Can a business in South Africa have a "no refunds" policy?

No — a blanket "no refunds" policy is unlawful under the Consumer Protection Act. The CPA provides mandatory refund rights that cannot be excluded, limited, or waived. These include: refunds for defective goods within 6 months under Section 56 (the consumer chooses repair, replacement, or refund); refunds during the cooling-off period for direct marketing transactions under Section 16 (full refund, no penalty, no reason required); and the right to cancel fixed-term agreements under Section 14 with 20 business days' notice (subject only to a reasonable cancellation penalty). A business may legitimately limit refunds for specific categories — such as customised goods, perishables, sealed goods opened for hygiene reasons, or digital content that has been accessed — but even these limitations must be prominently disclosed before purchase. Any "no refunds" sign, policy, or clause that purports to override these statutory rights is void and may expose the business to complaints before the National Consumer Commission.

How is a "reasonable cancellation penalty" calculated under CPA Section 14?

The CPA does not prescribe a specific formula for calculating the reasonable cancellation penalty under Section 14 — it uses the word "reasonable" deliberately to allow flexibility based on the circumstances. However, the National Consumer Commission and consumer protection case law provide guidance. The penalty must reflect the supplier's actual direct costs of early termination — not a punitive amount designed to discourage cancellation. These direct costs may include: unrecouped setup or installation costs that the supplier incurred specifically for the consumer, the cost of any goods or services already delivered that cannot be recouped, and a reasonable calculation of the supplier's loss of expected profit for the remaining contract period. Common approaches include charging 10% to 20% of the remaining contract value, requiring payment of one to two months' subscription fees, or applying a declining penalty that decreases as the contract approaches its natural end date. The penalty must be disclosed upfront in the agreement — a surprise penalty that was not disclosed at the time of contracting is more likely to be found unreasonable.

What are my refund obligations for defective goods under the CPA?

Section 56 of the CPA provides consumers with a 6-month implied warranty for defective goods. If goods are defective — meaning they are not reasonably suitable for their intended purpose, not of good quality, not in good working order, or not free of defects — the consumer may return them within 6 months of delivery. Critically, the consumer — not the supplier — chooses the remedy: repair, replacement, or refund. The supplier cannot insist on repair when the consumer wants a refund, and cannot offer a credit note when the consumer wants a monetary refund. The supplier must respond within a reasonable time. If the goods are repaired and the same defect recurs within 3 months of the repair, or a different defect arises within 6 months, the consumer can reject the repair and demand a replacement or refund. This implied warranty cannot be excluded by contract — any clause stating "no warranty" or "sold as is" is void for consumer transactions under the CPA.

How long do I have to process a refund in South Africa?

The applicable timeline depends on the legal basis for the refund. For CPA refunds (cooling-off period under Section 16, defective goods under Section 56), the refund must be processed within 15 business days of the consumer exercising their right. For ECTA e-commerce cancellations under Section 44, the refund must be processed within 30 days of cancellation. The refund should be made using the same payment method the consumer used for the original transaction — if the consumer paid by credit card, the refund goes back to the credit card; if by EFT, the refund is paid by EFT. The consumer may agree to an alternative method (such as a store credit), but the supplier cannot unilaterally impose a credit note instead of a monetary refund. Failure to process refunds within the prescribed timeframes can result in complaints to the National Consumer Commission, interest on the overdue amount, and potential administrative penalties for the supplier.

What are my refund obligations for digital goods and SaaS services?

Digital goods and SaaS services present unique refund challenges because the "goods" cannot be physically returned. The cooling-off period under CPA Section 16 still applies to digital purchases made through direct marketing — but the right may be limited once digital content has been accessed, downloaded, or streamed, provided the consumer was clearly warned before purchase that the cooling-off right would be waived upon access, and the consumer expressly consented to this waiver. For SaaS subscriptions, the CPA Section 14 cancellation right applies — the consumer can cancel with 20 business days' notice and the refund should be calculated pro-rata for the unused portion of the billing period. Best practice for SaaS and digital content providers is to offer a free trial period (7 to 30 days) so consumers can evaluate the service before committing to payment — this reduces refund requests, builds trust, and demonstrates good faith in compliance with the CPA's spirit of consumer protection.

Can I charge a cancellation fee for subscription services?

Yes — but only a "reasonable" cancellation penalty as permitted by CPA Section 14(3)(b)(i). The penalty must reflect the supplier's actual direct costs of early termination, not a punitive amount designed to lock consumers into the subscription. The CPA requires that the cancellation penalty be disclosed at the time the consumer enters into the agreement — not imposed as a surprise when they try to cancel. If the penalty is not disclosed upfront, or if it is disproportionate to the supplier's actual costs, it is likely to be found unreasonable by the National Consumer Commission. For SaaS and subscription businesses, a common approach is to calculate the penalty as one month's subscription fee plus any unrecouped setup costs — this is generally considered reasonable. However, charging the entire remaining contract value as a "cancellation fee" is almost certainly unreasonable and would not survive a CPA challenge.

What is the difference between the CPA and ECTA cooling-off periods?

The CPA Section 16 cooling-off period applies to goods or services purchased as a result of "direct marketing" — which the CPA defines broadly as any approach to the consumer that is not initiated by the consumer. This includes most online sales (where the consumer responds to marketing), telemarketing, door-to-door sales, and catalogue sales. The cooling-off period is 5 business days from the date of delivery of goods or conclusion of the agreement for services. The ECTA Section 44 cooling-off period applies specifically to electronic transactions — purchases made through websites, apps, or other electronic means. The cooling-off period is 7 days from the date of delivery. Both periods apply simultaneously to e-commerce transactions, and the consumer benefits from whichever provides greater protection. In practice, for online purchases, the ECTA 7-day period is typically more favourable. One key difference: the CPA requires the refund within 15 business days, while ECTA allows up to 30 days.

Do I need to pay for return shipping when a customer cancels during the cooling-off period?

The CPA does not explicitly address who bears the cost of return shipping for cooling-off cancellations, and this remains an area of some interpretive uncertainty. ECTA Section 44(2) provides that the consumer must return the goods at their own cost — but this applies to ECTA cancellations, not CPA Section 16 cancellations. For CPA cooling-off cancellations, the prevailing view among consumer protection practitioners is that requiring the consumer to bear return shipping costs is permissible, provided this is disclosed before the transaction is concluded. However, the National Consumer Commission has indicated that any costs imposed on the consumer during the cooling-off period should not be so burdensome as to effectively discourage cancellation — a principle consistent with the CPA's purpose of protecting consumers. Best practice is to clearly disclose the return shipping policy before purchase and to keep any charges reasonable. Some businesses absorb return shipping as a goodwill measure to reduce consumer complaints.

How do I handle refunds for services already rendered?

Where a consumer cancels a service agreement (under Section 14 or the cooling-off period under Section 16), the supplier is not required to refund the value of services already rendered before the cancellation. The CPA distinguishes between the cancellation right (which is prospective — ending the obligation to provide future services) and the refund right (which applies to amounts paid for services not yet rendered). For subscription services, the refund should be calculated pro-rata — the consumer pays for the period during which they received the service and receives a refund for the unused portion. For project-based services, the supplier is entitled to charge for work completed at the agreed rate, with the refund applying to the unperformed portion. The key principle is that the supplier should be placed in the position they would have been in had the agreement been performed for the period up to cancellation — they should not profit from the cancellation, but they should not bear a loss for services they have legitimately provided.

What records should I keep of refund and cancellation transactions?

Maintaining detailed records is essential for both regulatory compliance and dispute resolution. You should retain: (1) the original transaction record (purchase date, amount, payment method, items or services purchased); (2) the cancellation or refund request (date received, channel, reason if provided, consumer's details); (3) internal processing records (who handled the request, what was decided, the basis for the decision, any communication with the consumer); (4) the refund transaction record (amount refunded, method, date processed, reference number); (5) any correspondence with the consumer regarding the cancellation or refund; and (6) copies of any goods inspection reports for defective returns. Under the CPA, these records should be retained for at least 3 years (the prescription period for consumer claims). Under the Income Tax Act, financial records including refund transactions must be retained for 5 years from the date of submission of the relevant tax return. Under POPIA, personal information in these records must be secured and only retained for as long as necessary.

Can I offer store credit instead of a monetary refund?

The answer depends on the legal basis for the refund. For statutory refunds under the CPA (defective goods under Section 56, cooling-off cancellations under Section 16), the consumer is entitled to a monetary refund — the supplier cannot unilaterally impose a store credit, voucher, or exchange. The consumer may agree to accept a store credit as an alternative, but the choice must be the consumer's, not the supplier's. For goodwill refunds (returns that are not required by law — for example, a change-of-mind return outside the cooling-off period where the supplier voluntarily accepts the return), the supplier can offer a store credit, exchange, or voucher instead of a monetary refund, provided this was disclosed in the policy. Under CPA Section 17, prepaid certificates, credits, and vouchers must be redeemable for at least 3 years from the date of issue — so store credits cannot expire in less than 3 years. Best practice is to always offer the consumer the choice between a monetary refund and a store credit for statutory refunds.

Contract TemplateClickwrap Agreements

Refund & Cancellation Policy
Template — South Africa

An attorney-drafted Refund & Cancellation Policy template designed specifically for South African businesses. This comprehensive, legally compliant document sets out the terms under which customers can cancel purchases and receive refunds — covering the mandatory 5-business-day cooling-off period under CPA Section 16, fixed-term agreement cancellation rights under CPA Section 14, the 6-month implied warranty for defective goods under CPA Section 56, ECTA e-commerce cancellation provisions, pro-rata refund calculations for subscription services, and the treatment of digital goods and SaaS products. Built for e-commerce platforms, SaaS providers, subscription businesses, and any South African business that must comply with the Consumer Protection Act.

Join Waiting List See What's Included

Drafted by qualified South African attorneys

Reviewed for compliance with current legislation · Last updated April 2026

Why It Matters

Why Your Business Needs This Agreement

Unlawful "No Refunds" Policy Exposing the Business to Regulatory Action

Many South African businesses still display "no refunds" signs or include blanket refund exclusions in their terms — either out of ignorance of the CPA or a mistaken belief that the policy is enforceable. These policies are void under the CPA and expose the business to complaints to the National Consumer Commission, investigation by the NCC's inspectors, and potential administrative penalties. The National Consumer Commission has publicly stated that "no refunds" policies are one of the most common CPA violations they encounter. A compliant Refund & Cancellation Policy that explains both the consumer's statutory rights and the legitimate exclusions is essential.

Insisting on Repair When the Consumer Wants a Refund

Under CPA Section 56, when goods are defective within 6 months, the consumer — not the supplier — chooses between repair, replacement, or refund. Many businesses insist on attempting repair first, or offer only a credit note instead of a monetary refund. This is a direct contravention of the CPA and a frequent source of consumer complaints. The National Consumer Commission has confirmed that suppliers cannot impose their preferred remedy — the choice belongs to the consumer. A compliant policy must clearly state this consumer right and train staff to honour it.

Excessive Cancellation Penalties Deterring Lawful Cancellation

Some subscription and membership businesses impose cancellation penalties equal to the full remaining contract value — effectively making cancellation financially prohibitive. Under CPA Section 14, cancellation penalties must be "reasonable" — reflecting the supplier's actual direct costs, not a punitive amount. The National Consumer Commission has indicated that penalties exceeding the supplier's genuine direct costs are unreasonable and unenforceable. A penalty clause that charges the full remaining subscription amount will likely be struck down, leaving the business with no enforceable penalty at all.

No Cooling-Off Period Disclosure for Online Sales

E-commerce businesses that fail to inform consumers of their cooling-off rights (5 business days under CPA Section 16 and 7 days under ECTA Section 44) before concluding the transaction are non-compliant with both statutes. ECTA Section 43 specifically requires pre-transaction disclosure of the cooling-off period. The absence of this disclosure does not eliminate the consumer's cooling-off rights — it merely means the business has compounded its non-compliance. A compliant Refund & Cancellation Policy, prominently linked during the checkout process, addresses this requirement.

Delayed Refund Processing Triggering Consumer Complaints

Businesses that take weeks or months to process refunds — exceeding the CPA's 15-business-day and ECTA's 30-day timelines — face escalating consumer complaints, negative online reviews, and potential NCC investigation. Slow refund processing is often a systemic issue caused by unclear internal procedures, manual processing, or insufficient staff authority to approve refunds. A clear Refund & Cancellation Policy with defined processing timelines, responsibilities, and escalation procedures reduces processing time, improves consumer satisfaction, and demonstrates compliance with statutory deadlines.

Subscription Auto-Renewal Without Adequate Notice

CPA Section 14(2)(b) requires suppliers to give consumers notice of the impending expiry and renewal of fixed-term agreements at least 40 to 80 business days before the renewal date. Many subscription businesses auto-renew without adequate notice, which gives the consumer the right to cancel the renewed agreement without penalty — effectively treating the renewal as a new agreement concluded without proper disclosure. A compliant Refund & Cancellation Policy, combined with a proper renewal notification process, prevents this exposure.

What is a Refund & Cancellation Policy?

South African consumer protection legislation provides some of the most comprehensive cancellation and refund rights in the world — and businesses that fail to understand and comply with these rights face regulatory action from the National Consumer Commission, consumer complaints, negative publicity, and potential class action liability. The Consumer Protection Act 68 of 2008 (CPA) creates a framework of mandatory consumer rights that cannot be contracted away, limited, or waived — any business policy that purports to exclude or restrict these rights is void to the extent of the inconsistency.

The most significant CPA provisions affecting refund and cancellation policies are: Section 16, which provides a mandatory 5-business-day cooling-off period for goods or services purchased as a result of direct marketing (which includes most online sales, telemarketing, and door-to-door sales), during which the consumer can cancel without penalty and receive a full refund; Section 14, which gives consumers the right to cancel any fixed-term agreement (including subscriptions, memberships, and recurring service contracts) with 20 business days' written notice, subject to a "reasonable" cancellation penalty; Section 56, which provides a 6-month implied warranty for defective goods, entitling the consumer to choose between repair, replacement, or refund — at the consumer's choice, not the supplier's; Section 54, which requires services to be performed in a manner and quality that persons are generally entitled to expect; and Section 20, which gives consumers the right to return goods and receive a refund in specific circumstances.

For e-commerce businesses, the Electronic Communications and Transactions Act 25 of 2002 (ECTA) provides additional protections. Section 44 gives consumers a 7-day cooling-off period for goods purchased through electronic transactions, during which they may cancel and return goods for a full refund without penalty. This ECTA cooling-off period applies in addition to the CPA's Section 16 cooling-off period — the consumer benefits from whichever provides greater protection in the circumstances.

The interplay between the CPA, ECTA, and the National Credit Act 34 of 2005 (NCA) creates further complexity for businesses that offer credit-financed purchases. Where a purchase is cancelled during the cooling-off period, the associated credit agreement must also be unwound — and the NCA's provisions on early settlement and cooling-off interact with the CPA's refund obligations.

A well-drafted Refund & Cancellation Policy serves two critical functions. First, it informs customers of their statutory rights in plain, accessible language — as required by the CPA's plain language provisions under Section 22. Second, it establishes the operational procedures and timelines that the business will follow when processing cancellations and refunds, creating internal consistency and reducing the risk of ad hoc decisions that may inadvertently breach the CPA. The policy does not replace the CPA — it explains and implements it.

This attorney-drafted template is compliant with the Consumer Protection Act 68 of 2008 (Sections 14, 16, 17, 20, 44, 54, 55, 56), the Electronic Communications and Transactions Act 25 of 2002 (Sections 43-44), the National Credit Act 34 of 2005 (where applicable to credit-financed purchases), and the Protection of Personal Information Act 4 of 2013 (for handling personal information during the cancellation and refund process).

Who Needs This

E-commerce businesses selling goods or services online — subject to both CPA and ECTA cooling-off and cancellation provisions

SaaS and subscription-based service providers — subject to CPA Section 14 fixed-term agreement cancellation rights

Online marketplace operators and platform providers that facilitate transactions between buyers and sellers

Brick-and-mortar retailers processing returns, exchanges, and refund requests under the CPA's implied warranty provisions

Digital content providers (e-books, software, online courses) navigating the intersection of cooling-off rights and digital delivery

Membership-based businesses (gyms, clubs, professional associations) subject to CPA Section 14 cancellation provisions

Any South African business that supplies goods or services to consumers and must comply with the Consumer Protection Act

Businesses offering subscription boxes, recurring deliveries, or auto-renewal services to South African consumers

Want early access to the Refund & Cancellation Policy template?

Join Waiting List

We'll email you the moment early access opens

CPA Section 16 provides a mandatory 5-business-day cooling-off period for direct marketing transactions (including most online sales) — this right cannot be waived or contracted away

A blanket "no refunds" policy is unlawful under the CPA — the National Consumer Commission has identified this as one of the most common CPA violations in South Africa

Under CPA Section 56, the consumer — not the supplier — chooses between repair, replacement, or refund for defective goods within 6 months of delivery

ECTA Section 44 provides an additional 7-day cooling-off period for e-commerce transactions, with a 30-day refund processing deadline

Fixed-term agreements (subscriptions) cannot exceed 24 months, and the supplier must give 40-80 business days' notice before automatic renewal under CPA Section 14

Template Contents

Key Clauses Included

This Refund & Cancellation Policy template covers 11 essential sections, each drafted by South African attorneys.

Cooling-Off Period — Direct Marketing Transactions (CPA Section 16)

The mandatory 5-business-day cooling-off period for goods or services purchased as a result of direct marketing — which the CPA defines broadly to include online sales, telemarketing, catalogue sales, and any unsolicited approach to the consumer. This section explains the consumer's unconditional right to cancel within 5 business days without providing a reason and without penalty, the procedure for exercising this right (written notice to the supplier), the consumer's obligation to return goods in the condition received, the supplier's obligation to refund all amounts paid within 15 business days of receiving the returned goods, and the treatment of return shipping costs.

E-Commerce Cooling-Off Period (ECTA Section 44)

The additional 7-day cooling-off period provided by ECTA for goods purchased through electronic transactions. This section explains how the ECTA cooling-off period interacts with the CPA's Section 16 period (the consumer benefits from whichever provides greater protection), the specific requirements for e-commerce cancellation (the consumer must notify the supplier within 7 days of receiving the goods), the supplier's obligation to refund within 30 days of cancellation under ECTA, and the e-commerce-specific return procedures including return shipping responsibility.

Cancellation of Fixed-Term Agreements (CPA Section 14)

The consumer's statutory right to cancel any fixed-term agreement — including subscriptions, memberships, service contracts, and recurring billing arrangements — with 20 business days' written notice. This section explains: the definition of a fixed-term agreement under the CPA, the maximum permitted duration (24 months), automatic renewal provisions and the consumer's right to opt out of renewal, the "reasonable" cancellation penalty that the supplier may charge (which must reflect the supplier's actual direct costs, not a punitive amount), and the supplier's obligations upon receiving a cancellation notice — including ceasing services, providing a final invoice, and refunding any credit balance.

Defective Goods — Implied Warranty (CPA Section 56)

The consumer's right to return defective goods within 6 months of delivery for repair, replacement, or refund — at the consumer's choice, not the supplier's. This section defines what constitutes a "defect" under the CPA (goods that are not reasonably suitable for their intended purpose, not of good quality, not in good working order, or not free of defects), the 6-month window for exercising this right, the procedure for returning defective goods, the supplier's obligation to respond within a reasonable time, and the critical point that the consumer — not the supplier — chooses the remedy. The supplier cannot insist on repair when the consumer wants a refund.

Refund Eligibility & Exclusions

Clear, CPA-compliant criteria for when refunds are and are not available — avoiding the unlawful "no refunds" approach while legitimately excluding categories where refunds are not required by law. Legitimate exclusions include: goods that have been altered, damaged, or used beyond reasonable inspection; perishable goods that have deteriorated; custom-made or personalised goods manufactured to the consumer's specifications; sealed goods that have been opened where opening makes return impractical for hygiene or safety reasons; and digital content that has been downloaded or streamed (where the consumer was warned before purchase and consented to waive the cooling-off right). Each exclusion must be prominently disclosed before purchase.

Pro-Rata Refund Calculations for Subscriptions

Detailed methodology for calculating refunds when subscription or recurring billing services are cancelled mid-cycle. Covers: pro-rata calculation based on the unused portion of the current billing period, the treatment of advance payments and prepaid periods, whether credits are issued as monetary refunds or account credits (monetary refunds are preferred under CPA principles), the handling of discounted introductory periods (if the consumer cancels during a discounted period, the refund is based on the discounted rate, not the full rate), and the treatment of bundled services where only some components are cancelled.

Cancellation Procedures & Required Information

Step-by-step process for submitting a cancellation request — including the required information (order number, account details, reason for cancellation if voluntarily provided), the channels for submission (email, online form, phone, in-person), the confirmation timeline (the business must acknowledge the cancellation request within a specified period), the access termination process for digital services (when the account is deactivated and how data is handled), and POPIA compliance for personal information processing during the cancellation and refund process.

Refund Methods & Processing Timelines

How refunds are processed and the applicable timelines. The CPA requires refunds to be processed within 15 business days. ECTA requires e-commerce refunds within 30 days of cancellation. This section specifies the refund method (original payment method by default, with alternatives if the original method is unavailable), the timeline for different refund types (credit card refunds may take 5-10 business days to appear after processing), the treatment of refunds for different payment methods (EFT, credit card, debit order, cash), and the supplier's communication obligations — keeping the consumer informed of the refund status at each stage.

Digital Goods & SaaS-Specific Provisions

Addresses the unique challenges of refunds for digital goods and SaaS services — products that cannot be "returned" in the traditional sense. The cooling-off period still applies to digital purchases made through direct marketing, but the right may be limited once the digital content has been accessed — provided the consumer was clearly warned before purchase and consented to waive the cooling-off right. For SaaS subscriptions, the CPA Section 14 cancellation right applies regardless of the digital nature of the service. The section addresses free trial periods, the transition from trial to paid subscription, and the refund treatment when a paid subscription follows a free trial.

Complaint Escalation & Regulatory Recourse

Explains the consumer's options if they are dissatisfied with the outcome of a refund or cancellation request — including the internal complaints escalation process, the right to lodge a complaint with the National Consumer Commission (NCC), the right to approach the relevant industry ombud (where applicable), and the right to refer the matter to the Consumer Tribunal. This section demonstrates compliance with the CPA's dispute resolution framework and shows good faith — businesses that provide clear escalation paths typically face fewer formal complaints.

Policy Updates & Consumer Notification

How consumers are notified of changes to the Refund & Cancellation Policy — including the notification mechanism (email, website notice), the effective date of changes, and whether changes apply retrospectively to existing orders or only to future transactions. Under the CPA, material changes to the terms of a fixed-term agreement require consumer notification and may trigger additional cancellation rights.

Legal Compliance

South African Law Compliance

CPA

Consumer Protection Act 68 of 2008

The CPA is the primary legislation governing refunds and cancellations in South Africa, and its provisions cannot be contracted away. Section 14 provides the right to cancel fixed-term agreements with 20 business days' notice, subject to a reasonable cancellation penalty. Section 16 provides a mandatory 5-business-day cooling-off period for direct marketing transactions (which includes most online sales), with full refund and no penalty. Section 17 prohibits prepaid certificates and credits from expiring in less than 3 years. Section 20 provides the right to return goods in specified circumstances. Section 44 regulates direct marketing requirements. Section 54 requires services to be performed in a manner and quality that persons are generally entitled to expect. Section 55 requires goods to be reasonably suitable for their intended purpose, of good quality, in good working order, and free of defects. Section 56 provides a 6-month implied warranty for defective goods, with the consumer choosing between repair, replacement, or refund.

ECTA

Electronic Communications and Transactions Act 25 of 2002

ECTA provides additional protections for e-commerce transactions. Section 43 requires online suppliers to disclose specific information before concluding an electronic transaction — including the full price, delivery costs, payment methods, and the cooling-off period. Section 44 provides a 7-day cooling-off period for electronic transactions, during which the consumer may cancel and return goods for a full refund. The supplier must process the refund within 30 days of cancellation. These ECTA protections apply in addition to CPA protections — the consumer benefits from whichever provides greater protection. Section 43(5) requires the supplier to provide an opportunity to review the entire transaction, correct mistakes, and withdraw from the transaction before finalising it.

NCA

National Credit Act 34 of 2005

The NCA is relevant where purchases are financed through credit agreements, instalment sale agreements, or buy-now-pay-later arrangements. When a consumer cancels a credit-financed purchase during the cooling-off period, the associated credit agreement must also be unwound — and the consumer is entitled to a refund of any amounts paid, including any credit insurance premiums for the unused period. Section 121 provides for the consumer's right to settle a credit agreement early, and the credit provider may not charge a settlement penalty that exceeds the amount permitted by the Act. These NCA provisions interact with the CPA's cancellation rights and must be reflected in the Refund & Cancellation Policy for businesses offering credit-financed sales.

POPIA

Protection of Personal Information Act 4 of 2013

POPIA is relevant to the processing of personal information during the cancellation and refund process. When a consumer cancels a service, the business must handle their personal information in accordance with POPIA — including determining whether the information must be retained (for legal or tax compliance purposes) or deleted (if no further lawful basis for processing exists). Section 14's retention limitation condition requires that personal information be destroyed when it is no longer necessary for the purpose for which it was collected. The Refund & Cancellation Policy should address how consumer data is handled upon cancellation, what information is retained and for how long, and the consumer's right to request deletion of their personal information.

CPA Regulations

Consumer Protection Act Regulations (GN R293 of 2011)

The CPA Regulations provide operational detail for implementing the Act's refund and cancellation provisions. Regulation 5 addresses the reasonable cancellation penalty for fixed-term agreements, confirming that it must not exceed the supplier's actual direct costs of early termination. The Regulations also address the form of cancellation notices, the supplier's obligation to acknowledge receipt of cancellation requests, and the treatment of prepaid amounts upon cancellation. These Regulations must be read together with the Act to ensure the Refund & Cancellation Policy is fully compliant.

South African businesses are lining up for My-Contracts — be first in when we launch

Join Waiting List

POPIA CompliantLegally ReviewedDigital Signing Available

Simple Process

Create Your Refund & Cancellation Policy in Minutes

Our guided wizard walks you through every clause — no legal knowledge required. Attorney-drafted, South African law compliant.

Identify your business model and applicable CPA/ECTA provisions

Before completing the template, determine which CPA and ECTA provisions apply to your business: Do you sell online (triggering cooling-off periods under both Section 16 and ECTA Section 44)? Do you offer subscriptions or fixed-term agreements (triggering Section 14 cancellation rights)? Do you sell physical goods (triggering Section 56 implied warranty)? Do you sell digital goods or SaaS (requiring digital-specific refund provisions)? Do you offer credit-financed purchases (triggering NCA interactions)? The answers determine which sections of the template to complete and customise.

Define your operational refund and cancellation procedures

Map out the internal process: How will customers submit cancellation requests? Who reviews and approves refund requests? What is the processing timeline for different refund types? How are defective goods inspected? What systems process the refund payment? How is the consumer kept informed of the refund status? These operational decisions must be documented in the policy to ensure consistency across your team and to meet the CPA's processing timelines.

Calculate your reasonable cancellation penalty (if applicable)

If you offer subscription or fixed-term agreements, determine the reasonable cancellation penalty under CPA Section 14. Document the actual direct costs that the penalty is intended to recoup — setup costs, unrecouped discounts, committed third-party costs. Ensure the penalty is proportionate and can be justified if challenged by the National Consumer Commission. Consider a declining penalty structure that decreases as the contract progresses.

Complete the template with your specific terms and procedures

Work through the template, completing every bracketed field with your specific cancellation channels, refund processing timelines, cancellation penalty calculations, digital goods provisions, and complaint escalation contacts. Ensure the policy is in plain language as required by CPA Section 22 — avoid legal jargon and use clear, consumer-friendly language. Have a non-legal team member read the policy to test its clarity.

Implement, train, and link the policy prominently

Publish the policy on your website and link it prominently — from the footer, during the checkout process, in order confirmation emails, and within subscription sign-up flows. Train all customer-facing staff on the statutory refund and cancellation rights, the internal processing procedures, and the escalation path for disputed requests. Conduct quarterly reviews to ensure the policy remains compliant with any CPA or ECTA amendments and that actual practice matches the documented policy.

Your Refund & Cancellation Policy is ready

Common Questions

Frequently Asked Questions

South African law provides two overlapping cooling-off periods. First, under CPA Section 16, consumers who purchase goods or services as a result of direct marketing (which includes most online sales, telemarketing, catalogue sales, and door-to-door sales) have 5 business days to cancel the transaction without providing a reason and without penalty, and receive a full refund. Second, under ECTA Section 44, consumers who purchase goods through electronic transactions (e-commerce) have 7 days to cancel and return goods for a full refund. These are statutory rights that cannot be waived, contracted away, or limited by the supplier — any clause in a Refund Policy that purports to exclude the cooling-off period is void under the CPA. The consumer benefits from whichever cooling-off period provides greater protection in the circumstances. The supplier must process the refund within 15 business days (CPA) or 30 days (ECTA) of receiving the returned goods.

Why This Template

What You Get With This Template

Drafted specifically for South African consumer protection law — fully compliant with CPA Sections 14, 16, 20, 44, 54, 55, 56 and ECTA Sections 43-44

Clearly distinguishes between mandatory statutory refund rights (which cannot be excluded) and legitimate exclusions — preventing unlawful "no refunds" exposure

CPA Section 14 cancellation provisions with guidance on calculating a reasonable cancellation penalty that will survive NCC scrutiny

Dual cooling-off period coverage for e-commerce businesses — both CPA Section 16 (5 business days) and ECTA Section 44 (7 days)

Pro-rata refund calculation methodology for subscription and SaaS businesses — with worked examples to prevent disputes

Digital goods and SaaS-specific provisions addressing the unique challenges of refunding non-returnable digital products

Complaint escalation path including NCC, industry ombud, and Consumer Tribunal — demonstrating good faith and reducing formal complaint risk

Plain language throughout as required by CPA Section 22 — accessible to consumers without legal knowledge

Related Templates

You May Also Need

SaaS Terms of Service

View template →

Website Terms and Conditions

View template →

Service Level Agreement (SLA)

View template →

Refund & Cancellation PolicyTemplate — South Africa

Why Your Business Needs This Agreement

Unlawful "No Refunds" Policy Exposing the Business to Regulatory Action

Insisting on Repair When the Consumer Wants a Refund

Excessive Cancellation Penalties Deterring Lawful Cancellation

No Cooling-Off Period Disclosure for Online Sales

Delayed Refund Processing Triggering Consumer Complaints

Subscription Auto-Renewal Without Adequate Notice

What is a Refund & Cancellation Policy?

Who Needs This

Key Clauses Included

Cooling-Off Period — Direct Marketing Transactions (CPA Section 16)

E-Commerce Cooling-Off Period (ECTA Section 44)

Cancellation of Fixed-Term Agreements (CPA Section 14)

Defective Goods — Implied Warranty (CPA Section 56)

Refund Eligibility & Exclusions

Pro-Rata Refund Calculations for Subscriptions

Cancellation Procedures & Required Information

Refund Methods & Processing Timelines

Digital Goods & SaaS-Specific Provisions

Complaint Escalation & Regulatory Recourse

Policy Updates & Consumer Notification

South African Law Compliance

Create Your Refund & Cancellation Policy in Minutes

Identify your business model and applicable CPA/ECTA provisions

Define your operational refund and cancellation procedures

Calculate your reasonable cancellation penalty (if applicable)

Complete the template with your specific terms and procedures

Implement, train, and link the policy prominently

Frequently Asked Questions

What is the cooling-off period under South African law?

Can a business in South Africa have a "no refunds" policy?

How is a "reasonable cancellation penalty" calculated under CPA Section 14?

What are my refund obligations for defective goods under the CPA?

How long do I have to process a refund in South Africa?

What are my refund obligations for digital goods and SaaS services?

Can I charge a cancellation fee for subscription services?

What is the difference between the CPA and ECTA cooling-off periods?

Do I need to pay for return shipping when a customer cancels during the cooling-off period?

How do I handle refunds for services already rendered?

What records should I keep of refund and cancellation transactions?

Can I offer store credit instead of a monetary refund?

What You Get With This Template

You May Also Need

Be First to Draft Your Refund & Cancellation Policy

Refund & Cancellation Policy
Template — South Africa