Knowledge Center

Refund Policy 101: Samples and Templates that Build Customer Trust

A retailer’s returns solution plays a significant role in the way customers perceive the brand. For example, the returns experience shapes brand perception for 68% of shoppers, while 73% say it affects their decision to buy again in the future. The bottom line? Returns are worth getting right. One important step is creating a strong refund policy that both protects your company’s finances and builds customer trust. 

Here, we’ll explore the ins and outs of refund policy making, including the information you’ll want to include. We’ll also provide real-life refund policy samples, as well as templates to help you build your own from scratch. 

What is a refund policy?

Simply put, it provides an outline of how your company handles refunds on the products that customers return. 

While there’s no law mandating that brands must have a refund policy, it’s effectively a must-have for modern ecommerce businesses. Refund policies create a set of terms that keep you and your customers on the same page when it comes to returning items. Centralizing this information in one place (typically, your refund policy page) makes it easy for customers to find the guidance they need for a streamlined, friction-free process. 

What elements should you include in a refund policy?

Although the specifics will vary somewhat from brand to brand, there are some core elements you’ll find in most refund policies across retail market segments, including:

  • How will you process and approve the return request?
  • Will you require photo submissions during the return request for proof of damage? 
  • Will your team inspect the item(s) upon receipt? If so, how long will it take for the inspection to be completed, and is the refund contingent on inspection? 
  • Who’s responsible for paying return shipping costs and any restocking fees (e.g. you or the customer)
  • Will these fees come out of the final refund amount or do they need to pay for them up front and/or separately? 
  • The way the customer will be refunded (e.g. original payment, store credit, or product replacement)
  • When the customer should expect the refund to be approved and when they should expect the refund to be posted by their payment provider. 

Transparency is critical here, and customers expect proactive communication from the moment they initiate a return to the moment they receive their payment, credit, or replacement. Not all brands are this explicit in their refund policy, but it’s definitely something you’ll want to include when creating or updating yours to give customers crystal clear instructions. 

Refund policy samples

With these guidelines in mind, let’s look at a couple of real-life brands with A+ return and refund policies. 

Refund policy example: Lululemon’s speedy refund option

Lululemon offers a unique, fast option for customers looking for a quick refund. It’s called their “Fast Track Refund” program, which certain customers may be eligible for. 

To qualify, you must be returning fewer than 3 items and dropping off the item(s) at a local FedEx or USPS. Upon scanning the item at either FedEx or USPS, Lululemon will provide a nearly instant refund via e-gift card within two hours. 


Lululemon's Fast Track refund policy example


(Editor’s note: a platform like Narvar can help a retailer enable faster refunds triggered by the carrier scan at drop-off like this and much more. For more information, schedule a demo with one of our experts.) 

Refund policy example: American Eagle’s crystal clear communication

Another great refund policy sample is American Eagle, because it clearly explains the process and options available to consumers. Here’s an example of their instructions for returning items by mail. 

American Eagle return policy by mail example

What’s more, American Eagle gets specific about the timeline for processing the refund and initiating the refund. AE explains how long it will take for the refund to arrive back at their facility and then how long their team needs to inspect and process the refund. 

American Eagle refund policy example

Refund policy template

Want to put these best practices into action? Start by adapting the following refund policy template to your needs. We included samples from our return policy template, as well, for a full picture of the experience. 

Our refund policy

Thanks for shopping with us. If you’re not 100% satisfied with your purchase, we want to make things right. 

Eligibility 

Here’s the criteria your purchase must meet to be eligible for a refund:

  • You must have purchased the item within [X] calendar days
  • The item must be unused, in its original condition 
  • The item must be in its original packaging
  • You must be able to provide a proof of purchase
  • Final sale items are not eligible for a refund

What happens after the eligibility period?

We can’t accept returns after [X] calendar days have passed. If you try to make a return, we’ll send it back to you, and you’ll need to pay for the delivery costs. 

Returning the item

  • As long as your item meets our eligibility criteria, we’ll cover the costs of shipping your item back to us.
  • You can either drop your item off at one of our network locations or schedule a home pickup to make the return process easier.

Refund

  • You can receive your refund in one of the following ways:
  • An original payment
  • Store credit
  • Product exchange 

When to expect the refund 

If you’re sending the item back by mail, please allow 2-4 weeks for us to receive the item. Once we receive the item, it will take 3-5 days for us to process the return and initiate the refund. When the return is accepted, we will post the refund to your preferred refund method. If you paid by debit or credit card, please allow an additional 2-4 weeks for the payment to post to your account. 

If you’re returning the item in store, it will be accepted and processed instantly. This will trigger the refund to your preferred refund method. If you paid by debit or credit card, please allow an additional 2-4 weeks for the payment to post to your account.  

Contact

If you have any questions or run into any hiccups along the way, feel free to reach out to us through email, phone, or our customer contact page. 

Category

Returns

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