The Online Business Guide to Issuing a Refund

Due to the growing number of e-stores, more and more people buy various goods on the Web. However, there are some legal and branding considerations that their owners need to take into account, such as allowing refunds. In the digital environment, things are a bit different from the offline market. Therefore, the owners of online commercial ventures should analyze customers’ rights and legal demands, so as to employ customer-friendly rules. This guide will help you understand those rules in a better way.

Leave no room for ambiguity

First of all, you should take the online trade as serious as possible, from the very first product you sell via the Web. In order to establish and retain a straightforward selling policy, you should make a great effort in presenting your goods. Here are a few practical tips on that account:

  • Take realistic photos – Your customers will have a better insight into your stock if you offer them realistic photos. In line with that, every product you sell needs to be shown with several photos, from different angles. When you invest more time and energy in product photography, it’s less probable that your customers won’t like the items they purchase from you. Hence, you’ll face fewer refund demands.
  • Offer detailed descriptions – Apart from product photos, your customers will draw conclusions about your products from your descriptions. On the one hand, you need to write product descriptions that sell. On the other, you don’t want to sound too “salesy”, because that might repent your buyers. So, what you should do is heap praises on your products, but keep the tone neutral and pleasant for reading.
  • Invest in packaging – No matter if you do it inside the business or outsource the packaging, make sure it’s a first-class service. Fragile objects have to be properly insulated. Moreover, sending valuable goods requires special shipping conditions. Also, make sure you choose reliable suppliers, both remote and local, so as to prevent any losses on that end. The more you spend here, the less you’ll spend on paying refunds for broken or stolen items.

Give advantage to the local law

No matter what original and brilliant guidelines you might come up with, always stay within the boundaries of the local law. Also, the rules regarding digital shopping and refunds may vary significantly from state to state, let alone from country to country.

Therefore, study the law related to your e-store before you start selling items online. If you don’t have enough time to analyze those guidelines on your own, find a lawyer who can take the gist of the local trade law and apply it in your business.

For instance, in the USA you are obliged to make a refund for a justified complaint, although details are different from state to state.

The appendices to the UK Consumer Rights Act related to digital shopping give shoppers 30 days to return a broken item and get a refund. Still, downloaded digital content can’t be refunded, but buyers can only get a replacement.

As for the citizens of the EU, they can return any broken item during a 2-year guarantee period. Also, buyers have the right to cancel an online purchase within 14 days from the date of the purchase without giving any additional explanation.

Although some of these measures might sound too harsh, they’re beneficial for business. On the one hand, they spark competition among e-commerce entrepreneurs. On the other, they protect customers. Eventually, they’ll bring more customers and higher revenues to the e-traders who abide by these rules.

Take a complaint with ease

When you get a complaint or a refund request, take it with ease. Remember, you’re a service provider and your key objective is to satisfy every customer. If you found and run your e-store in accordance with the tricks of the trade, you’ll seldom have refund requests or complaints.

However, when such a thing happens, you should politely ask what’s wrong with the item. After that, offer the complaining party to send them a replacement free of any shipping charge. Also, think about giving them an additional product or a coupon, to ease your customer’s mind. For instance, if the customer needs the given product for work, they’ll appreciate receiving a new item more than getting a refund.

As opposed to that, if the customer expresses a desire to get a refund, agree to their request.

Finally, don’t forget to thank them for their time and apologize for any inconvenience.

Apply a quick refund policy

When it’s clear that the buyer wants only a refund, it’s important to apply a quick refund policy. The thing here is that you’re dealing with a dissatisfied customer. If you let them wait for their money, their discontentment will grow.

So, what you should do is immediately ask the customer to give you their account details. When you do that, the ball will be in their court – if they’re late with this information, they’ll get the refund later, as well.

Apart from that, you can also think about using refund automation on your e-commerce website. That way, the refund payment will be automatically made to the customer’s account upon their request.

Additionally, you might need to send a credit note to the buyer, to inform them about that payment. Check the local trade administration or the tax authorities if you’re obliged to send that document in your area.

Avoid arguing – save the brand

Accepting to replace a broken item or give a refund is the prerequisite to establishing a lucrative digital business. If you show your customers that you’re fully aware of the fact that you need them and not vice versa, you’ll earn their respect. And gaining respect from more customers means building a successful brand.

In line with that, your buyers will spread the word about your customer-friendly policy around the Web. As a result, you’ll get a great promotion without spending a fortune on expensive marketing campaigns. What you’ll spend is just the money for the refund.

Contrary to that, arguing with your customers about a refund or refusing to give one will most certainly earn you a bad reputation. Consequently, it will damage your reputation and put your business success at risk.


Today you can launch an online business quite fast. However, building an online brand is a long process, especially in e-commerce. Therefore, you need to work hard to retain every customer. Accepting requests for refunds is the best way to keep your customers loyal to your business. So, study the local law regarding digital shopping and apply those rules to your business. As a result, you’ll run a successful business with devoted customers.

Mark Thomasson
Mark is a biz-dev hero at Invoicebus - a simple invoicing service that gets your invoices paid faster. He passionately blogs on topics that help small biz owners succeed in their business. He is also a lifelong learner who practices mindfulness and enjoys long walks in nature more than anything else.
Let's be inbox friends!

Let's be inbox friends!

Drop us your email to receive a weekly digest of our latest blog posts right in your inbox.

To confirm your subscription, please check your email.