How to Write a SaaS Refund Policy (With Template)

Short answer: To write a refund policy for a SaaS, decide your refund window, state how monthly plans, annual plans and usage credits are treated, explain cancellation separately from refunds, cover the EU and UK 14-day consumer right, and give one way to request a refund. Keep it to one page, link it from checkout and your terms, and make sure it matches whoever is the legal seller.

This is not legal advice. Rules, fees and quotes below come from the linked sources, checked 8 Nov 2026; opinions are marked as ours.

TL;DR#

• Cancellation is not a refund. Cancellation stops the next charge. A refund returns money already taken. Say both, separately.
• Pick one window. 14 or 30 days on the first payment are common choices. Labelled examples below; the number is yours.
• Annual plans need a formula. Show it, and include a worked example (we give one below).
• EU and UK consumers get 14 days to cancel distance contracts, and for digital content that right is only lost with express consent and acknowledgement (legislation.gov.uk, reg. 37).
• Chargebacks cost more than refunds: Stripe US charges $15 to receive a dispute and $15 to counter it (Stripe).
• If a merchant of record or app store sells for you, their rules win. Point to them.

Disclosure: ZeroRaised is a launch site for bootstrapped products. We have no commercial relationship with Stripe, Paddle, Lemon Squeezy, Apple or Google, and earn nothing from any link here.

What a SaaS refund policy is for#

Your refund policy is the short, public answer to "can I get my money back?" It usually sits on its own page and is referenced from the payment section of your terms of service, which covers the wider contract. Keep the refund details in one place so the two never disagree. Our read: a clear policy lowers signup friction, gives you a rule to point to, and steers unhappy customers to your inbox instead of their bank.

Cancellation vs refund: write them separately#

Most confusion comes from treating these as one thing.

• Cancellation stops future billing. The common SaaS pattern is that access continues until the end of the period already paid. Paddle's buyer terms say, for example: "You can cancel a Subscription at any time with effect from the end of your current billing period" (Paddle buyer terms).
• Refund returns money for a charge that has already happened. Paddle's refund policy makes the split explicit: "If a transaction is not eligible for a refund, you may still cancel the subscription at any time to prevent future billing" (Paddle refund policy).

In your policy, give each its own heading. Say how to cancel (a button in billing settings beats "email us"), when it takes effect, and what happens to data afterwards.

The sections to include#

A complete policy covers: who sells to the customer, free trial, cancellation, the refund window, monthly plans, annual plans, credits and usage, statutory rights, how to request a refund, how refunds are paid, exceptions, chargebacks, and changes and contact. The template outline below has a slot for each. The sections that need real decisions are covered next.

Choosing a refund window#

There is no single right answer. These are illustrative examples, not recommendations from any source:

Two notes. First, "no refunds" still has to sit alongside any statutory rights your customers have. Second, Paddle uses a 14-day discretionary window itself: "Paddle may, at its sole discretion, issue a refund if a request is submitted within 14 days of your Transaction date" (Paddle refund policy). If you sell through Paddle, a 14-day window in your own copy keeps the two aligned.

Our read: say whether the window applies to the first payment only or to every renewal. Renewals are where most "I forgot to cancel" requests land, and deciding in advance saves you arguing case by case.

Annual plans and the prorated refund maths#

Annual plans are where refund requests get expensive, so put the formula in the policy. If you bill with Stripe, note that its docs say "Negative prorations aren't automatically refunded" (Stripe prorations): a credit on the next invoice is not money back, so a promised refund has to be issued.

Worked example (illustrative numbers, not real customer data). A customer pays $240 for an annual plan. Your monthly plan is $25. They ask for a refund after 92 days, outside your 14-day window, and your policy offers pro-rata refunds on annual plans.

Method A, pro-rata by days:

• Unused days: 365 - 92 = 273
• Refund: $240 x 273 / 365 = $179.51
• You keep: $60.49 for the 92 days used

Method B, months used at the monthly price:

• Months started: 4 (92 days runs into a fourth month)
• Charged at the monthly rate: 4 x $25 = $100
• Refund: $240 - $100 = $140

Method B claws back the annual discount the customer did not earn by staying a full year. Method A is simpler and friendlier. Either is fine if you state it upfront.

One cost to remember: Stripe says "Stripe's processing fees from the original transaction aren't returned" when you refund (Stripe refunds). In both methods you absorb the original card fee.

Usage-based charges and credits#

If you sell credits, seats or metered usage, say what happens to:

• Unused prepaid credits. Refundable, account credit, or expiring (and when)?
• Consumed usage. Our read: API calls or AI tokens you already paid a supplier for are usually non-refundable; say so plainly.
• Overage. Point to usage alerts or caps so overage is never a surprise.
• Add-ons. Say whether they end with the main plan. Paddle's policy, for instance, says add-ons "expire when the main Subscription ends" (Paddle refund policy).

EU and UK: the 14-day right to cancel#

If you sell to consumers in the EU or UK, your refund policy cannot take away their statutory right to cancel a distance contract. The EU's consumer portal explains that consumers can withdraw within 14 days without giving a reason, and that for services the period starts on the day the contract is agreed (Your Europe).

For digital content, the UK rule is that the trader must not begin supply before the end of the cancellation period unless the consumer gives express consent and "has acknowledged that the right to cancel the contract under regulation 29(1) will be lost" (reg. 37). The EU directive has the same idea in recital 19 (Directive 2011/83/EU).

What that means in practice:

1. Add a consent checkbox at checkout for EU/UK consumers: they ask for access to start now and acknowledge they lose the right to cancel once it does. Without it, UK rules say the consumer "bears no cost for supply of the digital content" in the cancellation period (reg. 37(4)).
2. Tell customers about the right. GOV.UK warns: "If you do not tell the customer about their right to cancel, they can cancel at any time in the next 12 months" (GOV.UK).
3. Refund fast. UK regulation 34 requires reimbursement "without undue delay" and, for non-goods, by "the end of 14 days after the day on which the trader is informed", using "the same means of payment" (reg. 34).

Whether a given SaaS counts as digital content or a service can change which rule applies. Our read: if consumers are a real share of your revenue, this is the paragraph to get a lawyer to check.

These are consumer rules. The directive says its harmonised rules "should only concern contracts concluded between traders and consumers" (recital 8), so pure B2B sales are generally outside them, although member states may extend the rules further.

Chargebacks and disputes#

A dispute, in Stripe's words, "occurs when a cardholder questions your payment with their card issuer" (Stripe disputes). In the US, Stripe charges a $15 dispute received fee and a $15 dispute countered fee; the countered fee is "returned to you if you win", while Stripe says "we never return the dispute received fee" unless your contract says otherwise (Stripe dispute fee update, how disputes work). Stripe's UK pricing lists £20.00 for each of those two fees (Stripe UK).

So a $29 refund is often cheaper than a $29 dispute, before you count your time. In the policy:

• Ask customers to contact you before contacting their bank, and give a fast reply time.
• Say that access may be suspended while a chargeback is open. Paddle's policy says access "may be temporarily suspended while the matter is reviewed" (Paddle refund policy).
• Use a billing descriptor customers will recognise, so they do not dispute a charge they simply do not remember.

When someone else is the seller#

If you use a merchant of record, the customer is buying from them, and their buyer terms govern the refund. Our merchant of record vs payment processor guide covers the trade-off; here is what matters for your policy.

• Paddle: "Unless required by applicable law, all Transactions are non-refundable and non-exchangeable", with discretionary refunds within 14 days and statutory withdrawal rights listed by country (Paddle refund policy).
• Lemon Squeezy: "Refunds are provided at the sole discretion of Lemon Squeezy and on a case-by-case basis and may be refused", and "There are no refunds on unused subscription periods" (Lemon Squeezy buyer terms).
• Apple App Store: customers request refunds from Apple: "Sign in to reportaproblem.apple.com" (Apple Support).
• Google Play: Google says "contacting the app developer directly is often the quickest way to resolve the issue", and unauthorized charges should be reported "within 120 days of the transaction" (Google Play Help).

Our read: in these setups, keep your own policy short. Say who the seller is, link their terms, and describe what you will support (for example, asking the MoR to refund within your window). Do not promise something the seller will not honour. If you charge through Stripe directly, you are the seller and the whole policy is yours; our guide on how to sell software online walks through that choice.

Fill-in refund policy template outline#

Copy this outline, replace each bracket, and delete what does not apply. It is a starting structure, not legal text.

REFUND AND CANCELLATION POLICY
Last updated: [date]

1. Who sells to you
   [Product] is provided by [legal entity, country].
   Payments are processed by [Stripe / sold by Paddle / Lemon Squeezy / Apple / Google].
   [If an MoR or app store: their buyer terms apply to refunds. Link.]

2. Free trial
   Trial length: [X] days. Card required: [yes/no].
   First charge on: [day X]. Cancel before then and you pay nothing.

3. Cancelling
   Cancel anytime in [Settings > Billing].
   Cancellation takes effect at [end of current billing period].
   Your data is kept for [X] days, then deleted.

4. Refund window
   First payment: full refund if requested within [X] days.
   Renewals: [refundable within X days / not refundable].

5. Monthly plans
   After the window: [no refund for the current month; access continues].

6. Annual plans
   After the window: [no refund / pro-rata by unused days /
   refund minus months used at the monthly price of $X].

7. Credits and usage
   Unused prepaid credits: [refundable / account credit / expire after X].
   Consumed usage and overage: [not refundable].

8. EU and UK consumers
   You have a 14-day right to cancel. [Describe checkout consent
   for immediate access and what happens if you cancel.]

9. How to ask for a refund
   Email [address] with your account email and invoice number.
   We reply within [X] business days.

10. How refunds are paid
    To the original payment method, within [X] days of approval.

11. Exceptions
    We may refuse refunds for [abuse, fraud, terms violations,
    repeated refund requests].

12. Chargebacks
    Please contact us first. If a chargeback is opened,
    access may be [suspended] while it is reviewed.

13. Changes
    We will post changes here and [email active customers].

Contact: [email, postal address]

Publish it on its own URL (for example /refunds), link it from checkout, pricing and the footer, and reference it from your terms rather than duplicating it.

Frequently asked questions#

Do SaaS companies have to offer refunds?#

Not in every case. Outside statutory rights, a refund policy is a business choice. But EU and UK consumers have a 14-day right to cancel online contracts, which for digital content only falls away if they expressly consent to immediate supply and acknowledge they lose the right. Business customers are usually outside those consumer rules. This is not legal advice.

What is a good refund window for a SaaS?#

Our read: 14 days on the first payment is a common, easy-to-defend choice because it lines up with the EU and UK cancellation period and with Paddle's discretionary refund window. Some founders offer 30 days to reduce signup friction. Whatever you pick, state it once and apply it consistently.

Should I refund the unused part of an annual plan?#

You can choose. Options are no refund after the window, a pro-rata refund of unused days, or a refund minus the months used at the monthly price. Write your choice into the policy and show the formula, so support decisions are consistent.

What is the difference between cancellation and a refund?#

Cancellation stops future charges, usually at the end of the current billing period. A refund returns money already paid. Paddle's buyer terms say a subscription can be cancelled at any time with effect from the end of the current billing period, and its refund policy says you may cancel even if a payment is not refundable.

Who handles refunds if I sell through Paddle, Lemon Squeezy or an app store?#

The seller of record. Paddle and Lemon Squeezy each state in their buyer terms that refunds are at their discretion. Apple customers request refunds through reportaproblem.apple.com. Google Play says contacting the developer is often the quickest route. Your own policy should point to the right channel.

Launch with your policies in place#

Once your refund policy, terms and privacy policy are live, you are ready to take strangers' money. Launch your product on ZeroRaised for free, and join the newsletter for more practical guides for founders building without investors.

Sources#

• Stripe: June 2025 pricing updates for disputes, last checked 8 Nov 2026
• Stripe UK pricing, last checked 8 Nov 2026
• Stripe Docs: Refunds, last checked 8 Nov 2026
• Stripe Docs: Prorations, last checked 8 Nov 2026
• Stripe Docs: Disputes, last checked 8 Nov 2026
• Stripe Docs: How disputes work, last checked 8 Nov 2026
• Your Europe: Returns and the right of withdrawal, last checked 8 Nov 2026
• GOV.UK: Online and distance selling for businesses, last checked 8 Nov 2026
• Consumer Contracts Regulations 2013, regulation 37, last checked 8 Nov 2026
• Consumer Contracts Regulations 2013, regulation 34, last checked 8 Nov 2026
• Directive 2011/83/EU on consumer rights (EUR-Lex), last checked 8 Nov 2026
• Paddle checkout buyer terms, last checked 8 Nov 2026
• Paddle refund policy, last checked 8 Nov 2026
• Lemon Squeezy buyer terms, last checked 8 Nov 2026
• Apple Support: Request a refund, last checked 8 Nov 2026
• Google Play Help: Refund policies, last checked 8 Nov 2026