Putting the ‘fun’ back into ‘Refund and Cancellation Policies for ecommerce’

Around this time three years ago, most of us were packing up our office belongings and heading off to work from home for two weeks. (Oh how naïve we were!) At the same time, Carleton had to cancel all in-person events. This meant refunding 1500 people for those cancelled events which the university had taken payment for via CU Ecommerce.

Receiving a refund in that situation was automatic. It wasn’t our customers’ fault that we had to cancel those events. It didn’t matter that Carleton lost money – refunding the customers’ money was imperative, especially in the uncertain times of Spring 2020.

Cancellation Culture

Now as events on campus are going back to pre-COVID levels, it is good to remember that every event which charges for attendance, or every paid service or product sold via CU Ecommerce must have a refund policy, stipulating the conditions that enable a refund to be claimed, the time frames involved, the amount individuals can expect when requesting a refund and whether there are special situations (e.g., a provincial health mandate) that alter the policy.

What is the advantage of having a clear and prominent refund policy? According to UPS, customers pay very close attention to such policies with “64% reviewing the returns policy before they make a purchase online”. In other words, a lot of people will not make a purchase if they don’t think it is reversible.

We work closely with the Payment Card industry (PCI) to help our customers feel secure in their purchases. One action card users can take if they are unhappy is ask the payment card issuer to refund their money. (This is called a charge back.) If the card issuer decides the customer has a good case they will claw the money back from Carleton to give to the customer. This is expensive for us and if we are in this position too many times banks could stop allowing us to process their cards. Worst of all, it is bad public relations!

What does a typical refund policy look like?

We have a great example of what a refund policy can look like for events staged on campus. The Department of University Advancement boasts a nicely crafted policy, which you can view on their ecommerce website. Why is this a good example?

• The page is entitled Refund Policy – rather than something like Cancellation Policy.
• A cancellation policy includes info about what you as an event host/service provider will do if you cancel an event and under such circumstances what your refund actions will be.
• Bear in mind you cannot imagine all the scenarios that might lead to cancellation. E.g., If you were planning an event to take place in April 2020, you would probably not have covered what happens the eventuality of a global pandemic breaking out. Cancellation also has a bit more of a negative ring to it
• The text lays out some different situations and scenarios and makes it clear what happens in each of these.
• It establishes timeframes for when a refund can take place and how long it might take to be processed.

It is important to cover all your bases and protect your event or service (for example, from failing to break even). At the same time, you must balance with this the maintenance of a good relationship with the community with which you are doing business.

With that in mind, you should aim for fairness and clarity while also putting the onus on the customer to seek out a refund from you.

What should go into a refund policy?

Your refund policy should include:

• general situations in which you will issue a refund
• if and how this may vary over time leading up to an event
• whether a refund will be full or partial
• what are the timelines involved in

You should list the circumstances under which a refund will be given (or not given). For example, it may be that a student who pays for a field trip via CU Ecommerce must withdraw from the course in order to qualify for a refund. It may be tied to serious illness or bereavement, but remember you would have to have a way to check for this. If you make providing evidence a stipulation, then things could get very weird, very fast.

The cheque’s in the mail

However, most refunds depend on time as the main criterion. Here you have a big range of options. You might insist no refunds will be given to those requesting them within the five days leading up to an event. You can also decide to make the refund policy more lenient the more notice is given. For example, you could have a policy that states there will be a 100% refund if it is requested up to 30 days before an event, with a 50% refund if it is requested within 30 days of the event. Alternatively, you can say there will be a refund but with a 10% administrative fee.

You can make the same kinds of refund promise, but not linked to any time framework – for example, cancel at any time and receive a 75% refund.

Note: When we say The cheque is in the mail we don’t mean literally. We only refund via the card used to pay in the first place. According the banks this is just good customer service – it is what the customer expects and is theoretically not giving them extra work to do (for example, going to the bank to pay in a cheque).

Friend or Foe

It is around this kind of decision that you have to strike a balance. You must be fair to your event and its stakeholders, but also fair to the customer. They may have a very legitimate reason to withdraw from an event. Another way to look at it is your event’s solvency versus the need to maintain good PR for your department and the University as a whole.

In terms of timelines, ITS Finance generally executes people with refunds within five days of receipt of the request. Once that step is taken we can confirm a refund will be coming their way. However, after this point the question of how long a refund takes is out of the hands of anyone at Carleton – it is down to the payment card issuer. It can take 30 days to appear on someone’s credit card account.

If you don’t have a refund policy at home, shop-bought is fine

To make things easier we have prepared a choice of policies you can adapt to your own use. If you would like to employ any of these, you can copy the text, edit it to match your event, and paste this into a request to the ITS Service Desk. In the request simply ask that it be used as the refund policy page on your ecommerce site. Don’t forget to include the URL of your ecommerce site.

If you have any questions or simply want to add a mandatory refund policy please contact the ITS Service Desk.