“Can I get a refund?”
You can go ahead and file that question under one of the most frustrating messages to receive as a business owner. Whether you sell physical or digital products, refund requests are one of those things that make you want to crawl in a hole.
They can make you feel uneasy and unsure how to respond because of course you want your customers to be happy.
But you also have a business to run. And shilling out refunds every time a customer claims your digital course “didn’t meet their expectations” – even though they’ve already downloaded and watched all of the material – or that your product was “damaged in shipping and they want their money back” – even though you're willing to send a new product – isn’t going to make you very profitable.
Refund requests can be a tricky situation to navigate as a business owner, but it becomes a little less tricky when you have a solid legal agreement backing you up – a Terms of Purchase Agreement.
Legal agreements like this aren’t just meant to be jargon filled documents that make you look legit. They are meant to be boundary-setting tools that protect your income, your time, and your sanity.
But also for what it’s worth, they DO make you look very legit, too!
So, because Terms of Purchase Agreements are so important for business owners of all kinds, let’s dive into a few real life scenarios of what could go wrong without one AND how having the right clauses in our agreement can keep you out of sticky situations.
Common Refund Request Scenarios That Catch Business Owners Off Guard
🧾 Scenario 1: The “I Want a Refund But Already Downloaded It” Dilemma
Digital product sellers, this one is for YOU! As a practicing lawyer for small business owners, many of my clients are online business owners – meaning everything they sell is digital.
Whether it be an e-book, online course, or some type of template (very similar to what I sell in the TBL Contract Shop), I see this scenario playing out alllll the time. And it’s why I’m so incredibly passionate about online business owners having a Terms of Purchase Agreement for their business.
It goes like this:a customer buys your digital product and downloads it within minutes of purchase. Then, three days later they email you asking for a refund because they “didn’t find it helpful.”
The Problem: Without terms stating that digital product sales are final once downloaded, you may feel forced to issue a refund, despite having no way to “return” the product.
The Solution: This happens more than you think and the ONLY solution (like for real!!) is having a Terms of Purchase that very clearly states your no refund policy AND making sure it’s displayed in other places throughout the checkout process, such as your sales page, checkout page, confirmation email, etc.
📦 Scenario 2: The Damaged Product Complaint
Now let’s say you sell physical goods, like candles, mugs, or prints. You’re in a different situation than exclusively online sellers because in your case there IS a product that can be returned.
But that doesn’t necessarily mean you have to do that. You can decide how you want your refund requests to be handled when it comes to product replacement, shipping, etc.
In this scenario, a customer buys your product and later says that it arrived broken (with photos as proof) and they say they want a replacement and a refund.
The Problem: If you haven’t spelled out shipping and return policies in your Terms of Purchase, you could end up eating the cost of the product, the shipping, and more.
The Solution: Your Terms of Purchase should outline the refund or replacement process for damaged goods, setting the expectations before the box ever leaves your hands.
⏰ Scenario 3: The Refund Window Misunderstanding
This scenario could technically apply to both – digital product and physical product sellers. As a business owner, you may decide that you’re actually totally okay with offering refunds under certain circumstances within a certain time frame.
So, let’s say you offer a 14-day refund policy, but a buyer tries to return a product 30 days later. In this instance, you don’t want to be the bad guy, but you also don’t want to set a precedent.
The Problem: Without very clear outlined refund timelines, it’s harder to enforce policies or back yourself up during a chargeback.
The Solution: Your Terms of Purchase gives you a written policy to refer back to, so you can uphold boundaries without feeling guilty about it.
💳 Scenario 4: The Chargeback Drama
Similar to above, any type of chargeback scenario applies to both, digital and physical product sellers.
If you’re unfamiliar with chargebacks, they’re essentially payment disputes that someone conducts through their bank instead of through you. That’s the biggest difference between chargebacks and refunds, but I go into more detail on that here!
Chargebacks were initially designed to be a form of consumer protection to provide a resolution for unauthorized or fraudulent transactions, billing errors or purchases not delivered as promised, but as the online business industry has grown, chargebacks have too… and not in the way they were intended.
When someone initiates a chargeback, the card issuer or bank will investigate the claim and determine whether or not it’s valid.
Although there is an investigation before chargebacks are issued, in most cases it can be difficult to obtain tangible proof of validity, so oftentimes their financial institution will be on the side of their customer, believe that their claim is true and approve the request.
The Problem: Without clear, written terms that outline exactly what the buyer agreed to, you have little ground to stand on when trying to dispute the chargeback.
The Solution: ATerms of Purchase agreement (for digital products and for physical products) helps you fight chargebacks by proving the buyer agreed to your refund and delivery terms.
📤 Scenario 5: The “You Didn’t Say That” Email
And lastly, these types of scenarios can often be the worst for digital product sellers because it involves someone not fully understanding what your product or service includes.
In this instance, someone could buy your course and assume it includes 1:1 coaching. You know that you never said it did… it’s not on your sales page, you never mentioned it in your promotional emails or social posts, and you definitely didn’t tell them that in a conversation.
But, you also never said it didn’t. 🫣
As a business owner, you’re naturally inclined to talk about what someone WILL get when they purchase from you, but when it comes to the fine print, it’s also sometimes necessary to make sure they fully understand what they WON’T be receiving.
The Problem: Ambiguity can lead to assumptions by your customers and assumptions can lead to angry emails with someone asking for something that they didn’t pay for.
The Solution: A strong Terms of Purchase clearly spells out what is and isn’t included, so there’s no confusion about the scope of your offer and you have something to back you up if a customer asks.
What To Include in Your Terms of Purchase Agreement
Now that it’s prettyyyy obvious why you need a Terms of Purchase Agreement as a business owner – whether you sell digital or physical products – let’s get into what exactly you should include in the agreement.
The first myth I want to bust here is that this doesn’t have to be overly complex, but it DOES need to be thorough! There should be no room left for confusion and the ambiguous language doesn’t belong here.
Crystal clear communication will keep YOU in the clear. 👏🏼
Here’s a quick breakdown of what should be included for both digital and physical products:
✅ For Digital Products:
- No-refund policy after download
- Usage restrictions (ex. personal use only, no redistribution)
- Delivery method (automatic email, download link, etc.)
- Expiration window for download access
- Support availability (if any)
✅ For Physical Products:
- Refund and return timelines (ex. 14 days from delivery)
- Shipping and handling policies
- Damage reporting timelines (ex. within 48 hours of delivery)
- Responsibility for return shipping
- Any restocking fees or exceptions
This might seem like a lot to figure out, but the good news? You don’t have to draft it from scratch!
Instead, you can use The Boutique Lawyer’s attorney-drafted Terms of Purchase contract template that’s been tailored to the type of products you sell.
You can choose the one that best suits your business style and trust that you’re legally protected from day one!
It doesn't matter if you’re selling a $19 eBook or a line of handcrafted goods, your checkout process needs legal backup.
And these templates are the EASIEST way to do it while giving you the confidence to sell boldly, knowing you’re protected from unnecessary drama and loss. 🙌🏼
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