US Refund / Return Policy — Drafting Reference

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Drafting reference for US refund and return policies — no federal right of return, FTC Cooling-Off Rule, Magnuson-Moss, ROSCA auto-renewal, California ARL.

The United States, unlike the European Union, provides no federal default right of return for consumer purchases. There is no analogue to the EU Consumer Rights Directive’s 14-day cooling-off period for distance and off-premises contracts. Each US merchant sets its own refund and return policy, subject to four federal regulatory layers and a patchwork of state disclosure statutes: the FTC Cooling-Off Rule for door-to-door sales, the FTC Mail Order Rule for delayed shipment, the Magnuson-Moss Warranty Act for written consumer warranties, and — most consequential for online subscription businesses — ROSCA / the FTC Click-to-Cancel Rule for negative-option marketing. Several state statutes layer additional requirements, principally on auto-renewal disclosure and post-conspicuous return-policy display. This page is the drafting reference for the consumer refund and return policy; see also /handbook/us/consumer/terms-of-service/ for the companion contractual document.

Applicable Law

FTC Cooling-Off Rule. 16 CFR Part 429 — “Trade Regulation Rule Concerning Cooling-Off Period for Sales Made at Homes or at Certain Other Locations” — gives the consumer a three-business-day right of cancellation for any sale of $25 or more (or $130 or more if the sale is at the buyer’s home) made at a location other than the seller’s principal place of business. The rule applies to door-to-door sales, sales at temporary locations (rented hotel meeting rooms, fairgrounds, public-facility kiosks), and similar off-premises sales. The seller must: orally inform the buyer of the right to cancel; furnish two copies of a written notice of cancellation in the language used for the sales pitch; honour a cancellation made by midnight of the third business day. The rule does not apply to internet, mail, or telephone sales, to real-estate, insurance, or securities transactions, or to sales made entirely at the seller’s principal place of business.

FTC Mail, Internet, or Telephone Order Merchandise Rule (MITOR). 16 CFR Part 435 requires sellers of merchandise ordered by mail, internet, or telephone to ship within the time stated in the offer or, if no time is stated, within thirty days of receipt of a properly-completed order. If the seller cannot ship within that time, the seller must provide an option-notice giving the consumer the option to consent to delayed shipment or to cancel and receive a prompt refund. Subsequent delays require additional consent. The rule is the substantive basis for refund obligations in the e-commerce context — if the seller cannot deliver and the consumer does not consent to further delay, refund is mandatory.

Magnuson-Moss Warranty Act. 15 USC §§ 2301-2312 governs written warranties on consumer products costing more than $5 ($10 for additional rules). Where a written warranty is offered, the seller must designate it conspicuously as either “Full” or “Limited”; “Full” warranties carry a set of statutory minimum standards (free remedy of defects within a reasonable time; election of refund or replacement after reasonable number of repair attempts; no time-limit on duration of implied warranties). Where any written or service-contract warranty is offered on a consumer product, implied warranties may not be disclaimed and may not be limited to a duration shorter than the duration of the written warranty (15 USC § 2308). Pre-sale availability of the warranty terms is required for products costing more than $15 (16 CFR Part 702). Magnuson-Moss does not apply to most online services, which are not “consumer products”; it does apply to physical goods sold online.

UCC Article 2 implied warranties. Where the transaction is a sale of goods, UCC Article 2 supplies the gap-fillers — implied warranty of merchantability (UCC § 2-314) and, where the seller knows of a particular purpose, implied warranty of fitness for that purpose (UCC § 2-315). Disclaimer is permitted but requires conspicuous “AS IS” or specific language (UCC § 2-316). See /handbook/us/foundation/ucc-article-2/ for the full architecture.

Restore Online Shoppers’ Confidence Act (ROSCA). 15 USC § 8401 et seq. governs negative-option marketing on the internet. The statute prohibits charging a consumer for goods or services sold in an internet transaction through a negative-option feature unless the seller: (1) clearly and conspicuously discloses all material terms of the transaction before obtaining the consumer’s billing information; (2) obtains the consumer’s express informed consent before charging; and (3) provides simple mechanisms for the consumer to stop recurring charges. ROSCA also prohibits sharing of billing information with third parties in connection with internet post-transaction marketing without express informed consent.

FTC Negative Option / “Click-to-Cancel” Rule. 16 CFR Part 425 — adopted by the FTC in October 2024 and partially stayed in litigation — applies to all negative-option marketing across all media (not just internet). The rule requires: (1) clear and conspicuous disclosure of all material terms before the consumer pays; (2) express informed consent obtained separately from any other portion of the transaction; (3) same-mechanism cancellation — the consumer must be able to cancel through the same medium used to sign up (a consumer who signed up online must be able to cancel online without speaking to a representative, navigating a retention queue, or completing multiple steps not required for sign-up); (4) annual renewal reminders for free-trial conversions and offers exceeding one year; (5) misrepresentation prohibitions. As of mid-2026 portions of the rule are subject to ongoing litigation (industry challenges in the Fifth and Sixth Circuits); the same-mechanism cancellation requirement has been the focal point.

California Automatic Renewal Law. Cal. Bus. & Prof. Code § 17600 et seq. — the most-litigated state ARL — requires: (1) clear and conspicuous disclosure of the auto-renewal terms (renewal frequency, charge amount, cancellation method) in visual proximity to the request for consent, in a manner distinct from any other terms; (2) affirmative consent before the consumer is charged; (3) acknowledgement after the transaction by email or other receipt that includes the auto-renewal terms; (4) easy cancellation — for online purchases, the consumer must be able to cancel exclusively online (Cal. B&P § 17602(c) added 2018, expanded 2022 by SB 313); (5) for free-trial offers more than 31 days, additional notice 3-21 days before automatic conversion to paid; (6) for annual or longer renewals, a renewal reminder 15-45 days before each renewal. Civil penalties under California’s UCL (B&P § 17200) and CLRA (Civ. Code § 1750) — up to $2,500 per violation and statutory damages of $1,000 per consumer for CLRA — plus rolling treble-damages exposure. Private right of action available under the CLRA.

New York General Business Law § 527-a. N.Y. Gen. Bus. Law § 527-a — clear and conspicuous disclosure of auto-renewal terms, affirmative consent, post-transaction acknowledgement, simple cancellation mechanism. Renewal reminders for terms longer than one year. NY AG enforcement; private right of action.

Other state ARLs. Vermont (9 V.S.A. § 2454a), Connecticut, Illinois, Oregon, Washington, Tennessee, Virginia, Florida, Hawaii, North Carolina, North Dakota, New Mexico, Maine, Wyoming — each has its own auto-renewal statute with state-specific variations.

State return-policy disclosure laws. California Civ. Code § 1723 requires retailers (over $50 transaction or any transaction at retail) to either post a conspicuous return policy or default to a “satisfaction guarantee” (full cash refund within 7 days). New York Gen. Bus. Law § 218-a requires in-store posting of the refund policy. Massachusetts (Ch. 93, § 48), Florida (Stat. § 501.142), Virginia (Code § 59.1-200), Connecticut, Hawaii, Maryland, New Jersey, Ohio, and the District of Columbia all have analogous return-policy disclosure statutes. Where the policy is not properly disclosed, the consumer is generally entitled to a full refund within a default window (typically 20-30 days).

FTC Act § 5 — truth in advertising. 15 USC § 45 prohibits unfair or deceptive practices. A published refund policy that the business does not honour — or a misleading representation about refund rights — is an FTC § 5 deceptive practice and a state-UDAP violation in every state.

CARD Act — gift cards. 12 CFR § 1005.20 (Regulation E implementing the Credit CARD Act, 15 USC § 1693l-1) governs gift cards: cash value cannot expire for at least 5 years; inactivity fees prohibited within the first 12 months and limited thereafter; fees and expiration dates must be conspicuously disclosed on the card. Several states (California, Massachusetts, New Jersey) have stricter rules — California Civ. Code § 1749.5 prohibits expiration of gift-card cash value entirely.

Industry-specific overlays. Subscription services (SaaS, streaming) — ROSCA + Click-to-Cancel + state ARL. Physical-goods returns — MITOR + state return-policy disclosure. Digital products (e-books, software downloads) — common no-refund policy is generally enforceable but must be conspicuously disclosed. Gift cards — CARD Act. Telemedicine — state-specific refund obligations where the service is not delivered.

Form Requirements

The refund and return policy must be published electronically and made accessible from every page of the website where the consumer can complete a purchase. The standard implementation is a dedicated /returns, /refunds, or /refund-policy page linked from the page footer, from the checkout page (in compliance with the California ARL “visual proximity” rule), and from any subscription-management screen.

The policy must be presented before the consumer is charged. The California ARL “visual proximity” rule has been the most-litigated form requirement: in Mayron v. Google LLC (Cal. App. 2020) and dozens of follow-on California class actions, courts have invalidated auto-renewal consents where the auto-renewal terms appeared in a privacy policy, terms of service, or footer rather than immediately adjacent to the consent button. The compliant pattern is the auto-renewal terms presented in a labelled box immediately above or beside the “Subscribe” or “Continue” button, in visually-distinguished type, with separate affirmative consent (typically a checkbox or click-through acknowledging the auto-renewal terms specifically).

Post-transaction acknowledgement is also required by the California ARL and several other state ARLs. The compliant pattern is an order-confirmation email that includes the auto-renewal terms (renewal frequency, charge amount, cancellation method, next renewal date) in a clear, retainable format.

The FTC Click-to-Cancel Rule’s same-mechanism cancellation requirement has been the most operationally burdensome new requirement. For online-signup subscriptions, the cancellation mechanism must be exclusively online — no telephone call, no in-app pop-up requiring a chat with a representative, no multiple-step retention queue. The cancellation must be reachable within the same number of steps as the sign-up.

Required Policy Elements

The compositional structure below reflects market consensus for US consumer-facing online businesses. Industry-specific overlays add further sections.

Refund window. The time period during which a return or refund may be requested. For physical goods, 30 days from delivery is the de facto market standard; many retailers offer longer windows (60-90 days, or seasonal extensions). For digital products, the policy may state “no refunds” subject to applicable law. For subscriptions, the cancellation right is governed by the auto-renewal statutes rather than a refund window — cancellation prevents future charges; pro-rata refunds of pre-paid periods depend on the business’s policy and state law.

Refund method. Whether the refund is to the original payment method, to store credit, or at the consumer’s election. Original-payment-method refunds are the conservative default and avoid FTC § 5 / state-UDAP exposure; store-credit refunds may be permitted but must be conspicuously disclosed.

Restocking fees. Whether restocking fees apply, the amount or percentage, and the conditions. Several state attorneys general have targeted excessive restocking fees as unfair practices; conspicuous disclosure is essential.

Exceptions and exclusions. Categories of merchandise excluded from the return policy — typically perishables, custom or personalised items, opened software or media (where applicable), intimate apparel, hazardous materials, gift cards, final-sale items. Each exclusion must be conspicuously disclosed.

Shipping costs. Whether the consumer is responsible for return shipping costs, whether the original shipping cost is refunded, and whether the business provides prepaid return labels. For defective merchandise, the seller typically covers return shipping under both common-law and MITOR principles.

Process for initiating a return. The mechanism — webform, email, phone — for requesting a return authorisation. Where a return authorisation number (RMA) is required, the procedure for obtaining one. Required documentation (order number, reason for return, photographs of defective goods).

Subscription auto-renewal disclosure. For subscription businesses: the renewal frequency, the renewal charge amount, the cancellation method, the renewal-reminder timing (where required by state law). The auto-renewal terms must be in visual proximity to the consent button at sign-up (California) and in the post-transaction confirmation email.

Cancellation mechanism. For subscription businesses: a clear description of the same-mechanism cancellation flow (online sign-up → online cancellation). The cancellation should be reachable from the account-management page within the same number of steps as sign-up.

Free-trial conversion notice. Where the subscription includes a free trial of more than 31 days (California) or where the FTC Click-to-Cancel Rule applies: notice 3-21 days before automatic conversion to paid, with the renewal terms and cancellation method.

Renewal reminder for annual subscriptions. Where the subscription term is annual or longer: a renewal reminder 15-45 days before each renewal (California requirement; analogous in NY, IL, OR, others).

Defective merchandise / warranty interaction. Where the merchandise is defective, the interaction between the return policy and any written warranty under Magnuson-Moss. The return policy should not purport to limit warranty rights.

Gift returns. Whether merchandise received as a gift may be returned by the recipient, the form of refund (store credit to the recipient), and any documentation required.

Contact information. Email, telephone, postal address for refund-related inquiries.

Last-updated date. The date of the most recent update to the refund policy.

Forbidden Patterns

Pre-checked auto-renewal consent. ROSCA, the FTC Click-to-Cancel Rule, and the California ARL each require affirmative, conspicuous consent to recurring charges. Pre-checked boxes or buried disclosure violate the rules. FTC penalties under § 5 / ROSCA up to $51,744 per violation; California civil penalties under the UCL and CLRA.

“Dark pattern” cancellation flow. Multi-step retention queues, mandatory representative calls, “Are you sure?” prompts requiring repeated clicks, hidden cancel buttons — all violate the FTC Click-to-Cancel Rule’s same-mechanism cancellation requirement. FTC has brought enforcement actions in FTC v. Amazon Prime (FTC v. Amazon.com, Inc., W.D. Wash. 2023), FTC v. Vonage ($100M, 2022), FTC v. WW International (Weight Watchers) (2022).

“All sales final” without disclosure at the point of sale. Where California Civ. Code § 1723 or analogous state statutes apply, failure to conspicuously post a return policy at the point of sale defaults to a satisfaction-guarantee right.

Auto-renewal terms in privacy policy or footer only. California ARL “visual proximity” rule requires the auto-renewal terms in immediate proximity to the consent button. Mayron v. Google and follow-on cases have invalidated consents where the disclosure was only in linked terms.

Misrepresentation of refund policy. Stating “30-day money-back guarantee” in advertising while operationally refusing refunds, or imposing undisclosed restrictions, is an FTC § 5 deceptive practice and a state-UDAP violation in every state.

Free-trial automatic conversion without notice. California requires notice 3-21 days before conversion of a free trial longer than 31 days. The FTC Click-to-Cancel Rule extends this to most free trials. Charging the consumer at conversion without notice is per-se non-compliant.

Gift-card cash-value expiration within 5 years. CARD Act 12 CFR § 1005.20 prohibits cash-value expiration within 5 years. California Civ. Code § 1749.5 prohibits cash-value expiration entirely.

Sample Refund-Policy Structure

  1. Return and refund window. Time period + clock-start (delivery vs. order).
  2. What you can return. Eligible merchandise + exceptions list.
  3. Condition of returned merchandise. Unused, original packaging, tags attached.
  4. How to start a return. RMA process + required documentation.
  5. Return shipping. Who pays + label provision + tracking.
  6. Refund method and timing. Original payment method, processing window.
  7. Restocking fees. Amount and conditions.
  8. Defective merchandise. Different process + warranty interaction.
  9. Subscriptions and auto-renewal. Disclosure + cancellation mechanism + state ARL compliance.
  10. Gift returns. Recipient process + store credit.
  11. Gift cards. CARD Act + state-law compliance.
  12. Contact us. Email + phone + address.
  13. Last updated. Date.

Bibliography

Cross-references

Disclaimer: Handbook content is informational, not legal advice. The FTC Click-to-Cancel Rule remains in litigation as of mid-2026, and state auto-renewal statutes continue to evolve. Always consult licensed US consumer-protection counsel for binding decisions about your specific refund and subscription practices. Last verified 2026-05-10.