Why are Cancellation Policies Essential in eCommerce?

July 27, 2021
| by Rebecca Fox

Giving your customers the option to cancel their order early on can reduce your return rates and improve customer satisfaction. Learn why having a clear cancellation policy is a good idea for your online store.

Online shopping has become a popular form of shopping for a lot of consumers. The convenience of being able to shop from home or from a mobile device and have your order delivered straight to your house makes online shopping a convenient choice. So much so that 75% of online buyers shop online at least once a month. 

When shopping online, it is very common for customers to accidentally order the same item twice, to choose the wrong size or color, or to decide they were being impulsive and want to cancel the order. As a Shopify merchant, handling cancellations can be costly and take up precious time and energy, especially if you don’t have a well-defined cancellation policy in place.

If your customers are unsure of how they can cancel their order or if they can cancel it at all, they may become confused and discouraged from placing their order.

Here are a few reasons why your eCommerce store should offer the option to cancel orders:

5 Reasons to Have a Cancellation Policy

1. Save Yourself Time and Money

When there is no clear cancellation option, customers are likely to contact your support team to request to cancel their order. Without a clear cancellation policy in place, customers have no way of knowing whether their order is eligible to be canceled, and what kind of refund they are eligible to receive. Handling each order individually takes up your team’s time and energy that can be spent more efficiently.

Make sure your cancellation policy is prominently displayed on your store’s website, and clearly states the conditions for canceling an order. 

With a well-defined cancellation policy, your customers can know exactly what their options are and what they need to do if they want to cancel an order, making the whole process more efficient and convenient both for you and your customers. Customers won’t try to request to cancel ineligible orders, and you won’t need to individually explain your policy to each customer.

2. Keep Your Customers Happy

Customers are more confident about placing their order when they know they can cancel their order if they make a mistake in their order or no longer require it, and are reassured by having all the information about the cancellation time frame, fees, and process in advance.

Having a transparent cancellation policy helps retain customers and build customer loyalty.

3. Reduce Return Rates

Giving customers the option to cancel their order before it is fulfilled can cut down on future returns caused by mistakes or orders your customers changed their minds about.

30% of products ordered online are returned, so reducing your return rate can be significant for your store. By offering the option to cancel orders you save yourself and your customers a lot of time, money, and energy, and as a bonus, you reduce your carbon footprint by avoiding the redundant returns. 

4. Create Accountability

Informing your customers what to expect from the cancellation process helps them know what they need to do and what they can expect from you.

Clear cancellation policies can help prevent ambiguity and serve as proof of what was agreed upon when your customer made the purchase from your store.

For example, when customers are provided with a clear timeframe in which they can cancel an order, they won’t be surprised if they cannot cancel an order after the deadline. Make sure to be clear about how they can request a cancellation and if there is a cancellation fee. Your customers having all the relevant information in advance leaves a lot less room for misunderstandings.

5. Protect Your Business

A cancellation policy provides security to your business in the event that your customer cancels an order. You may reasonably charge a cancellation fee after a certain deadline, covering costs you suffered due to the cancellation. 


Customers are inevitably going to place orders they sometimes don’t end up wanting. Offering the option to cancel orders before they are fulfilled gives your store an advantage over your competitors, and customers will feel confident purchasing from you again and again. 

Every eCommerce store should have a clear cancellation policy, saving time and energy for both merchants and customers.

Our returns management system helps you easily offer your customers the option to cancel orders that have not been fulfilled based on your store’s cancellation policy.

Automate Returns & Exchanges

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