund in the order notes so you have a clear paper trail if a chargeback is filed later.
This happens more than it should. When it does, respond to the chargeback with evidence: your refund policy, proof of delivery, order confirmation, and any communication showing the customer was aware of your terms. A clear refund policy that was linked at checkout is your best defense. Even if you lose the dispute, responding with evidence reduces the "fraudulent" classification, which matters for your chargeback ratio. The best prevention is having a refund policy that's easy to find, easy to read, and easy to use, so customers contact you first instead of their bank.

FreeTOS vs Paid Policy Generators

Your refund policy shouldn't cost more to generate than your first return.

Feature FreeTOS Termly TermsFeed
Price $19 a month $14/mo $9/mo
PDF Download Included Paid Paid
EU 14-Day Withdrawal Coverage Yes Yes Yes
Digital Products Clause Yes Yes Yes
Non-Refundable Items Section Yes Yes Yes
AI-Tailored Output Yes Template Template

How to Add Your Refund Policy to Your Store

Where it needs to go, and how to make sure customers actually see it before they buy.

Shopify

  1. Go to Settings, then Policies in Shopify Admin
  2. Paste your refund policy into the Refund Policy field
  3. Shopify automatically adds it to your checkout page
  4. It also appears in the footer via your navigation settings
  5. To add a link on product pages, edit your product page template to include a "Return Policy" accordion or link
  6. Test at checkout to confirm the link appears and works

WooCommerce

  1. Create a new WordPress page titled "Refund Policy" or "Returns and Refunds"
  2. Paste the HTML in the HTML editor and publish
  3. Go to WooCommerce, then Settings, then Advanced
  4. Set the Refund and Returns Policy Page to your new page
  5. WooCommerce will link it automatically in the checkout footer
  6. Also add it to your main footer menu under Appearance, then Menus

Best Placement Practices

  1. Footer link on every page (most important)
  2. Checkout page, near the place order button
  3. Order confirmation email, as a link
  4. Product pages, especially for high-value items
  5. Your FAQ page if you have one
  6. Packing slip or delivery email for physical orders
Chargeback defense tip: When a customer places an order, your checkout should require them to have seen your refund policy. The most defensible setup is a checkbox at checkout: "I have read and agree to the Refund Policy" with a direct link. Stripe, PayPal, and card network dispute resolution all look favorably on merchants who can show the customer explicitly acknowledged the policy at time of purchase. This single step can turn a losing chargeback dispute into a winning one.

Why Every Online Store Needs a Refund Policy

Legal requirements, platform mandates, and the business case: all three reasons point the same direction.

Consumer protection laws in most jurisdictions require you to honor some form of returns process for online purchases. The EU's Consumer Rights Directive gives shoppers an unconditional 14-day right of withdrawal on all online purchases regardless of what your store policy says. You cannot contract out of this statutory right. If an EU customer buys from your store and asks for a refund within 14 days of delivery, you must give it, and you must disclose this right clearly in your policy or face separate fines for the non-disclosure alone.

Platform requirements make a refund policy non-optional if you want to stay in business. Shopify's Terms of Service require merchants to have a refund policy. It is a condition of using Shopify Payments, and if you want your policy to appear at checkout (which it should), you configure it under Settings then Policies in your admin. PayPal's seller protection program requires a clearly posted return policy. Stripe recommends one and may flag accounts with high dispute rates that could be solved by clearer policy disclosures. Google Shopping requires merchants to have a visible return policy to run product listing ads. The more platforms you use, the more mandatory a refund policy becomes.

The business case is even more direct: chargebacks are expensive and preventable. Every chargeback costs you the product, the sale, and a dispute fee ranging from $15 to $35 depending on your processor. Stripe charges $15 per dispute. PayPal charges $20. Worse, if your chargeback ratio exceeds 1% of transactions, Visa and Mastercard place you in a monitoring program, and sustained high rates can get your processing account terminated. The most common chargeback reason code is effectively "I didn't know I couldn't return it." A clear, visible refund policy that customers can find and read before they buy eliminates most of those disputes.

Who Needs One

Any e-commerce store, digital product seller, subscription service, or marketplace seller. If you accept online payments, your payment processor and most platforms require a published refund policy as a condition of service.

Without One

Higher chargeback rates, payment processor account risk, EU consumer law violations, disqualification from Google Shopping, and customers who file disputes rather than contacting you because they can't find your policy.

With a Clear One

Fewer chargebacks, platform compliance, higher purchase conversion rates, and customers who trust you enough to complete their first order: knowing exactly what happens if something goes wrong.

Shopify & WooCommerce Refund Policy Guide

Platform-specific steps, requirements, and considerations for the two most popular e-commerce platforms.

Shopify

  • Shopify requires a return policy displayed at checkout, configure it under Settings → Policies in your Admin
  • EU merchants must offer a minimum 14-day right of withdrawal; Shopify Payments may withhold payouts for non-compliance
  • Digital products can be designated as non-refundable but this must be stated clearly before purchase and acknowledged by the customer at checkout
  • To add your policy: Shopify Admin → Settings → Policies → paste your refund policy text → Save; Shopify automatically displays it at checkout and in your store footer

WooCommerce

  • WooCommerce has no built-in refund policy display: you must manually add a link to your footer and checkout page
  • The WooCommerce Refunds & Returns plugin can automate the customer return request process and reduce support emails
  • UK merchants are subject to Distance Selling Regulations (Consumer Contracts Regulations 2013), which require a minimum 14-day right of return
  • Australian Consumer Law grants statutory warranty rights that cannot be excluded by any store policy, regardless of what you write

What Must Your Refund Policy Include?

Nine essential elements that every store's refund and return policy needs to cover.

Return Window

How many days after purchase or delivery the customer has to initiate a return. The industry standard is 30 days. EU law requires a minimum of 14.

Condition of Returned Items

Items must be unused, unworn, and in original packaging with tags attached. Clear condition requirements prevent disputes about return eligibility.

Who Pays Return Shipping

Customer-paid, prepaid label, or free returns. For defective or incorrect items, you should cover return shipping regardless of your standard policy.

Refund Method

Whether refunds go to the original payment method, store credit, or exchange only. Customers have strong preferences here, so be explicit about what you offer.

Processing Time

When the refund will appear: typically 3 to 10 business days after you receive the return. Set realistic expectations to avoid follow-up emails and disputes.

Non-Returnable Items

Specific exclusions: perishables, personalized items, intimate apparel, hazardous materials, and items marked final sale. List these explicitly to avoid disputes.

Digital Product Policy

Whether digital downloads, ebooks, courses, or software licenses are refundable after delivery. EU customers must acknowledge loss of withdrawal right at checkout.

Defective or Damaged Items

What happens when products arrive damaged or are faulty. This should always result in a full refund or free replacement regardless of your standard return policy.

EU Withdrawal Right

If you sell to Europe, the mandatory 14-day unconditional right of withdrawal must be disclosed. Failing to disclose it extends the withdrawal period to 12 months by law.

Refund Policy FAQ

The questions store owners actually ask when setting up their refund policy

Yes. Shopify's Terms of Service require merchants to have a return and refund policy. It is displayed at checkout and linked in your store footer. You configure it under Shopify Admin → Settings → Policies. Shopify Payments specifically requires a refund policy as a condition of the payment processing service, and stores without one may have payouts withheld.
In the EU, yes: consumers have a statutory 14-day right of withdrawal for all online purchases, unconditionally. In the US, there is no federal requirement to offer refunds for physical goods, but states have their own rules: California and New York require that a no-refund policy be clearly posted before purchase, or consumers can return items within a reasonable time. In the UK, the Consumer Contracts Regulations give the same 14-day right as EU law. In practice, even in jurisdictions with no legal requirement, refusing all refunds leads to chargebacks, which cost more than the refund.
Yes for most products, but with important limits. EU consumers always get 14 days on physical goods regardless of your stated policy. Digital products can be non-refundable only if the customer explicitly consents to immediate delivery and acknowledges they waive their withdrawal right at checkout. Defective or misdescribed products must be refunded regardless of any no-refund policy: this is a consumer protection right that cannot be contracted away in most jurisdictions.
A return policy covers the process of getting items back to the seller: how to initiate, what condition they must be in, who pays shipping. A refund policy covers what money is returned: how much, to what method, and on what timeline. Most stores combine them into one "Refund and Returns Policy" document, which is the format our generator produces. Keeping them separate only makes sense if your return process is complex enough to warrant its own documentation.
Create a WordPress page (e.g., /refund-policy), paste your policy content and publish. Then go to WooCommerce → Settings → Advanced and set the Refund and Returns Policy Page to your new page. WooCommerce will link it in the checkout footer automatically. Also add it to your main footer menu under Appearance → Menus. For an automated return request system, consider a plugin like WooCommerce Refunds and Returns which adds a customer-facing request form.

FreeTOS vs Other Options

How generating your refund policy with FreeTOS compares to the alternatives.

Feature FreeTOS Write It Yourself Shopify Built-in
Quality AI-customized Template Very generic
Customized to Your Store Yes Depends on effort Basic only
EU 14-Day Withdrawal Coverage Yes If you know to add it Partial
Digital Products Clause Yes If you remember No
Download (HTML / PDF / TXT) HTML / PDF / TXT Manual Not directly