Editorial · November 14, 2022
Return Policy: What Retailers Should State Clearly
Return policy rules for retailers start with one fact: no federal law tells a store it must take returns. A store can choose its own terms. The law asks only that the store state them clearly and keep to them. This guide covers what a clear policy says and what the rules ask of sellers.
What federal rules say about returns
The Federal Trade Commission (FTC) does not set a general return window. It does enforce a rule on orders placed by mail, phone or the Internet. The rule dates from 1975, and the FTC updated it in 2014 to name Internet orders.
The rule is about shipping, not about buyer's remorse. A seller must have a reasonable basis to ship within the time it states. If it states no time, it must expect to ship within 30 days. If the seller cannot ship on time, it must ask the buyer to agree to the delay. If the buyer does not agree, the seller must refund the money for the unshipped goods, without being asked.
The FTC guide for business sets a refund deadline. When a buyer paid by cash, check, money order or a card from a third party, the refund is due within seven working days after the order is cancelled. If the seller itself extended the credit, the account must be credited within one billing cycle.
What state law adds
Posting rules come mostly from the states. California is a clear example. Its Attorney General says a store that will not give a full refund, a credit or an equal exchange within seven days of purchase must show its policy plainly. The notice can sit at each register and sales counter, at the public entrances, on item tags or on order forms.
If a store does not post a limited or no-return policy, the same office says the buyer may return the item with proof of purchase for a full refund within 30 days. That rule is in California Civil Code section 1723. The page also lists items that are often exempt, such as perishables, custom orders and final-sale goods.
Other states have their own versions, so a retailer that sells across state lines should check each state where it has stores or ships goods.
Points a clear policy covers
A good policy answers the questions a shopper would ask at the register. It uses short sentences and plain words. Most clear policies cover these points:
- The window. State the number of days, and say when the clock starts: the purchase date or the delivery date.
- The condition. Say if items must be unused, unopened or in original packaging.
- Proof of purchase. Say if a receipt, order number or card is needed.
- The remedy. Say whether the buyer gets money back, store credit or an exchange.
- The exceptions. List final-sale goods, custom orders and anything that cannot be resold.
- The cost. Say who pays return shipping and whether any restocking fee applies.
Fine print is a risk. A condition buried in a footer may not count as a clear statement. Put the key terms where a buyer sees them before paying.
Where to post it
For a store with a counter, the policy belongs near the register, since that is where California asks to see it. For an online shop, link it from the product page, the cart and the checkout page. Add it to the order confirmation email as well. A shopper who can find the terms before paying has less cause for a dispute later.
Keep a dated copy of each version of the policy. If the terms change, apply the new terms only to new sales, and say so on the page. Staff should know the policy as well as the page does. A cashier who gives a different answer than the sign creates the exact problem the sign was meant to prevent.
Defects and promises are different
A no-returns sign does not cancel a seller's duty on faulty goods. The California Attorney General notes that an implied warranty exists by law even when the seller makes no specific promises. A seller who claims a "money-back guarantee" or "easy returns" in an ad must also honor it as written. Keep the ad and the policy in line.
If you change shipping times, send the notice and the refund option the FTC rule describes. Do this even when the delay is small.
A short checklist
Before the holiday shopping season, read your own policy as a shopper would. Can you find it in under a minute? Does it name the window, the condition, the remedy and the exceptions? Does it match what staff say and what ads promise? If any answer is no, fix the wording now. A few clear lines cost little and head off many complaints.
This article is general information, not legal advice. Store return rules differ by state, so confirm yours with your state attorney general or a local business lawyer.