How to Bulletproof Your Refund Policy: A Creator’s Guide to EU & US Subscription Laws
Selling digital products, courses, and memberships to a global audience is an incredible way to build your online business.
But if you’re running recurring memberships or selling digital downloads internationally, there’s a good chance your refund policy has some gaps you don’t know about.
Creators spend enormous time building their products and funnels and almost no time on the legal side of how those products are sold.
The result is a refund policy that looks fine on the surface but doesn’t actually hold up when EU consumer protection law or state-level U.S. subscription rules enter the picture.
The good news: once you understand what applies to you and what it actually requires, the fixes are pretty straightforward.
In this post, I’m walking through the two biggest legal frameworks affecting digital creators right now, who they apply to, and exactly what language you can use to stay compliant. Your refund policy for digital products deserves more than a generic template, and by the end of this post, you’ll know why.
Who Do These Rules Apply To?
Understanding scope is step one, because a lot of creators either panic thinking every global law applies to them, or dismiss rules that actually do.
U.S. State Automatic Renewal Laws (ARLs) apply to anyone selling recurring subscriptions or memberships to consumers in states with active ARLs, this includes California, Illinois, Connecticut, and Minnesota. If you only sell one-time digital products with no recurring payment, these rules generally don’t apply to you.
The EU Consumer Rights Directive (CRD) applies if you’re based in the EU, or if your business actively targets EU consumers (more on this in a minute). But simply having a website that’s accessible globally does not automatically subject you to this EU law.
Here’s the practical test: you’re considered to be “targeting” EU consumers if you
- actively appeal to them by offering pricing in Euros,
- translating your site into EU languages,
- running targeted ad campaigns in EU countries, or
- using EU-specific domains like `.de` or `.fr`.
If you bill entirely in USD, communicate in English, and operate on a `.com`, your EU liability is significantly more limited. That said, if you’re actively marketing to EU audiences, these rules are worth understanding.
Digital Content vs. Digital Services: What’s the Difference?
This distinction matters specifically under the EU law, because it determines when you need a refund waiver and what they should say.
Digital Content is data produced and supplied in digital form, typically through a single act of supply. Examples include digital courses, PDFs, e-books, software, templates, and standalone audio or video files.
Digital Services involve continuous supply or ongoing involvement from the provider over a period of time. Subscriptions and memberships are classified as digital services. So are live webinars, online communities, and cloud-based tools.
Getting this classification right determines which language you need to use.
The EU Rules: Navigating the 14-Day Right of Withdrawal
EU consumers have a statutory 14-day window to cancel distance purchases (like those made online) without giving any reason. A general “no refund” policy in your terms and conditions does not automatically override this right, and that surprises a lot of creators.
For Digital Content (Downloads): You can fully exempt your products from the 14-day rule. However, to do this legally, the consumer must give “prior express consent” to begin the download during the 14-day window and explicitly acknowledge that they will lose their right of withdrawal by doing so. If you skip this step, a consumer could technically request a refund within 14 days even after downloading your product.
For Digital Services (Subscriptions and Memberships): You cannot completely waive the 14-day rule. If a buyer requests immediate access to your membership, they can have it. However, if they cancel within the first 14 days, you must provide a pro-rated refund for the days they didn’t use. You keep only the amount proportionate to the time they actually had access.
The U.S. Rules: State ARLs and the Click-to-Cancel Standard
On the U.S. side, the Federal Trade Commission’s federal “Click to Cancel” rule was voided by the Eighth Circuit Court of Appeals in 2025 on procedural grounds.
Because the rule was vacated procedurally rather than on the merits, the FTC has indicated it intends to bring it back after correcting the process.
In the meantime, state-level enforcement is where the action is, and states like California, Illinois, and Connecticut are actively using their authority to go after unfair subscription practices.
Here’s what U.S. state ARLs typically require:
Clear Pre-Purchase Disclosures. Before checkout, you must clearly state the subscription terms:
- the recurring price,
- the billing frequency, and
- how to cancel.
Burying this in your terms of service does not meet the “clear and conspicuous” standard.
One-Step Online Cancellation. If a consumer signs up for your membership online, they must be able to cancel online just as easily, through a prominently placed direct link or button. You can’t require them to email or call to cancel if they signed up through a click.
Renewal Notices. For trial conversions or long-term subscriptions, some states require written reminder notices alerting customers of an upcoming charge and explaining how to cancel before it happens. Personally, I’ve since moved all my subscription/split pay products to Stripe only (instead of also offering PayPal), because Stripe makes it easy to ensure these renewal notices are sent out.
Practical Actions: What to Include on Your Checkout pages and Invoices
The most common mistake I see is creators burying required waivers in their general Terms and Conditions. These need to be separate, visible at the point of purchase, and structured as unticked checkboxes that the buyer actively checks.
However your checkout page and terms are not the only place you need special language….
Under EU law, this waiver is legally void unless confirmed on a “durable medium” immediately after purchase. That means your automated post-purchase email needs to include a confirming note. For example, in Thrivecart, I would add it to the invoice.
So in practice your checkout page should have a checkbox for the customer to agree to the terms and a checkbox to agree to the applicable refund policies/waivers.
Then on your invoice or post purchase email you should be including a statement that confirms the consent the customer gave at checkout.
Universal Best Practices for Any Creator
If keeping up with every state ARL, EU directive, and FTC development sounds like more than you have bandwidth for, designing your checkout to meet the strictest standards is the safest path forward.
Be crystal clear upfront. Before the buyer enters payment information, disclose what they’re buying, the recurring price, the billing frequency, and how to cancel.
Never use pre-ticked boxes to enroll someone in a subscription.
Make cancellation as easy as signing up: if they signed up with a few clicks, they should be able to cancel with a few clicks, through a prominently placed link or button in their account.
Send reminder emails before trial conversions and annual renewals, and include a direct cancellation link every time.
Send a retainable receipt after every purchase with the terms, the cancellation policy, and a clear record of the consumer’s consent.
These aren’t just legal checkboxes. They’re also good business practices that reduce disputes, build trust, and lower your chargeback risk.
Bottom Line
Whether you’re navigating the EU’s 14-day right of withdrawal or U.S. state enforcement of what are essentially click-to-cancel standards, the underlying legal principle is the same: consumers should know what they’re buying, explicitly agree to it, and be able to exit easily if they change their mind.
Remember, most laws come about because people were shady, so most of compliance is about transparency and not being shady, which I think makes it a lot easier to approach. When in doubt, ask, “how can I make this crystal clear to my customer?”.
For refunds and waivers, be sure to:
- separate your legal waivers at checkout.
- make cancellation genuinely easy.
- send proactive renewal reminders.
- confirm consent in your post-purchase emails.
These steps take a few hours to implement and protect you from the kinds of complaints and chargebacks that can cause real problems down the road. Your refund policy for digital products is worth getting right.
Are you worried you might be missing other legal protections in your creator business? Refund policies and subscription laws are just the beginning. Make sure your business is fully covered with my free guide: Top 5 Legal Blindspots for Online Entrepreneurs. Grab it and get the legal peace of mind your business deserves.
If you’re looking for language to use to comply with the EU’s Right of Withdrawal standards (taking effect in June 2026), you can find it inside my Website Legal Templates Bundle.
Additional Resources
Have you updated your refund policy recently, or do you have questions about how these rules apply to your specific setup? Let me know in the comments!
