Designing a Refund Policy
Builds guide sites for a livingPublished July 24, 2026Last updated July 26, 202631 min read
- 16 CFR 435 is limited to sales of merchandise ordered by mail, internet or telephone, so its timetable and refund mechanics do not attach to a guided trip.
- 15 U.S.C. 45(a)(1) declares unfair or deceptive acts or practices unlawful with no merchandise limitation, which is the provision that reaches a service business.
- The practical exposure is a published policy you then depart from, not the absence of a federal deadline.
- The rule's seven working day prompt refund standard is worth adopting voluntarily because a stated turnaround is demonstrable.
- State tiers in dollars rather than percentages, tie the boundaries to how long a date actually takes to resell, and keep them to two or three.
- When you cancel, refund in full without conditions. It is the term that makes a strict ladder credible.
The federal refund rule everybody cites is about shipping merchandise. A guided day is a service, and the rule's own text is limited to the sale of merchandise ordered by mail, internet or telephone.
Which means no federal timetable tells you when to refund a trip. What governs is the agreement your client accepted, and the reason that matters is the other statute: unfair or deceptive acts or practices are unlawful whether or not the merchandise rule reaches you. So the exposure is not failing to hit a deadline nobody set. It is publishing a policy you then depart from. Below, the merchandise rule's scope and its refund standard are read from the regulation, the general prohibition from the statute, and the practical structure is built from there. Rules change, so check the exact current requirements with the agency before relying on any of it. Nothing here is legal advice. Related reading sits at the running the business hub.
| Cancelled | Client keeps | You keep |
|---|---|---|
| More than 30 days out | $200 deposit refunded | $0 |
| 15 to 30 days out | $100 refunded | $100 |
| Inside 14 days | $0 | $200 |
| You cancel, any notice | $650 or the full amount paid | $0 |
What does the merchandise rule actually cover?
Orders for merchandise, and it says so in its operative sentence.
Section 435.2 of Title 16 makes it an unfair method of competition and an unfair or deceptive act or practice for a seller, in connection with mail, internet or telephone order sales in or affecting commerce, to solicit any order for the sale of merchandise unless at the time of solicitation the seller has a reasonable basis to expect it will be able to ship the ordered merchandise within the time clearly and conspicuously stated, or within thirty days if no time is stated.
Every operative limb of that turns on merchandise and on shipment.
Section 435.1(a) defines the covered sales as those in which the buyer has ordered merchandise from the seller by mail, via the internet or by telephone, regardless of the method of payment or the method used to solicit the order.
A guided day is not merchandise and is not shipped, so the rule's timetable and its refund mechanics do not attach to it.
Part 435 is carried on the eCFR.
What the agreement itself has to contain is covered in the booking terms piece.
So what does reach a guiding operation?
The general prohibition, which is not limited to goods.
Section 45(a)(1) of Title 15 declares unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, to be unlawful.
There is no merchandise limitation in that sentence, and no shipment requirement, which is why the general prohibition is the provision that matters to a service business.
Subsection (a)(2) empowers and directs the Commission to prevent persons, partnerships and corporations from using such methods, acts and practices, with stated exclusions for banks, savings and loan institutions, federal credit unions, common carriers subject to the Acts to regulate commerce, air carriers, and persons insofar as they are subject to the Packers and Stockyards Act.
A guiding operation is in none of those excluded categories.
Section 45 is published by the Law Revision Counsel, with a parallel text on govinfo.
Why the published policy has to match the practice is covered in the pricing display piece.
Set the tiers off the real cost of a lost day, not off a feeling. A $650 day cancelled inside two weeks is rarely resold, so the loss is close to the whole $650 less the variable costs you avoid, maybe $70 of fuel and shuttle, leaving about $580. A $200 non-refundable deposit recovers roughly 34 per cent of that. Move the deposit to $250 and you recover about 43 per cent; at $325, half. Now the other side: across 90 trips a season, if 6 cancel late, the uncovered loss at a $200 deposit is about $2,280, and at $325 it is about $1,530. The $125 difference per booking is what the tier is actually buying, and it is worth stating in the agreement rather than negotiating each time.
What is the rule's refund standard?
Seven working days, and it is worth borrowing.
Section 435.1(b)(1) defines a prompt refund, for most of the situations the rule covers, as a refund sent by any means at least as fast and reliable as first class mail within seven working days of the date the buyer's right to refund vests.
It adds a proviso for the case where the seller cannot refund by the method payment was tendered: then it means cash, cheque or money order sent within seven working days of the date the seller discovers it cannot refund by the original method.
Paragraph (b)(2) sets a different standard for one credit sale situation, being a refund sent within one billing cycle from the date the right vests.
None of that binds a guiding operation, and adopting the seven working day standard voluntarily is a straightforward way to make a policy credible.
It also removes an argument, since a stated turnaround is easier to demonstrate than a promise to be reasonable.
How the confirmation should state it is covered in the trip reminder piece.
State consumer law is not covered here. States have their own rules on cancellation, disclosure and unfair practices, and no state statute was read for this page. Verify the exact current position for your state and with the federal agency before you publish a policy. This is not legal advice, and a policy that matters should be reviewed by a lawyer.
What does the rule mean by refund?
Different mechanics for different payment methods, and the distinctions are useful.
Section 435.1(d) defines refund separately by how the buyer paid.
Where the buyer tendered full payment in cash, cheque or money order, it means a return of the amount tendered in the same forms.
Where there is a credit sale and a third party is the creditor, it means an appropriate credit memorandum sent to that creditor to remove the charge, plus a copy to the buyer stating the date it was sent and the amount to be removed, or alternatively a statement from the seller acknowledging cancellation and representing that it has taken no action that will result in a charge.
Where payment came by any other means, it means instructions to the entity that transferred the payment to return the amount in the form tendered, plus a statement to the buyer setting out those instructions with their date and the amount.
The common thread is that the buyer gets told, in writing, what was done and when, which is the part a guiding operation should copy regardless of whether the rule applies.
What the payment record should show is covered in the bookkeeping piece.
What actually decides a guiding refund dispute?
The agreement, because that is what a reviewer measures against.
Where a client reverses a card payment, the relevant test asks whether the service was delivered as agreed, which sends everybody to the agreement rather than to anybody's disappointment.
An agreement that says a trip runs in rain but not in lightning has answered a question that would otherwise be a matter of opinion.
One that says nothing about weather has left the most common cause of a cancelled day undefined, so the argument is about what was reasonable rather than about what was agreed.
Which is why the drafting work pays off in disputes you never have, and why a vague policy is worse than a strict one.
Strictness is not the objective either. Clarity is, because a client who understood the terms rarely disputes them.
How that dispute process runs is covered in the chargebacks piece.
Should a deposit be non-refundable?
Usually yes, and the reason is capacity rather than punishment.
A booked day removes a date from sale, and a late cancellation is a day you can no longer sell, so the loss is real and it is not recovered by goodwill.
A non-refundable deposit prices that risk in advance and prices it symmetrically, since the client knows the figure before they commit.
On a $650 day a $200 deposit recovers roughly a third of a lost date, which is a defensible split and a common one.
What undermines it is refunding non-refundable deposits case by case, because a term departed from repeatedly is not a term and every client eventually learns that.
The alternative that keeps goodwill is a transfer to another date rather than a refund, which costs you nothing when the original date resells.
How the deposit and balance split should work is covered in the deposit piece.
What should happen when you cancel?
A full refund, without conditions, every time.
A guide cancelling for weather, mechanical failure or illness is the party that did not perform, and the client's money should come back in full.
Trying to retain a deposit in that situation is the single fastest way to turn a weather day into a dispute and a public review.
It is also the term that makes the rest of the policy credible, because a client accepting a strict cancellation ladder is much more likely to do so where the other side is unconditional.
Offer the alternative date first, since most clients prefer it, but the refund has to be genuinely available rather than the fallback you resist.
On a $650 trip with $200 taken, that means $200 back or the whole $650 if it was prepaid, promptly and without negotiation.
What the weather conversation should sound like is covered in the weather cancellation piece.
How should the tiers be structured?
Few, round, and tied to your resale window.
The right number of tiers is two or three, because a ladder nobody can remember is a ladder nobody relies on.
The boundaries should reflect how long it actually takes you to resell a date, which for most operations is measured in weeks in season and is much longer outside it.
A common shape is a full deposit refund beyond thirty days, half between fifteen and thirty, and none inside fourteen, which on a $200 deposit means $200, $100 and $0.
Peak dates justify a stricter ladder than shoulder dates, and saying so explicitly is better than applying a hidden exception.
And every tier should be stated in dollars rather than in percentages, because a client reading $100 understands it immediately and a client reading fifty per cent has to do arithmetic.
Why the peak weeks deserve different terms is covered in the cash flow piece.
What about a no-show?
Treat it as the strictest tier, and say so in advance.
A client who simply does not arrive has consumed the date as completely as one who fished it, and the whole booked amount is the honest position.
What causes trouble is having no term covering it, so a no-show becomes a conversation about fairness with somebody who is already embarrassed.
On a $650 day with $200 taken, a no-show term either leaves you with the $200 or entitles you to the full $650, and the agreement should say which.
The version most operations settle on is the deposit retained and the balance waived, which recovers something and ends the matter quickly.
Whichever you choose, the client should have read it before the date was held, because a term produced afterwards reads as a penalty invented on the spot.
How the reminder sequence reduces no-shows is covered in the trip reminder piece.
Does a transfer count as a refund?
Not for the client's purposes, and the distinction is worth respecting.
Moving a booking to another date preserves the relationship and costs you nothing when the original date resells, which makes it the first thing to offer.
It is not the same as a refund, though, and a policy that presents it as one is a policy that will be read as evasive.
The workable form states both: a transfer is available on these terms, and a refund is available on these other terms, with the client choosing.
Where a transfer is offered it needs its own boundaries, because an open-ended credit is a liability sitting on your books indefinitely.
A stated window, twelve months being a common one, converts an obligation with no end into one you can plan around.
Why an open-ended balance is a problem is covered in the voucher liability piece.
Should the policy differ by season?
Yes, and the reason is resale time rather than greed.
A cancelled peak Saturday in June resells quickly, and a cancelled Tuesday in late October may not resell at all.
Which means the loss from a late cancellation is genuinely larger outside the peak, and a single ladder either overcharges the peak or undercharges the shoulder.
The simple version is one ladder plus a named list of peak dates carrying a larger deposit, stated in dollars, so a client can see which they are booking.
On a $650 day that might be $200 ordinarily and $325 on named dates, which is transparent and defensible.
What is not defensible is applying the stricter terms without having named the dates, since that is the departure-from-published-terms problem again.
How the seasonal shape drives everything else is covered in the offseason piece.
What about groups?
Different arithmetic, and it needs its own paragraph.
A group booking removes several dates or several boats, so a late cancellation is a multiple of the single-trip loss and the ladder should reflect that.
Partial cancellations are the specific problem, because four anglers becoming two changes the economics of a day that is already committed.
The workable answer is a minimum number chargeable regardless, stated as a figure, so that a party shrinking does not become a negotiation on the dock.
On a $650 boat with a two-angler minimum, that is a floor of $650 whatever happens to the fourth person's plans.
None of that is unfriendly if it is written down before deposits are taken, and all of it is a fight if it is not.
How the group agreement should be built is covered in the group contracts piece.
Where does a policy go wrong?
In the gap between what it says and what you do.
Publishing terms and then departing from them, which is the exposure the general prohibition on deceptive practices is actually about.
Burying the policy where the client does not see it before paying, so the terms were never accepted in any meaningful sense.
Writing a policy in percentages and conditions nobody parses, which produces a client who thinks they are covered when they are not.
Leaving weather undefined, which makes it certain the argument will be about the most common cancellation cause you never addressed.
And refusing refunds when you were the one who cancelled, which converts an act of nature into a grievance about you.
How to present the terms in the flow is covered in the digital waiver piece.
What the client FAQ should answer is covered in the client FAQ piece.
What is the working policy?
Three tiers, one unconditional promise, a stated turnaround.
State the deposit in dollars, say plainly that it is non-refundable inside your stated window, and give the two or three boundaries in days.
Say what happens in rain, in lightning, in high water and in mechanical failure, since those are the four causes and the last two are yours.
Commit to a full refund whenever you cancel, and offer a transfer first because most clients prefer it.
Adopt a stated turnaround for issuing refunds, seven working days being a defensible one borrowed from the merchandise rule, and then meet it.
Put the whole thing in front of the client before they pay, keep a dated copy, and apply it consistently, because a term you departed from is the only real exposure here.
What the pricing conversation looks like alongside it is covered in the pricing piece.
How this was checked. The definition of covered sales as those in which the buyer has ordered merchandise from the seller by mail, via the internet or by telephone regardless of the method of payment or of solicitation, the definition of prompt refund as a refund sent by any means at least as fast and reliable as first class mail within seven working days of the date the buyer's right to refund vests together with its proviso for cases where the seller cannot refund by the method payment was tendered and its separate one billing cycle standard for one credit sale situation, the definition of receipt of a properly completed order, and the definitions of refund by payment method covering cash cheque or money order payments, credit sales where the seller or a third party is the creditor, and payments by other means with their respective notification requirements, all come from 16 CFR 435.1. The provision making it an unfair method of competition and an unfair or deceptive act or practice for a seller, in connection with mail, internet or telephone order sales in or affecting commerce, to solicit any order for the sale of merchandise without a reasonable basis to expect shipment within the time clearly and conspicuously stated or within thirty days where no time is stated, with fifty days where the buyer applies for credit, comes from 16 CFR 435.2. Part 435 was read on the Electronic Code of Federal Regulations on 26 July 2026, and every operative provision examined is limited to the sale and shipment of merchandise. The declaration that unfair methods of competition in or affecting commerce and unfair or deceptive acts or practices in or affecting commerce are unlawful, and the Commission's power and direction to prevent them subject to the stated institutional exclusions for banks, savings and loan institutions, federal credit unions, common carriers subject to the Acts to regulate commerce, air carriers, and persons insofar as they are subject to the Packers and Stockyards Act, come from 15 U.S.C. 45(a), read at the Office of the Law Revision Counsel and cross-checked against the copy of Title 15 published on govinfo. No state consumer protection statute was read and no position is taken on state cancellation or disclosure requirements. Card network operating rules were not read. All arithmetic uses stated illustrative figures and describes no real operation's policy.
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Get a free website previewWhy the merchandise rule does not reach a guided trip, what does, and how to build a ladder that holds
Does the FTC refund rule apply to a guided trip?
Its operative provisions do not. 16 CFR 435.1(a) defines the covered sales as those in which the buyer has ordered merchandise from the seller by mail, via the internet or by telephone, and 16 CFR 435.2 addresses soliciting orders for the sale of merchandise without a reasonable basis to expect shipment in the stated time. A guided day is neither merchandise nor shipped, so the timetable and refund mechanics do not attach to it.
Then what federal provision does reach it?
15 U.S.C. 45(a)(1) declares unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, to be unlawful. There is no merchandise limitation and no shipment requirement in that sentence. Subsection (a)(2) empowers the Commission to prevent such practices subject to stated institutional exclusions, none of which covers a guiding operation.
What is the rule's refund turnaround?
16 CFR 435.1(b)(1) defines a prompt refund, for most situations the rule covers, as one sent by any means at least as fast and reliable as first class mail within seven working days of the date the buyer's right to refund vests, with a proviso where the seller cannot refund by the original payment method. Paragraph (b)(2) sets a one billing cycle standard for one credit sale situation. None of it binds a service, and adopting the seven day figure makes a policy demonstrable.
What actually decides a refund dispute?
The agreement. Where a client reverses a card payment the relevant test asks whether the service was delivered as agreed, which sends everybody to the terms rather than to anybody's disappointment. An agreement that says a trip runs in rain but not in lightning has answered a question that would otherwise be opinion. One silent on weather has left the most common cancellation cause undefined.
Should the deposit be non-refundable?
Usually, and the reason is capacity rather than punishment. A booked day is removed from sale, and a late cancellation is a date you can no longer sell. On a $650 day a $200 deposit recovers roughly a third of that loss. What undermines it is refunding non-refundable deposits case by case, since a term departed from repeatedly stops being a term.
What should happen when the guide cancels?
A full refund, unconditionally. The guide is the party that did not perform, and retaining a deposit in that situation is the fastest route from a weather day to a dispute and a public review. Offer an alternative date first, because most clients prefer it, but the refund has to be genuinely available rather than the option you resist.
How many tiers should the ladder have?
Two or three, with boundaries reflecting how long a date actually takes to resell. A common shape on a $200 deposit is the full $200 back beyond thirty days, $100 between fifteen and thirty, and nothing inside fourteen. State each figure in dollars rather than as a percentage, and name any peak dates carrying stricter terms rather than applying a hidden exception.
Sources & methods
- 16 CFR part 435 on the Electronic Code of Federal Regulations, read for the definition of mail, internet or telephone order sales as sales in which the buyer has ordered merchandise from the seller by those means regardless of the method of payment or of solicitation; the definition of prompt refund as a refund sent by any means at least as fast and reliable as first class mail within seven working days of the vesting of the right, with the proviso for cases where the seller cannot refund by the method tendered and the separate one billing cycle standard for one credit sale situation; the definition of receipt of a properly completed order; the definitions of refund by payment method, covering cash cheque or money order payments, credit sales where the seller or a third party is the creditor, and payments by other means, each with its notification requirements; and the operative prohibition in section 435.2 on soliciting an order for the sale of merchandise without a reasonable basis to expect shipment within the time clearly and conspicuously stated or within thirty days where none is stated, extended to fifty days where the buyer applies for credit.
- 15 U.S.C. 45(a) at the Office of the Law Revision Counsel, read for the declaration that unfair methods of competition in or affecting commerce and unfair or deceptive acts or practices in or affecting commerce are unlawful, and for the Commission's power and direction to prevent them subject to the stated exclusions for banks, savings and loan institutions, federal credit unions, common carriers subject to the Acts to regulate commerce, air carriers, and persons insofar as they are subject to the Packers and Stockyards Act.
- The Title 15 volume published on govinfo, used as an independent copy of section 45 to confirm the statutory wording quoted above.
Every figure here is traced to a named public source and checked against it. Licensing, tax, and fee rules change. Verify your state’s current rules with the agency directly before you count on any number here.
Evan Knox
I build booking websites and run the ads and search for owner-run fishing guides, one operation per stretch of water. My first guide client, Bowman Fly Fishing, grew its revenue 4x in a year from that work. Field Notes is where I put the straight numbers on the business of guiding.
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