What should a refund policy for a small service business include?

The time window and what starts it, what is not refundable, how to cancel, who can approve a refund or an exception, and how and when money is paid back.

Who should be allowed to approve a refund?

Set an amount below which anyone on the team can say yes, and name one person for anything above it, so a customer never gets two different answers.

Should my team promise refunds to customers?

Only up to the limit you wrote down. A promise that costs money, made without a written rule, is the kind of answer to check before it goes out.

Refund and cancellation policy template

Refund questions are the ones teams ask the founder most, because a wrong yes costs money. Write the rule once, say who can make an exception, and let your team check before they promise anything.

A template with blanks, not legal advice. Rules on pay, leave and data vary by state, so check yours.

The template

When a customer can get a refund

Full refund if the customer asks within [number] days of [the invoice / the first session / the delivery].
After [number] days: [credit toward the next project / partial refund of [percent] / no refund], because [reason].
Not refundable: [work already delivered / third-party costs / custom work after approval].

Cancellations

The customer can cancel [any time / with [number] days notice / before the work starts] by [email, form or message] to [place].
If they cancel after work has started, we charge for [work done so far / the stage reached].

Who can say yes

Anyone on the team can approve a refund up to [amount]. Above that, ask [person] first.
Exceptions to this policy are decided by [person] and written down with the reason and the date.

How a refund is paid

Refunds go back to the original payment method within [number] business days, by [person or tool].
Tell the customer the date to expect it, in writing.

Who owns this policy

Owner: [name]. Last confirmed: [date]. Check again by: [date].

The ten questions your team will ask

Write each answer once, with an owner and the date you last confirmed it. These ten answers are what a bot or a shared FAQ should answer from.

1.How long does a customer have to ask for a refund?
Answer: [The number of days and what the clock starts from.]
Owner: [name]. Last confirmed: [date].
2.Can I promise this customer a full refund?
Answer: [Who may say yes, up to what amount, and who decides above it.]
Owner: [name]. Last confirmed: [date].
3.What if they ask after the refund window?
Answer: [Your rule, for example credit instead of money, and who can make an exception.]
Owner: [name]. Last confirmed: [date].
4.What is not refundable?
Answer: [A short list, so nobody has to guess.]
Owner: [name]. Last confirmed: [date].
5.Can a customer cancel, and how?
Answer: [The notice, the channel and what happens to work already done.]
Owner: [name]. Last confirmed: [date].
6.What do we charge if they cancel halfway?
Answer: [How you count work done so far.]
Owner: [name]. Last confirmed: [date].
7.When will the customer get the money back?
Answer: [Business days, the payment method and who sends it.]
Owner: [name]. Last confirmed: [date].
8.What do I say to an angry customer who wants a refund now?
Answer: [The first reply, who to bring in, and what you must not promise.]
Owner: [name]. Last confirmed: [date].
9.Do we refund a customer who got what we delivered but changed their mind?
Answer: [Your rule on change of mind, stated plainly.]
Owner: [name]. Last confirmed: [date].
10.Where do I write down an exception?
Answer: [The place, and what to include: customer, reason, date, who approved.]
Owner: [name]. Last confirmed: [date].

Before you publish it

Rules for refunds, cancellations and automatic renewals differ by state and by the kind of sale, so check yours before you publish.
Match the policy to what you really do today, or your team and customers will notice.
Test your bot or FAQ with the ten questions before you rely on it.

Want to check a bot against these questions? Use the free honesty test, or turn the answers into a shareable FAQ with the team FAQ builder.

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Common questions

The time window and what starts it, what is not refundable, how to cancel, who can approve a refund or an exception, and how and when money is paid back.
Set an amount below which anyone on the team can say yes, and name one person for anything above it, so a customer never gets two different answers.
Only up to the limit you wrote down. A promise that costs money, made without a written rule, is the kind of answer to check before it goes out.