How to Decline Refunds by Email

How to Decline Refunds by Email

When a customer contacts you wanting a refund for a purchase, it can be an awkward experience.

This becomes especially true if you cannot issue a refund due to the condition of the returned item or your business policy on returns & refunds.

Your business needs a firm Return and Refund Policy, the means to enforce the policy, and effective strategies when communicating declined refunds to customers.

Refund Policy or Terms & Conditions

In order to decline refunds in an effective manner, you need a separate Refund Policy or clear refund conditions in your Terms & Conditions (T&C) agreement.

Otherwise, you lack the authority to decline a refund in the first place.

Clauses

When drafting a Refund Policy, consider the potential of returns to your store.

If you sell consumer goods online, it's a good idea to have a separate Refund or Return Policy to help the terms of this policy stand out.

Other business models work well with clauses for return & refunds in the Terms & Conditions agreement.

Apple iTunes offers a strict Refund Policy which it maintains in its Terms & Conditions agreement. Since iTunes digital products or services, returns are not a frequent occurrence as they are with goods. This approach is more than adequate.

But the retail branch of Apple offers a separate return policy in the support section of its web page but this policy has nothing to do with iTunes' policy.

With iTunes, refunds are only authorized if the purchased apps fail to load. The policy also explains that if fraud or abuse is suspected, the refund will not be authorized:

Apple iTunes: Return/Refund Policy: No refund if fraud or abuse

Barnes and Noble places strict deadlines on returns and refunds. For most products, that deadline requires returns to be submitted for a refund within 14 days of purpose. The products also need to be in new condition:

Barnes and Noble Return/Refund Policy: Screenshot of Conditions

Barnes & Noble is tough on this deadline. In its list of items that cannot be returned, it includes those submitted for a refund after the time limit:

Barnes and Noble: No Return or Refund if time limit passes

Amazon takes a unique approach which places refunds on sliding scale based on type of merchandise and condition. Within its extensive Return and Refund Policy, it offers this table to communicate the scale:

Amazon Return/Refund Policy: Conditions

Joann Fabric and Craft Stores is an online store as well as a brick-and-mortar store in various locations. Its Return Policy is very generous but offers flexibility in case a return just seems off:

Screenshot of conditions from Return/Refund Policy of Joann Fabric Craft

It's up to you how broad or strict you want your Return and Refund Policy. Keep in mind that the policy will be a deciding factor in whether someone will purchase from you.

Enforcement

Refund Policies need to be enforceable. If the policy is too strict, you may offer customers leniency too often.

You also have to make a policy that you're willing to exercise.

To allow for effective enforcement of your Return/Refund Policy, consider these guidelines:

  • Clear communication.

    iTunes is a good example of being clear about restrictions while also setting boundaries.

    If you have restrictions, be upfront about them. Likewise, if you want room to deny refunds while still being generous, put in a "We reserve the right" phrase like in the Joann example above.

  • Make it realistic.

    Denying all refunds and returns on sale merchandise is a reasonable policy. Many consumers expect that.

    However, if you don't allow any refunds or returns at all, it's likely you'll be appeasing many angry customers with refunds against your policy.

    Rather than take a path that compromises goodwill, create a realistic refund policy that likely enjoys consistent enforcement.

  • Create deadlines.

    A 14-day or 30-day return deadline is reasonable.

    Keeping the return deadline open-ended risks having to appease customers with refunds for obviously well-used merchandise.

If you create a clear Return/Refund Policy that you can live with and enforce consistently, declining refunds becomes easier.

How to decline a refund

The best course of action when declining refunds is to explain why.

Be concise and give specific reasons and you're less likely to lose faith or receive pushback from a customer.

Reasons for declining a refund can vary:

  • Old warranties
  • Missing the refund deadline
  • The product was part of a promotion with no refunds authorized
  • And so on.

You will want to explain these reasons and do so with courtesy.

How to decline a refund through email

Before you write an email rejecting a refund request, consider carefully how you wish to present that correspondence.

Here are some tips:

  • Use company letterhead or signatures.

    If you have a trademark email signature or letterhead, use it to appear more official.

    This will not be an informal email but one written like business correspondence.

  • Be firm and courteous.

    Start by acknowledging the refund request and your steps in determining if it was valid.

    Then explain your decision to deny the refund.

    Use active language like, "I looked into your situation and our refund policy does not allow one in this case."

    Consider indicating that you spoke to a manager to add to the authority. This also shows that you looked into this matter thoughtfully and did not reject the refund request right away.

    Investigation, even when it ends in a negative conclusion, is appreciated more than uninformed decision making.

  • Express regret but remain logical.

    There's no harm in indicating that you're sorry but the policy does not allow a refund in this matter. It shows empathy but also demonstrate that your hands are tied when it comes to the situation.

    If there's a manufacturer's policy that voids the warranty or other items out of your control, mention them too.

    You want to give specific reasons because being vague will only contribute to frustration.

  • Thank the customer.

    This may seem like an odd thing to do but appreciation can go a long way with negative news.

    Indicate that you're grateful for their patronage and you hope they will shop with you again.

    Offer a discount for their next purchase if you have the means to do so. Even a 15 percent discount can encourage forgiveness.

Before you send the email declining a refund, proofread it carefully and check to see if you missed any policy explanations.

You want your letter to be clear, well written, and contain all applicable reasons for denying the refund.

Examples

Here are a few examples on how to decline a refund through email.

Products returned outside a warranty are a frequent reasons for refund refusals. You'll likely deny these refunds because you'll not get reimbursed by a manufacturer and you don't want to absorb that cost.

For this situation, try this approach:

Example of email to decline a refund because it

Discontinued products that people attempt to return past return deadlines is also a regular occurrence.

This example will give you ideas even if the only issue with the return request was the deadline:

Example of email to decline a refund because it

When products are obviously used or have been tampered with, it suggests bad faith from the customer. It's apparent that a refund is not appropriate.

However, even in this tough situation, it's best to stick with facts and offer a full explanation:

Example of email to decline a refund because it

If the email exchange involved a particularly unruly customer, you can always suggest they talk to an attorney or a consumer agency. The above example reflects that possibility.

Remember that when you encounter difficult customers to keep a file of correspondence and policies in case they really do consult an attorney or file a consumer complaint.

It's in your best interest to create a good Refund Policy and enforce it consistently.

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Jocelyn Mackie

Former civil litigation attorney. Content legal strategist.

This article is not a substitute for professional legal advice. This article does not create an attorney-client relationship, nor is it a solicitation to offer legal advice.