Can You Have a No-Refund Policy? What Visa and Mastercard Allow, and Why No One Can Waive Chargeback Rights

Merchants usually ask this right after losing a dispute they thought their terms covered: can I just say no refunds? You can. Visa and Mastercard both let a merchant set its own refund policy, including no refunds, exchange only or store credit only. What no merchant can do is take away a customer's chargeback rights. Those are two different things, and confusing them is where most merchants lose.

This guide covers what the card networks require as of October 2026, why a no-chargeback clause never holds up, which disputes a disclosed policy wins and which it doesn't, and the state and federal rules that can override a no-refund policy. The Visa material is from the Visa Core Rules and Visa Product and Service Rules dated 18 April 2026. The Mastercard material is from the Chargeback Guide Merchant Edition dated 19 May 2026 and the Transaction Processing Rules dated 9 December 2025.

What is a no-refund policy, and do the card networks allow it?

A no-refund policy is a term of sale, disclosed before the purchase, saying you will not give money back when a customer simply changes their mind. Visa's rules say it plainly: a merchant may establish its own credit refund policy, but must disclose it as the rules specify. Mastercard's Transaction Processing Rules let a merchant impose specific terms on a transaction and give examples, including "No Refunds," "Exchange Only," "In-Store Credit Only" and "Original Packaging Required for Returns." Mastercard's Chargeback Guide adds that when the merchant told the cardholder its refund policy at the time of purchase, the cardholder must abide by it.

Both networks attach the same condition: disclosure at the time of the sale. Mastercard's guide says merchants that will not accept buyer's remorse returns and cancellations, or that want special terms such as restocking fees or in-store credit, must disclose those terms at the time of the transaction. It also spells out what happens otherwise: failure to disclose a refund policy results in the merchant having to accept the goods for return and issue a refund.

No chargeback rights: why a waiver clause never protects you

Some merchants go a step further than no refunds and put a no-chargeback clause in their terms: "by purchasing, you agree not to file a chargeback." It does not work, and it is worse than useless.

Chargeback rights sit between the cardholder and the card issuer under the network rules. Your terms of sale are an agreement between you and your customer, and they do not reach that relationship. Visa's rules say a merchant must not require a cardholder to waive the right to dispute a transaction with the issuer. A no-chargeback agreement is therefore a rule violation on your side, not a defense you can raise when a dispute arrives. The issuer will process the dispute as if the clause did not exist, because as far as the network is concerned, it doesn't.

What a disclosed refund policy does is narrower and more useful. It does not remove the customer's right to dispute; it changes the outcome of one kind of dispute. Mastercard's rule that a cardholder must abide by a refund policy disclosed at the time of purchase means a properly disclosed no-refund policy defeats the buyer's-remorse dispute. It defeats nothing else. If you are unclear on how a refund differs from a chargeback, that distinction is worth settling first, because the rest of this guide turns on it.

So instead of a waiver clause, do the things that actually reduce chargebacks: disclose the policy the way the rules require, follow it exactly, keep proof of the customer's acceptance, and handle defect and non-delivery complaints as what they are.

How to disclose a no-refund policy so it counts

Visa's disclosure rule (section 5.4.2.5 of its Product and Service Rules) applies to any merchant that restricts the return of goods or the cancellation of services. It sets out where the policy has to appear, by sales channel:

• In person: at the point of sale before the cardholder completes the transaction, or on the front of the receipt. If the policy is on the receipt or in a separate contract, there must be a space for the cardholder to indicate acceptance.
• Online: in the sequence of pages before final checkout, with a "click to accept" button, checkbox or other acknowledgement. The policy can sit on a separate page, but only if the link to it forms part of that acknowledgement.
• Phone and mail orders: by mail, email or text message.

Mastercard's rules are similar. A merchant can print the terms legibly on the receipt, or disclose them by other means such as signage, as long as the disclosure is prominent and clear enough that a reasonable person would be aware of and understand it before the transaction is completed. Online, the cardholder can accept terms electronically, for example by checking a box or clicking a submit button, and Mastercard says the terms govern in a dispute provided they were disclosed to and accepted by the cardholder before the transaction was completed.

In practice, a policy that lives only in a footer link nobody had to open is hard to prove. Put the policy, or a link to it, next to the checkbox the customer must tick to complete the order, and record that the box was ticked. If you take orders by phone, send the policy in the order confirmation email or text and keep a copy.

The disputes a disclosed policy wins

A disclosed policy is built for one situation: the customer changed their mind. Under Visa, that is Dispute Condition 13.7, Cancelled Merchandise/Services. The issuer can raise it when the cardholder cancelled or returned the purchase, the merchant didn't process a credit, and the merchant either did not properly disclose a limited return or cancellation policy, or disclosed one and did not apply it. Your response is the receipt or other record proving you properly disclosed the policy at the time of the transaction, and that the cardholder received it and did not cancel according to it.

Two parts of that matter. "Did not apply it" means the policy has to be the one you actually follow. If your policy promises returns within 30 days and you refused one on day 20, the disclosed policy works against you. And the issuer normally waits 15 calendar days after the return or cancellation before raising a 13.7 dispute. That wait does not apply if the merchant refuses the cancellation or return. We cover the deadlines issuers must meet to file each dispute separately.

Mastercard handles the same situation under its Cardholder Dispute chargeback (reason code 4853), as "Refund Not Processed." The issuer can charge back when the merchant agreed to a refund and didn't process it, failed to disclose its refund policy and won't accept a return or cancellation, didn't respond to a return or cancellation, or refunded a reduced amount without proper disclosure. That last condition covers restocking fees: a fee you didn't disclose up front can turn a partial refund into a chargeback for the rest. In response, the merchant explains why no refund was processed. If it is relying on terms the cardholder agreed to, it must provide those terms, for example a card-present receipt with the terms printed on it, or an image of the click-to-accept box and the terms for an online sale.

The disputes it doesn't touch

A no-refund policy is about buyer's remorse. Customers who say the product is broken, not what you described, or never arrived are raising different disputes, and your refund policy is not the answer to them.

• Not as described or defective. Visa's Dispute Condition 13.3 covers merchandise or services that were not as described or were defective. Before disputing, the cardholder must return or attempt to return the goods. Visa counts it as an attempt to return if the merchant refused the return, refused to provide a return authorization or label, told the cardholder not to return the goods, or didn't give clear instructions for a return. Visa's list of invalid 13.3 disputes does not include a disclosed no-refund policy. Mastercard's 4853 covers goods that arrived broken or did not conform to their description.
• Not received. If the order never arrived, the dispute is about delivery. Your proof of delivery answers it, not your returns terms.
• Misrepresentation. Visa's 13.5 covers sales where the merchant's representations did not match the terms of sale. Your response has to prove the terms were not misrepresented.
• Fraud. A cardholder who says they never made the purchase is disputing authorization, not your policy.

Refusing a return on a defective or misdescribed item doesn't win the 13.3 dispute. Under Visa's rules it counts as the customer's attempt to return the goods, and it can let the issuer file without waiting. If a customer says the product is defective or not as described, handle it as that kind of complaint, whatever your policy says about change-of-mind returns.

Visa and Mastercard refund rules: where the money goes

Visa also controls how a refund is paid. When a merchant refunds a card purchase, it must, to the extent possible, credit the same card used for the original transaction. It can refund by cash, check, in-store credit or prepaid card only in listed situations: the cardholder has no receipt or other proof of purchase, the customer is returning a gift and is not the original cardholder, the cardholder says the prepaid card used for the purchase has been discarded, or a credit to the card is declined. If a surcharge was added, it has to be refunded too, pro-rated for a partial refund.

A store-credit-only policy disclosed at the sale is a policy about whether you give money back. Once you agree to refund a card sale, send the refund to the card.

State laws that require a posted refund policy

Card network rules are contracts between you, your acquirer and the network. Several states also have statutes on refund policies. These three are examples of how they work, not a complete list, and each has its own scope and exceptions.

New York. General Business Law section 218-a requires every retail mercantile establishment and online retailer to conspicuously post its refund policy. Online retailers were added by an amendment effective August 8, 2025. An online retailer can meet the rule with a notice, or a hyperlink to one, near the item or shown before it asks for billing information. The policy must say whether refunds are given and on what conditions, including whether refunds are given on sale or "as is" items, without proof of purchase, only within a set time, in cash or as credit or store credit only, and subject to any fees, such as a restocking fee, with the amount. It must also tell consumers they are entitled to a written copy on request. A retailer that does not comply is liable for up to 30 days from the date of purchase for a cash refund or credit, at the buyer's option, as long as the merchandise has not been used or damaged and the buyer can verify the purchase date.

California. Civil Code section 1723 applies to retail sellers that sell goods to the public in California and do not give full cash or credit refunds, or equal exchanges, for at least seven days after purchase. They must conspicuously display the policy on signs at each register and sales counter, at each public entrance, on tags attached to each item, or on their order forms. The section does not apply to items such as food, plants, flowers, perishable goods, customized goods received as ordered, and goods marked "as is," "no returns accepted," or "all sales final." A store that violates it is liable to the buyer for the purchase amount if the buyer returns or attempts to return the goods within 30 days of purchase.

Florida. Section 501.142 of the Florida Statutes requires a retail sales establishment that offers no cash refund, credit refund or exchange to post a sign saying so at the point of sale. Without that sign, the law treats the store as having a refund policy. A store that does not comply must give a refund, on request and with proof of purchase, within 7 days of purchase if the merchandise is unused and in its original carton. Food, perishable goods, custom-made or custom-altered goods, and goods that cannot legally be resold are excluded.

If you sell into several states, check the rules for each one, and find out whether a statute written for stores reaches your online sales. New York's now does by name.

Federal rules a no-refund policy can't override

Some federal rules give customers a right to cancel and get their money back, whatever your policy says.

• The FTC Cooling-Off Rule (16 CFR Part 429). For consumer sales of $25 or more made at the buyer's home, or $130 or more at temporary locations such as hotel rooms, convention centers and fairgrounds, the buyer can cancel until midnight of the third business day after the sale. The seller must give written notice of that right and, after a valid cancellation, refund all payments within 10 business days. Sales made at your permanent place of business, and sales conducted entirely by mail or telephone, are excluded.
• The FTC Mail Order Rule (16 CFR Part 435). If you can't ship an order on time, the customer is entitled to cancel and get a prompt refund. Our guide to the Mail Order Rule covers the deadlines and notices.
• Subscriptions. Recurring billing has its own cancellation requirements under federal and state law and under the card networks' rules, covered in our guide to free trial and subscription billing rules. If your billing system retries failed charges, Visa and Mastercard's rules for retrying declined payments apply on top of your cancellation terms.

A checklist for a refund policy that holds up

1. Decide what you will actually do, and write that down. A policy you don't follow when a customer invokes it loses Visa 13.7 disputes.
2. Spell out every restriction: the time limit, condition of goods, packaging, proof of purchase, any restocking fee and its amount, and whether you give cash, card credit, exchange or store credit.
3. Online, put the policy or a link to it in the click-to-accept step before final checkout, and log the acceptance with the order.
4. In person, show it at the point of sale or print it on the front of the receipt with a space for the customer to accept it.
5. For phone and mail orders, send it by email, text or mail, and keep a copy.
6. Never ask customers to waive their right to dispute a charge.
7. Treat defective, not-as-described and not-received complaints as what they are. Offer a return or replacement rather than citing the policy.
8. When you refund, credit the original card. Use other methods only in the situations Visa allows.
9. Check the posting laws in the states you sell into, including New York's online notice requirement.

Underwriters ask about refund policies for a reason. For merchants in higher-risk categories, every dispute counts toward the ratios that card network monitoring programs track. A no-refund policy that is clearly disclosed and consistently applied can win the buyer's remorse disputes. A vague one, or one used to refuse returns of defective goods, generates disputes you will lose. If disputes have put your current processing at risk, contact us. We work with high-risk merchants every day.