What should a small business return policy include?

The basics: how many days customers have to return an item, what condition it must be in, what proof of purchase you accept, whether you give a refund, store credit or exchange, which items are final sale, and any fees such as a restocking fee with the exact amount. Add how to start a return and who to contact.

Do I have to give a refund if a customer changes their mind?

It depends on where you sell. In much of the US there is no general duty to refund a non-faulty item for change of mind, but some states, such as California and New York, require a clearly posted policy if you limit refunds. In the UK, in-person change of mind is up to you, but online, phone and mail order customers can usually cancel within 14 days of receiving the item. Faulty or misdescribed items are a different matter everywhere. This is general information, not legal advice.

Do I have to post my return policy?

In some places, yes. New York requires stores and online retailers to post their refund policy where buyers see it before paying. California requires a posted policy if you do not offer a full refund, credit or equal exchange for at least seven days with proof of purchase. Even where it is not required, posting it prevents most arguments at the counter.

Can I offer store credit instead of a cash refund?

Often yes, for change-of-mind returns, if you say so clearly before the sale. New York, for example, requires the posted policy to say whether refunds are cash, credit or store credit only. Store credit does not replace a customer's legal rights for faulty items in places like the UK.

Can I charge a restocking fee?

Where your local rules allow it, yes, but only if it is in the policy before the purchase. New York requires the posted policy to state any fee and its dollar or percentage amount. Never add a fee at the counter that the customer could not see when they paid.

Can GBot write my return policy or handle refunds?

GBot can draft the policy, the counter sign, the receipt line and replies to return requests in your voice, and you approve them before they go anywhere. It does not process refunds, connect to your till or card reader, or give legal advice.

Return Policy Template for Small Shops: Fill-In + Signs

The short answer: a good small shop return policy answers seven questions in plain words: how long, what condition, what proof, refund or credit, what is excluded, any fees, and how to start a return. Write it once, then post the same facts on your website, on a short sign at the counter and on the receipt. Check your local posting rules, because some places, such as California and New York, require a visible policy if you limit refunds.

This guide is for gift shops, boutiques, bookshops, florists, bakeries, makers and salons that sell retail products.

Returns are a big part of retail. The New York Division of Consumer Protection, citing the National Retail Federation, said consumers were expected to return $849.9 billion of merchandise in 2025, or 15.8% of retail sales. A clear policy will not stop returns, but it stops most arguments about them.

Decide these 7 things first

Answer these first. Every version of your policy will use the same answers.

Return window. How many days, and counted from what: the purchase date, or the delivery date for online orders. Pick a number you can keep, such as 14, 30 or 60 days.
Condition. Unused, tags on, original packaging, or "as sold".
Proof of purchase. Receipt, gift receipt, order number, or the card used to pay.
What they get back. Refund to the original payment, store credit, exchange, or a mix. Say which applies when.
Exclusions. Final sale items, personalised or custom orders, perishables such as flowers and food, opened hygiene products, gift cards.
Fees. Restocking fee or return shipping, with the exact amount. If there are none, say "no fees".
Who handles it and how. In store at the counter, by email, or by DM, and how fast you reply.

If an answer depends on the item, write a separate line for that item group rather than a vague "some exclusions apply".

Return policy template (fill-in)

Copy this, replace the brackets, delete the lines that do not apply.

Returns and refunds at [Shop name]

We want you to love what you buy. If something is not right, you can return it within [30] days of [purchase / delivery].

What we accept: items that are [unused, with tags attached, in original packaging].

What you need: your receipt, gift receipt or order number. [Without proof of purchase we can offer store credit at the current selling price.]

What you get: a refund to your original payment method [or store credit, your choice]. [Sale items: store credit or exchange only.]

Final sale (cannot be returned): [personalised and custom orders, fresh flowers and food, opened skincare and cosmetics, gift cards].

Fees: [No fees. / A restocking fee of [10%] applies to opened [electronics]. / Return shipping for online orders is [paid by you / free].]

Faulty or damaged items: tell us within [7] days and we will [repair, replace or refund] at no cost to you. This does not affect your legal rights.

How to start a return: bring the item to [address] during opening hours, or email [email] with your order number and a photo.

Questions: [phone] or [email]. A written copy of this policy is available at the counter.

The line about faulty items matters. A store credit only policy for change of mind is common, but it should never read as if a broken item gets nothing.

The short versions: counter sign and receipt line

Most customers will never open your website policy. They read the sign by the till and the bottom of the receipt. Use the same numbers as the full policy.

Counter sign (4 lines):

Returns within 30 days with receipt. Unused items with tags: refund or store credit. Sale items: exchange or store credit only. Final sale: custom orders, flowers, gift cards.

Receipt or order email line:

Returns within 30 days with this receipt. Full policy: [yourshop.com/returns] or ask at the counter.

If the sign, the receipt and the website disagree, customers will quote the most generous one. The same idea applies to prices, which is why we suggest one clear price list and a shelf price that matches the register.

Holiday gift returns (optional block)

Many shops extend the window for gifts so people can buy early. If you do, write it as a dated exception, not a vague promise:

Holiday gift returns: items bought from [1 November] to [24 December] can be returned until [15 January] with a gift receipt. Gift returns are given as store credit [or exchange].

Offer gift receipts at the till, and add this block to your holiday checklist so your website, Google profile and DM replies all say the same thing. If you are running Black Friday offers, say whether discounted items follow the same rules.

What the law says about posting a policy

Rules differ by country and state. This is a short, general summary, not legal advice. Check your own local rules.

Washington State: the Attorney General notes that, apart from specific cases such as telemarketing and door-to-door sales, no law requires sellers to accept items for refund, exchange or credit unless the merchandise is defective or misrepresented. Your posted policy carries most of the weight.
California: under Civil Code section 1723, if you do not give a full cash or credit refund or an equal exchange for at least seven days with proof of purchase, you must display your policy at each register and sales counter, at each public entrance, on item tags or on order forms. Food, plants, flowers, final sale, used, custom and health-related items are exempt. If you do not display it, the California Attorney General explains the customer can return the item within 30 days for a full refund.
New York: General Business Law section 218-a requires stores and online retailers to post their refund policy before purchase, including whether refunds are given, in cash or store credit, any time limit and any fees with their amount, and that a written copy is available on request. If no policy is posted, the New York Department of State says you must accept unused, undamaged items within 30 days, with cash or credit at the customer's choice.
United Kingdom: GOV.UK says you must offer a full refund if an item is faulty, not as described or does not work, and that displaying a sign saying you do not accept returns or offer refunds is illegal. In-store change of mind is up to you. For online, phone and mail orders, customers can cancel within 14 days of receiving the item, have another 14 days to send it back, and must be refunded within 14 days of you receiving it, including standard delivery. Personalised, perishable and sealed hygiene items are exceptions unless faulty.

Replies for return requests

Save these where you answer messages. Keep the facts in each reply identical to the posted policy. For more message templates, see our Instagram DM replies.

1. Within the policy

Hi [Name], of course. You can return it within [30] days with your receipt. Bring it to [address] any day [hours], or reply with your order number and we will send return details. Refunds go back to your original payment.

2. Outside the return window

Hi [Name], thanks for asking. Our return window is [30] days, and this purchase was on [date], so we cannot refund it. We would be happy to [offer an exchange / store credit] as a one-off if that helps. Let me know.

3. Faulty or damaged item

Hi [Name], I am sorry it arrived like that. Could you send a photo of the problem and your order number? Once we see it we will [repair, replace or refund] it at no cost to you.

4. No receipt

Hi [Name], no problem. If you paid by card, we can look up the purchase with the card. Otherwise we can offer store credit at the current selling price.

If a refund request turns into a public review, our guide to replying to a bad Google review has calm, rule-following wording.

Common mistakes

"No refunds" with nothing else. Unclear, and illegal as a blanket sign in places like the UK.
Fees that only appear at the counter. Put any restocking or return shipping fee in the policy with the amount.
Different windows in different places. 14 days on the website, 30 on the sign. Pick one.
Staff making it up. Print the policy and the four replies for anyone who works the till.
Jargon. "RMA" and "merchandise authorisation" mean nothing to a gift buyer. Use the words customers use.

Where GBot fits

GBot reads your website or Instagram during setup, including your products, prices, hours and tone. From the seven answers above, Mia can draft the full policy, the counter sign and the receipt line in your voice, Leo can turn the sign into a printable graphic, and Nora drafts replies to return requests for you to approve. GBot does not process refunds, does not connect to your till or card reader, and is not a lawyer. You decide the policy; it helps you write it clearly everywhere.