How to Write a Refund Denial Email (With Templates)

Nobody wants to tell a customer "no." But sometimes you have to.

Maybe they're asking for a refund outside your return window. Maybe they violated your terms of service. Maybe they're requesting a refund after using your product for months.

Whatever the reason, denying a refund request is one of the toughest conversations in customer service. Do it wrong, and you lose a customer forever, get a terrible review, or worse—end up in a chargeback dispute.

Do it right, and you can preserve the relationship, protect your business, and sometimes even turn the situation around.

I've written (and received) hundreds of refund denial emails. The worst ones are cold, legalistic, and make customers feel like they've been scammed. The best ones acknowledge the customer's frustration, clearly explain why the refund can't be granted, and offer an alternative solution.

This guide covers everything: when to say no, how to say it professionally, legal considerations, and 12+ copy-paste templates for every scenario.

Table of Contents

1. When to Deny a Refund Request
2. Legal Considerations and Consumer Rights
3. The Anatomy of a Good Refund Denial Email
4. 12 Refund Denial Email Templates
5. Common Mistakes to Avoid
6. How to Handle Escalations
7. Alternatives to Refunds

When to Deny a Refund Request

Not every refund request deserves a "yes." Here's when it's appropriate (and necessary) to say no.

Valid Reasons to Deny a Refund

1. Outside the Return Window

Most businesses have a clear refund policy (30 days, 60 days, etc.). If the customer is requesting a refund months after purchase, you're within your rights to decline.

Exception: If the product was defective or the customer only just discovered the issue, consider making an exception.

2. Product Was Used or Damaged

Many products (clothing, electronics, software) have "no refund after use" policies. If the customer has clearly used the product extensively, a refund may not be warranted.

Exception: If the product failed during normal use, offer a replacement or warranty service instead.

3. Digital Products or Services Already Delivered

Once someone has downloaded your software, taken your online course, or accessed your content, you can't "un-deliver" it. Many digital products are non-refundable for this reason.

Exception: If there was a technical issue that prevented them from using it, or if they contacted you within 24-48 hours, consider a goodwill refund.

4. Violation of Terms of Service

If the customer violated your terms (e.g., shared login credentials, used the product fraudulently, abused the return policy), you can deny the refund.

Exception: None. Document the violation clearly.

5. Customer Error or Buyer's Remorse

If the customer bought the wrong size, changed their mind, or didn't read the product description, you may have a no-refund policy for these cases.

Exception: Consider offering store credit or exchange instead of a full refund.

6. Final Sale or Clearance Items

Items marked "final sale" or purchased during a clearance event are typically non-refundable.

Exception: If the item is defective, you still need to honor warranty claims.

When You Should Probably Grant the Refund

Even if your policy says no, consider saying yes in these cases:

• Customer is clearly in distress (medical emergency, financial hardship)
• Product genuinely didn't work as described
• Your team made an error (wrong item shipped, billing mistake)
• Customer is a VIP or long-time loyal customer
• Refund amount is small (under $20-50, not worth the fight)

Sometimes a $50 refund saves a $5,000 customer relationship.

Legal Considerations and Consumer Rights

Before you deny any refund, understand your legal obligations. Consumer protection laws vary by country and state.

Key Legal Frameworks

United States:

• FTC regulations require clear refund policies
• Some states (like California) have stronger consumer protections
• Digital products have different rules than physical goods

European Union:

• 14-day "cooling off" period for online purchases (mandatory)
• Defective products must be repaired, replaced, or refunded
• Cannot deny refunds for faulty goods, regardless of your policy

United Kingdom:

• Consumer Rights Act 2015 gives customers 30 days for faulty goods
• 14-day cooling off period for distance sales
• "Not as described" claims must be honored

Australia:

• Australian Consumer Law guarantees refunds for major failures
• Cannot override consumer guarantees with your own policy

What This Means for Your Refund Denials

You CANNOT deny a refund if:

• The product is defective or doesn't match the description
• You're in a jurisdiction with mandatory cooling-off periods
• The customer is exercising their consumer rights

You CAN deny a refund if:

• The request is outside your clearly stated policy
• The customer changed their mind (in jurisdictions without cooling-off periods)
• The customer violated your terms of service
• The product was damaged by the customer (not a defect)

Your refund policy must be:

• Clearly stated before purchase
• Easy to find on your website
• Compliant with local consumer protection laws

Pro tip: When in doubt, consult with a lawyer. A wrongful refund denial can lead to chargebacks, lawsuits, and regulatory fines.

The Anatomy of a Good Refund Denial Email

A good refund denial email has 5 essential parts:

1. Acknowledge Their Request (Show Empathy)

Start by acknowledging their frustration. Don't jump straight to "no."

Bad:

We cannot process your refund request.

Good:

I understand how frustrating it is when a product doesn't meet your expectations. I've reviewed your refund request carefully.

2. Clearly Explain Why (Without Being Defensive)

Be specific about the reason. Cite your policy if relevant, but don't hide behind it.

Bad:

According to our policy, all sales are final.

Good:

Because your purchase was made 90 days ago and our refund window is 30 days, we're unable to process a refund. This policy ensures we can maintain our pricing and continue offering quality products.

3. Reference Your Policy (If Applicable)

Link to your refund policy. This shows you're being fair and consistent, not arbitrary.

Example:

As outlined in our refund policy (link), we offer full refunds within 30 days of purchase.

4. Offer an Alternative (If Possible)

Can you offer store credit? A discount on a future purchase? A replacement? Give them something.

Examples:

• "While I can't offer a refund, I'd be happy to send a replacement."
• "I can offer you a $25 store credit toward your next purchase."
• "Let me connect you with our support team to troubleshoot the issue."

5. End on a Positive Note

Even if you're saying no, be kind.

Example:

I know this isn't the answer you were hoping for, but I'm here if you have any other questions.

Refund Denial Email Templates

Here are 12 templates for common scenarios. Customize them to match your brand voice.

Template 1: Outside Return Window

Use when: Customer is requesting refund after your return period has ended

Subject: Re: Your Refund Request for Order #[ORDER_NUMBER]

Hi [NAME],

Thank you for reaching out. I can see you purchased [PRODUCT] on [DATE], and I understand you'd like a refund.

Unfortunately, because your purchase was made [X] days ago and our return window is [Y] days, we're unable to process a refund at this time. This policy helps us maintain our pricing and continue offering high-quality products to all our customers.

That said, I'd like to help. Here are a few options:

1. **Store Credit:** I can offer you a [X]% store credit toward a future purchase
2. **Exchange:** If you'd prefer a different product, I'm happy to arrange an exchange
3. **Troubleshooting:** If there's a specific issue with the product, let me walk you through some solutions

Which option works best for you?

You can view our full refund policy here: [LINK]

Thanks for your understanding.

Best,
[YOUR NAME]

Template 2: Digital Product Already Accessed

Use when: Customer downloaded software, accessed course content, or consumed digital product

Subject: Re: Refund Request for [PRODUCT NAME]

Hi [NAME],

I understand you'd like a refund for [PRODUCT NAME], and I appreciate you reaching out.

Because this is a digital product and our records show it was accessed/downloaded on [DATE], we're unable to offer a refund under our policy. Once digital content is delivered, we can't "take it back," which is why our refund terms are clearly stated before purchase.

However, I want to make sure you get value from your purchase. Here's what I can do:

- **Technical Support:** If you're having trouble using the product, I can connect you with our support team
- **Extended Access:** I can add [X] months of free access to help you get more out of it
- **Bonus Content:** I can unlock [BONUS] as a thank you for your patience

Let me know how I can help you make the most of your purchase.

Best,
[YOUR NAME]

Template 3: Item Used or Damaged by Customer

Use when: Product shows clear signs of use or damage that isn't a defect

Subject: Re: Return Request for Order #[ORDER_NUMBER]

Hi [NAME],

Thanks for contacting us about returning your [PRODUCT].

I've reviewed the photos you sent, and unfortunately, the item shows [specific signs of use/damage: stains, wear, damage]. According to our return policy, we can only accept returns for items in new, unused condition.

I understand this isn't the answer you were hoping for. Here's what I can offer instead:

- **Repair Service:** We can repair the [SPECIFIC ISSUE] for [PRICE/FREE]
- **Discount on Replacement:** I can offer you [X]% off a new [PRODUCT]
- **Care Instructions:** I can send you tips to restore/maintain the item

Would any of these options work for you?

Our return policy is available here: [LINK]

Best,
[YOUR NAME]

Template 4: Final Sale / Clearance Item

Use when: Item was marked as final sale or purchased during a clearance event

Subject: Re: Refund Request for Order #[ORDER_NUMBER]

Hi [NAME],

Thank you for reaching out about your [PRODUCT] purchase.

Because this item was purchased during our [clearance sale / final sale event], it's marked as final sale and is non-refundable. This was clearly noted at checkout and in your order confirmation.

I know this isn't ideal, and I want to help if I can:

- **Is there an issue with the product?** If it's defective, we absolutely want to make it right with a replacement or repair
- **Would you like to exchange it?** While we can't offer a refund, we may be able to exchange it for store credit
- **Did you purchase it as a gift?** We can arrange to have it donated if you'd like

Let me know how I can assist.

Best,
[YOUR NAME]

Template 5: Buyer's Remorse / Changed Mind

Use when: Customer simply changed their mind or made a purchasing error

Subject: Re: Your Refund Request

Hi [NAME],

I understand you've changed your mind about your [PRODUCT] purchase, and I appreciate you letting us know.

While we typically can't offer refunds for change-of-mind returns (as noted in our refund policy at checkout), I'd like to find a solution that works for you.

Here are some options:

- **Exchange:** Swap it for a different [size/color/product] that's a better fit
- **Store Credit:** I can issue [X]% store credit for a future purchase
- **Gift It:** We can help arrange donation or gifting if you'd prefer

Would one of these work for you?

Thanks for being a customer, and I'm here to help.

Best,
[YOUR NAME]

Template 6: Terms of Service Violation

Use when: Customer violated your terms (shared accounts, fraudulent use, abuse)

Subject: Re: Refund Request for [ACCOUNT/ORDER]

Hi [NAME],

Thank you for contacting us regarding a refund.

After reviewing your account, we found that [SPECIFIC VIOLATION: account sharing, fraudulent activity, multiple refund requests]. This violates our Terms of Service, which you agreed to when creating your account.

As a result, we're unable to process your refund request. Your account has been [suspended/closed] as of [DATE].

If you believe this was done in error, please reply with any additional information, and we'll review it further.

You can review our Terms of Service here: [LINK]

Best,
[YOUR NAME]

Template 7: No Refund, But Offering Replacement

Use when: Product is defective, but you want to offer replacement instead of refund

Subject: Re: Your Refund Request for Order #[ORDER_NUMBER]

Hi [NAME],

I'm sorry to hear your [PRODUCT] isn't working as expected. That's definitely not the experience we want for you.

While we're unable to offer a refund at this time, I'd like to send you a replacement right away—no charge, and you can keep the original item.

Here's what I'll do:

1. Ship a brand-new [PRODUCT] today (tracking: [LINK])
2. Include [BONUS/EXTRA] as an apology for the inconvenience
3. Expedite shipping so it arrives by [DATE]

If the replacement doesn't resolve the issue, reach back out and we'll explore other options.

Does that work for you?

Best,
[YOUR NAME]

Template 8: Partial Refund Offer

Use when: You can't offer a full refund, but can offer partial refund or credit

Subject: Re: Refund Request for Order #[ORDER_NUMBER]

Hi [NAME],

Thank you for reaching out about your recent purchase of [PRODUCT].

I understand you're not completely satisfied, and while I'm unable to offer a full refund due to [REASON], I'd like to make this right.

Here's what I can do:

- **Partial Refund:** I can issue a [X]% refund ([AMOUNT]) back to your original payment method
- **Store Credit:** Or, I can offer [X+10]% as store credit ([AMOUNT]) for a future purchase

Which would you prefer?

I appreciate your understanding, and I'm here if you have any questions.

Best,
[YOUR NAME]

Template 9: Service Already Rendered

Use when: Customer used a service (consultation, event ticket, subscription) and wants refund

Subject: Re: Refund Request for [SERVICE]

Hi [NAME],

Thanks for reaching out about your [SERVICE] purchase.

Because the service was already delivered on [DATE] (we have records showing [SPECIFIC DETAILS: attendance, access, usage]), we're unable to issue a refund under our policy.

I understand you may not have gotten the value you expected. Here's what I can offer:

- **Follow-up Session:** A complimentary [30-minute session / consultation] to address any concerns
- **Future Credit:** [X]% credit toward your next [SERVICE]
- **Feedback:** I'd love to hear what didn't meet your expectations so we can improve

Would any of these options be helpful?

Best,
[YOUR NAME]

Template 10: Custom/Personalized Product

Use when: Product was custom-made or personalized for the customer

Subject: Re: Return Request for Order #[ORDER_NUMBER]

Hi [NAME],

Thank you for contacting us about your custom [PRODUCT].

Because this item was personalized specifically for you ([DETAILS: name engraving, custom design, etc.]), we're unable to accept a return or offer a refund. Custom items are non-refundable as stated at checkout and in our policy.

However, if there's an issue with the quality or accuracy of the customization, I'd absolutely like to fix it:

- **Was there an error in the personalization?** We'll remake it at no charge
- **Is there a defect in the product?** We'll send a replacement immediately
- **Does it not match what you ordered?** Please send photos and we'll make it right

Let me know if any of these apply, and I'll prioritize getting this resolved.

Best,
[YOUR NAME]

Template 11: Refund Denied, But Troubleshooting Offered

Use when: Customer wants refund due to product not working, but issue is likely fixable

Subject: Re: Refund Request for [PRODUCT]

Hi [NAME],

I'm sorry to hear you're having trouble with your [PRODUCT]. I can see why you'd want a refund if it's not working as expected.

Before we go down the refund route, let me help troubleshoot—I bet we can get this working for you in just a few minutes.

Based on what you described, here are the most common fixes:

1. [STEP 1]
2. [STEP 2]
3. [STEP 3]

Try these steps, and if it's still not working, reply back with:
- [SPECIFIC INFO TO GATHER]
- [PHOTO/VIDEO IF HELPFUL]

If we can't resolve it, I'll personally make sure we take care of you—whether that's a replacement, refund, or another solution.

Sound good?

Best,
[YOUR NAME]

Template 12: Goodwill Gesture Despite Denial

Use when: You can't refund, but want to offer something to preserve the relationship

Subject: Re: Your Refund Request

Hi [NAME],

Thank you for reaching out, and I'm sorry you're not happy with your [PRODUCT/SERVICE].

While I'm unable to process a refund in this case due to [REASON], I don't want you to walk away feeling frustrated.

Here's what I'd like to offer as a goodwill gesture:

- **[OFFER 1: Free product, discount code, free shipping on next order]**
- **[OFFER 2: Extended warranty, bonus feature, upgrade]**
- **[OFFER 3: Personal support call, VIP access, exclusive content]**

I know this doesn't change the refund situation, but I hope it shows that we value you as a customer.

Let me know if there's anything else I can do to help.

Best,
[YOUR NAME]

Common Mistakes to Avoid

Mistake 1: Being Too Robotic or Legalistic

Bad:

Per Section 4.2 of our Terms and Conditions, refunds are not permitted after 30 days.

Good:

I understand you'd like a refund. Because it's been 45 days since your purchase and our policy allows refunds within 30 days, I'm unable to process this request.

Why it matters: Nobody likes being quoted policy. Acknowledge the human first, then explain the policy.

Mistake 2: Not Offering Any Alternative

Bad:

We can't issue a refund. Thanks for understanding.

Good:

While I can't issue a refund, I can offer store credit or help troubleshoot the issue. Which would you prefer?

Why it matters: "No" without options feels like a dead end. Always offer a path forward.

Mistake 3: Blaming the Customer

Bad:

You should have read the product description more carefully before purchasing.

Good:

I can see how the description might have been unclear. Let me help you find a better fit.

Why it matters: Even if the customer made a mistake, blaming them damages the relationship.

Mistake 4: Over-Apologizing

Bad:

I'm so, so, so sorry we can't help. I feel terrible about this. I wish I could do more. I'm really sorry.

Good:

I understand this isn't the outcome you wanted. Here's what I can do to help...

Why it matters: Excessive apologizing makes you sound weak and inconsistent. Be empathetic but firm.

Mistake 5: Leaving It Open-Ended

Bad:

Unfortunately, we can't process your refund at this time.

Good:

I'm unable to process a refund, but I can offer [ALTERNATIVE]. Reply and let me know if that works, or if you'd like to discuss other options.

Why it matters: Give the customer a clear next step. Otherwise they'll escalate or chargeback.

How to Handle Escalations

Even with a perfect email, some customers will escalate. Here's how to handle it.

When a Customer Threatens a Chargeback

Do:

• Respond calmly and professionally
• Restate your policy and reasoning
• Provide documentation (order confirmation, policy agreement, etc.)
• Offer one final alternative if possible

Don't:

• Argue or get defensive
• Threaten the customer
• Ignore the message

Template:

Hi [NAME],

I understand you're frustrated, and I'm sorry we couldn't reach a resolution.

If you choose to file a chargeback, please know that we'll provide all relevant documentation to your bank, including your order details, our refund policy, and this correspondence.

Before going that route, I'd like to offer one final option: [ALTERNATIVE].

Let me know if you'd like to explore this, or if you have any questions.

Best,
[YOUR NAME]

When a Customer Leaves a Negative Review

Do:

• Respond publicly and professionally
• Acknowledge their concern without admitting fault
• Offer to resolve it privately
• Show other customers you care

Don't:

• Argue in the review comments
• Reveal private customer information
• Ignore it

Template:

Hi [NAME], we're sorry to hear you had this experience. We take all feedback seriously. Our refund policy is [BRIEF EXPLANATION], but we'd love to discuss alternatives. Please email us at [EMAIL] and we'll work on a solution. Thanks for giving us a chance to make this right.

When a Customer Asks to Speak to a Manager

Do:

• Honor the request (or pretend to escalate if you're the manager)
• Have the "manager" restate the same policy with slight variation
• Offer one small additional concession if possible

Don't:

• Refuse to escalate
• Have the manager contradict your original decision
• Make the customer feel stupid for asking

Alternatives to Refunds

If you can't refund, offer one of these instead:

1. Store Credit

When to use: Customer wants refund for change-of-mind or outside return window

Example:

While I can't issue a refund, I can offer you $50 in store credit (25% more than your original purchase) to use on anything in our store.

2. Exchange or Replacement

When to use: Product is defective or customer received wrong item

Example:

I'll send you a replacement right away, and you can keep the original. It'll ship today with expedited delivery.

3. Discount on Future Purchase

When to use: Customer is upset but willing to give you another chance

Example:

I can't refund this purchase, but I'd like to offer you 40% off your next order as an apology for the inconvenience.

4. Extended Access or Bonus Content

When to use: Digital products, subscriptions, courses

Example:

I can't refund your course purchase, but I can give you 6 months of free access to our premium community and bonus workshops.

5. Free Upgrade or Add-On

When to use: SaaS products, subscription services

Example:

While I can't process a refund, I can upgrade your account to our Pro plan for the next 3 months at no extra charge.

6. Partial Refund

When to use: Product worked but didn't fully meet expectations

Example:

I can offer a 30% partial refund ($45) back to your card, so you're only paying for the value you received.

The Bottom Line

Saying no to a refund request is hard, but it doesn't have to destroy the relationship.

The key principles:

1. Acknowledge their frustration first (empathy before policy)
2. Explain why clearly (cite policy, but don't hide behind it)
3. Offer an alternative (store credit, exchange, troubleshooting)
4. Be kind but firm (don't over-apologize or waffle)
5. Know your legal obligations (consumer rights trump your policy)

The templates in this guide work because they:

• Show empathy without weakness
• Explain the "why" without sounding robotic
• Offer a path forward instead of a dead end
• Maintain professionalism under pressure

Use them as-is, or adapt them to your brand voice.

Need help managing refund requests at scale?

Aidly helps you draft professional, empathetic responses to refund requests in seconds. Just describe the situation, and get a customized response based on your policies. Try 5 emails free.

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