What Are Consumer Rights for Refunds

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What Are Consumer Rights for Refunds?

It's not uncommon that products or services you purchased don't meet the required standards. Sometimes the product doesn’t work well, doesn’t look as described, the size is wrong, or you just change your mind and decide you no longer want it.

This is when most of us request a refund. In many cases, merchants honor these requests and send a new item or give back the money, but occasionally, the process is not so smooth. Since there are two sides to every story, the framework has to protect the rights of both merchants and customers.

Consumer Rights Explained

Thanks to John F. Kennedy and his speech to the United States Congress in 1962, Americans got the Consumer Bill of Rights, with the original four rights:

  1. The right to safety
  2. The right to be informed
  3. The right to choose
  4. The right to be heard

These four rights were later supplemented by the additional four through the United Nations Guidelines for Consumer Protection in 1985. Added four rights include:

  1. The right to satisfaction of basic needs
  2. The right to redress
  3. The right to consumer education
  4. The right to a healthy environment

Two consumer rights that customers would depend on when returning a damaged item for a refund are the rights to redress and be heard.

Customer Return and Refund Laws on the Federal Level

Many businesses have accepted a business model that honors returns and refund requests to a great extent. This practice has proved to be a good customer retention strategy, but it is important to note that there are no federal laws that would legally oblige businesses to accept returns or issue refunds unconditionally.

Cooling-Off Rule

Some regulations do exist. The Federal Trade Commission (FTC) devised the so-called “Cooling-Off Rule” that deals with buyer’s remorse, but it has a limited scope. It applies only to sales made at home, workplace, dormitory, or the seller’s temporary location (such as hotel room, convention center, restaurant, etc.) In these cases, the consumer has three days to change their mind, but exceptions to the rule abound:


Excluded Items and Services

  • Sales under $25 made at home
  • Sales under $130 made at provisional locations
  • Sales made over the phone, email, or online
  • Sales needed to meet some emergency
  • Motor vehicles sold at a temporary location if a merchant has at least one permanent store
  • Arts and crafts from places like shopping malls, schools, fairs, etc.
  • Insurance, real estate, securities

Mail, Internet, or Telephone Order Merchandise Rule

Another FTC’s rule that can come in handy for those ensuring that their consumer rights are met is the Mail, Internet, or Telephone Order Merchandise Rule of 1975 (updated in 2014). This regulation mandates that any mail, internet, or phone seller must honor their shipping promises or send the goods within 30 days if no time frame has been stated. If the buyer doesn’t agree to it, a refund must be issued for all unshipped items.

Sellers must process refunds to original forms of payment or in cash, checks, and money orders. The case of Fashion Nova, whose policy didn’t comply with this FTC regulation and cost them $9.3 million in consumer refunds in 2020, confirms how serious this rule is.

Fair Credit Billing Act

This federal law was introduced in 1974 as an amendment to the Truth in Lending Act of 1968. The Fair Credit Billing Act is an invaluable resource for fighting unfair billing practices and billing errors for credit cardholders. In layman’s terms, this act allows consumers to initiate disputes for credit card charges, but under the following conditions:

  • Consumers can file a dispute with a card issuer within 60 days from the receipt of the credit card bill
  • The charges in question must be over $50
  • Consumers must submit their complaints in writing to the card issuer, except for stolen or lost credit cards
  • Consumers who have disputes with a merchant can ask the card issuer to stop the payment and help them resolve the issue, but only if consumers approach the merchant first, the purchase exceeds $50, and it’s been made within 100 miles of the consumer’s residence

The Fair Credit Billing Act was envisioned as a tool for settling billing errors, which include but are not limited to:

  • Unauthorized charges
  • Charges containing wrong dates or amounts
  • Payments for goods and services that were not accepted or delivered as agreed
  • Errors during calculations
  • Charges for goods damaged during the delivery
  • Charges that need clarification

Can Shops Refuse to Give You a Refund?

Issuing refunds and granting returns are at a merchant’s discretion, and no federal or state laws make a refund and return policy obligatory. If the company has a policy regulating returns and refunds, it usually needs to be displayed noticeably on the website or in the store. This aspect of the merchant-consumer relationship is regulated in many states.

There are currently 13 states with explicit laws about return and refund policies, but the requirements differ. It is best to inform yourself of specific regulations valid for your current location. The overview of the existing state laws can be found in the table below:




Civil Code Section 1723

Department of Consumer Protection




Department of Commerce and Consumer Affairs


Consumer Fraud and Deceptive Business Practices Act


Maryland Attorney General

Consumer Protection General Regulations


325F.80 Retail Sales of Consumer Goods. Refunds.
New Jersey

Consumer Fraud Act

New York

Department of State, Division of Consumer Protection


Rhode Island

Commercial Law–General Regulatory Provisions, 6-27-9

Virginia Consumer Protection Act

In most listed states, if the merchant doesn’t visibly present their Return & Refund Policy, customers are entitled to compensation in a reasonable time.

Use DoNotPay to Ensure Your Consumer Rights for Refunds

DoNotPay, as the world’s first AI Consumer Champion, has customer advocacy as a priority. Our app was built on the Fair Credit Billing Act’s legacy to ensure consumer rights protection.

Simplicity and transparency are at the core of our AI-powered AI Consumer Champion services. Even those who are not computer-savvy can use our app without any issues. The procedure for requesting a refund is simple and straightforward:

  1. Set up your DoNotPay account in a
  2. Locate the feature called File a Chargeback
  3. Provide your bank details
  4. Answer several questions about the credit card charge you need to dispute
  5. Confirm your identity and sign the request

After you finish our brief questionnaire, DoNotPay will send a custom-made dispute letter to your card issuer and the merchant in question. In situations where you might need additional help, DoNotPay can provide a letter containing relevant MasterCard and Visa codes and regulations, making your claim will be even stronger.

DoNotPay Has More Tricks Up Its Sleeves

Our app can assist with refunds and credit card disputes without consulting actual lawyers. It doesn’t matter if you need to challenge the charges and ask for a refund from Target, Amazon Prime, Groupon, or various airline companies.

DoNotPay’s virtual credit cards allow you to take advantage of free trials without worrying about charges when the free trial ends. While they contain legitimate credit card information accepted at the signup, they are not linked to your bank accounts, so using them is completely risk-free.

Accessing DoNotPay from any is easy. Once you log in, you’re welcome to explore a vast range of easy solutions to numerous bureaucratic issues:

Want your issue solved now?