What You Need to Know About Consumer Return Policy Laws

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Updated October 27, 2022

What are consumer return policy laws? Some states have laws that govern the disclosure of return and refund policies. So, when you want to return an item for exchange, a refund, or store credit, the merchant has to accept the returns as stated under the consumer return policy laws. Let us discuss more on the return and refund laws.


  • Many business models allow the return of goods by customers.
  • The consumer return policy laws state that you have until the third midnight to cancel an order.
  • The merchant has no obligation under law to issue returns and refunds to a customer.

Customer Returns and Refunds Under Federal Law

Many retailers or e-commerce stores like Amazon allow returns as part of their business models. If customers decide not to receive some items, they can return the goods. Although this allowance is now a standard business practice, legally, these companies don’t need to accept returns. Instead, they can only accept returns if the goods sold are defective or there is a breakage of the sales contract. 

Insider Tip

Many retailers or e-commerce stores like Amazon allow returns as part of their business models.

Although retailers accept the return of defective items, federal law offers a window period where buyers have three days to cancel an order that costs $25 and above. The consumer return policy laws give a consumer until midnight of the third night to cancel an order and get a full refund. The rule applies to purchases from any location: home, workplace, rental facility, or any other location. This is an important policy for the consumer, especially if you look at cases like the Casper Mattress lawsuit.

Customer Returns and Refunds Under State Law

In addition to applicable federal laws, states also have consumer return and refund laws. Often, for refund policies to be valid, they need to be displayed at retail stores or e-commerce sites. In addition to the three-day rule of federal return and refund laws, consumers can rescind special sale contracts and club memberships within specific business days.

The retailer also has to clarify other fees, like restocking fees, in their policy language. Regardless of your state’s disclosure of return policies, you need to be able to request any retailer you transact with for their return policy before buying a product. You also need to check if your state’s laws apply to online sales. This is because you may be unhappy with a product that you bought because of fake eBay reviews, for example. 

Is it possible for Shops to Refuse Giving a Refund?

The power to grant returns and issue refunds is at the discretion of the merchant. No state makes it an obligation for a merchant to refund or return goods. Any company with a refund-and-return policy must display the message in their store or on their website. Currently, there are 14 states with clear return and refund policies. Check to see if your state has specific regulations on the return policy.

Insider Tip

The power to grant returns and issue refunds is at the discretion of the merchant.


What is a return & refund policy?

The Return & Refund Policy makes customers know about the timeframe, cost, and requirements for returning, exchanging, or refunding merchandise.

Is it illegal for companies not to accept returns?

Although many vendors state that the return and refund policy is good, they do not just accept returned goods. Instead, most of the time, they only accept a return of defective goods.

What are the laws on returning goods?

No law requires the retailer to give you back money if you change your mind about an item and return it to the shop without a receipt. But if you want to repair your goods, the Consumer Rights Act allows you to repair them. But, make sure you get familiar with Section 5 of the FTC Act, which prohibits unfair or deceptive acts or practices that affect commerce.

STAT: According to research by the Loss Prevention Research Council and the National Retail Federation (NRF), retailers in the U.S lose between $9.6 billion and $14.8 billion every year from return fraud. (source)

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