Online shopping offers convenience and flexibility, but it also raises questions about your rights when things go wrong. What happens if you receive a faulty item, change your mind, or cancel an order made online? UK consumer law provides strong protections in such cases – including the right to a full refund within a specific period. In this article, we explore when and how retailers are required to return funds to customers, and what obligations they must meet under the current legal framework.
Cancelling a distance contract – when can a customer request a refund?
Under the Consumer Contracts Regulations 2013, UK shoppers who purchase goods online, over the phone, or by mail order are legally entitled to cancel their order within 14 calendar days of receiving the item – for any reason and without explanation.
This 14-day “cooling-off period” applies to most goods and services, and if exercised, obligates the retailer to issue a full refund, including the basic cost of delivery, within 14 days of being notified of the cancellation. The refund must be processed using the same payment method unless the customer agrees to an alternative.
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Retailers are allowed to delay the refund until they have received the returned goods, or proof of postage – whichever comes first.
Refunds for faulty goods – how do the rules differ?
If the product is faulty, not as described, or unfit for purpose, the Consumer Rights Act 2015 applies. According to this law, a customer has:
- 30 days to reject the item and receive a full refund,
- up to 6 months to request a repair or replacement (and a refund if that fails),
- and up to 6 years (5 in Scotland) to raise a claim if the product does not last a reasonable amount of time.
In these cases, retailers are legally required to cover all costs, including the cost of return postage. The refund must be issued within 14 days of the return being accepted.
Importantly, this right is separate from the cooling-off period – it applies even after the initial 14 days have passed, provided the goods are faulty.
How should the refund be processed? Method and timing
UK regulations state that refunds must be issued using the same payment method as the original purchase, unless the customer agrees otherwise. This includes:
- card payments → refunded to the same card,
- bank transfers → returned to the same account,
- PayPal or digital wallets → refunded to the original wallet or account.
Modern payment processors – such as Fenige – support instant or near-instant refunds, helping retailers meet compliance requirements while improving the customer experience. These systems also simplify reconciliation and reduce refund-related administration.
Are there exceptions to refund obligations?
Yes, there are some products and services that are exempt from the 14-day cooling-off period, including:
- personalised or made-to-order items,
- perishable goods (e.g., food, flowers),
- sealed goods that are not suitable for return once opened (e.g., cosmetics, hygiene items),
- digital content (e.g., downloads or streaming) if the download has started and the customer agreed to waive the right to cancel.
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In these cases, retailers are not legally required to offer a refund – but must make the exemption clear in their terms and at the time of sale.
What happens if a retailer doesn’t issue a refund on time?
If a retailer fails to refund within the legal timeframes, they may face formal complaints or legal action. Consumers can:
- raise a dispute through the retailer’s complaints procedure,
- escalate the issue to Citizens Advice or Trading Standards,
- initiate a chargeback with their card provider or bank,
- or submit a complaint to an Alternative Dispute Resolution (ADR) provider or Ombudsman.
Repeated non-compliance can damage a retailer’s reputation and trustworthiness – not to mention result in penalties from regulators. From a commercial standpoint, delayed refunds increase customer churn, negative reviews, and operational costs.
Transparency and timely refunds – essential to long-term customer trust
In the UK, refund rights are not just a courtesy – they are a legal obligation and a core part of consumer protection. Retailers must have clear processes, adequate systems, and reliable payment infrastructure to meet these requirements.
With tools like Fenige’s PaymentHub, refunds can be automated, tracked, and settled efficiently – helping merchants stay compliant while delivering a seamless customer experience. Because in modern e-commerce, a fast and fair refund process isn’t just good service – it’s a strategic advantage.
