E-Commerce Merchant Account Rules for Returns and Refunds

E-commerce merchant account users are responsible for setting up their merchandise return and refund (credit) policies. Clear and straightforward disclosure of these policies can assist you avoid misunderstandings and possible cardholder disputes. The credit card companies and Associations will endorse your policies, as long as they are properly disclosed to consumers prior to the completion of a transaction.

If you don't know what the proper way to disclose your return and refund policies is, contact your processing bank for further information.

For face-to-face transactions, Visa and MasterCard acknowledge that adequate disclosure has been given before a payment is completed if the following (or similar) statements are clearly printed on the front of the transaction receipt, around the customer signature line. Following is a list of the accepted disclosure statements and a brief explanation for each of them:

• No refunds, returns, or exchanges - this means that your business does not issue credits / refunds and does not accept returned items or merchandise exchanges.
• Exchange only - your business agrees to exchange returned items for similar products that are equal in price to the amount of the original sale.
• In-store credit only - your organization accepts returned items and gives the customer a store credit for the amount of the original sale.
• Special circumstances - your organization and the consumer have agreed to special sale terms (for example late delivery fees or restocking charges). The agreed-on terms need to be written on the sales receipt or a similar document (e.g., an invoice). The customer's signature on the receipt or invoice proves acceptance of the agreed-on sale terms.
• Timeshare - your business is required to provide a full refund when a sales receipt has been issued and the customer has cancelled the transaction within 14 calendar days of the payment date.

For mail order and telephone order (MO / TO) merchants, your return and refund policies can be mailed, e-mailed, or faxed to the customer. To complete the transaction, the customer should sign and return the disclosure statement to the retailer.

For e-commerce merchant account users, your website must disclose your return and refund policy to the customer and require the latter to select a "click-to-agree" or other affirmative button to acknowledge acceptance of the policy. The terms and conditions of the sale must be clearly displayed on the same screen as the checkout information that states the total sale's amount, or within the website pages the customer accesses during the checkout process.