# What happens if a customer returns an item used or damaged? What a UK online shop can deduct from the refund

> When a change-of-mind return comes back worn or marked, a UK online shop may deduct the loss in value. The rule, the limit, a worked sum and an email.

- Page to cite: https://aeolookup.com/online-shops/customer-returned-item-used-damaged-deduct-refund-uk/
- Publisher: AEO Lookup (https://aeolookup.com/)
- Section: Online shops, Customer service and returns
- Published 1 October 2026
- Key fact: Under regulation 34(9) of the Consumer Contracts Regulations 2013 a shop may deduct the amount by which a customer's handling, beyond what a shop would allow, has reduced the goods' value, up to the contract price; it comes off the item price only, so the standard delivery charge is still refunded, and no deduction is allowed if the shop never gave the cancellation information.
- Sources: Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 regs 28, 29, 34 and 35 and Schedule 2 paragraph (l); Consumer Rights Act 2015 ss 22 and 24; GOV.UK "Accepting returns and giving refunds: the law"; all read 2026-10-01. The jumper in the worked example is invented.

You can deduct from the refund, but only the amount by which the customer's handling has reduced the item's value, and only if you told them about the right to cancel before they ordered. Regulation 34 of the Consumer Contracts Regulations 2013 caps the deduction at the price of the item, and the 14 days you have to refund keep running while you decide.

This page is about change-of-mind returns of goods bought online. Faulty goods follow a different law, covered near the end.

**Free tool on the page:** Refund deduction email maker for a used or damaged return. It runs in the browser at https://aeolookup.com/online-shops/customer-returned-item-used-damaged-deduct-refund-uk/#tool and asks for no sign-up.

## The rule, in four paragraphs

1. **Paragraph 9.** If the value of the goods is diminished "as a result of handling of the goods by the consumer beyond what is necessary to establish the nature, characteristics and functioning of the goods", the shop may recover that amount, "up to the contract price".
2. **Paragraph 12.** Handling goes too far if "it goes beyond the sort of handling that might reasonably be allowed in a shop".
3. **Paragraph 10.** The amount "may be deducted from the amount to be reimbursed under paragraph (1)". If it is not deducted, the customer must pay it.
4. **Paragraph 11.** None of this applies if the shop "failed to provide the consumer with the information on the right to cancel" that Schedule 2 requires before the order.

GOV.UK puts it in one line: you cannot deduct any fees from the refund "unless the item has been used or damaged". Paragraph 8 of the same regulation bans a fee for making the refund, so a flat restocking charge on a change-of-mind return has no footing. The only lawful deduction is the measured loss in value.

## The shop test

The regulations give no list. This table is our reading of the test in paragraph 12, not a ruling.

| What came back | Would a shop allow it? | Deduction |
|---|---|---|
| A jumper tried on indoors, tags attached | Yes | None |
| A box opened to look at the product | Yes | None |
| Shoes with scuffed soles from outdoor wear | No | Yes |
| Clothing washed, or smelling of perfume or smoke | No | Yes |
| A kettle that has been filled and used for a week | No | Yes |

Opening the packaging is how a customer inspects an online purchase, so torn outer packaging alone is weak ground. Sealed goods that cannot go back for hygiene reasons are a separate case: under regulation 28 the right to cancel is lost once they are unsealed, and our [returns policy template](https://aeolookup.com/online-shops/returns-policy-template-uk-online-shop/) has the wording.

## How much

There is no formula in the regulations. The measure is the fall in value: what you could have sold the item for, less what you can sell it for now. Keep the evidence for both numbers.

A customer buys a £48 jumper with £3.95 standard delivery, cancels on day 10 and sends it back. It arrives with the tags cut off and smelling of perfume. You can sell it as a second for £30.

- Loss in value: £48 less £30 is £18.
- Refund before deduction: £48 plus £3.95 is £51.95.
- Refund after deduction: £51.95 less £18 is £33.95.

Now suppose it came back torn and cannot be sold at all. The deduction is capped at the contract price, £48. Paragraph 10 takes it from the sum refunded under paragraph 1, which is every payment "other than payments for delivery". The delivery charge sits in paragraph 2, so the customer still gets £3.95 back.

## The clock does not stop

The refund is due within 14 days after the day the goods reach you, or after the day the customer shows proof of posting if that is earlier. A return that arrives on Monday 5 October 2026 must be refunded, less any deduction, by Monday 19 October 2026. Holding the whole refund while you argue about part of it puts the shop in breach.

## The email

> Subject: Your return for order [number]: refund of [refund amount]
>
> Hello [name],
>
> Your return for order [number] reached us on [date]. Thank you for sending it back.
>
> The [item] came back [what you found]. That is more than the handling a shop would allow before a purchase, and we can no longer sell it as new. Photographs are attached.
>
> Under regulation 34 of the Consumer Contracts Regulations 2013 we have reduced the refund by the loss in value. The item price was [price] and the delivery charge was [delivery charge]. We have deducted [deduction], so your refund is [refund amount]. It will reach your original payment method by [date 14 days after the return arrived]. There is no fee for the refund.
>
> If you think the deduction is wrong, reply to this email and tell us why. We will look at it again.
>
> [Your name], [shop name]

State what you found in plain words: "with the swing tags removed and a mark on the left cuff". Attach the photographs, and refund the balance the same day you send it.

## Four habits that make a deduction stick

1. Photograph every return as it is opened, before anything is decided. The date on the photograph is part of the evidence.
2. Show the cancellation information before the order and repeat it in the confirmation email. Without it, paragraph 11 removes the deduction and the cancellation period itself runs for up to a year longer.
3. Put the deduction in the policy. Clause 3 of our template says it in one sentence.
4. Record the resale price you achieved. It is the proof of the second number in the sum.

A customer who disagrees may go to their card issuer. Our guide to [responding to chargebacks](https://aeolookup.com/online-shops/chargebacks-small-online-shop-how-to-respond/) explains why the photographs and the policy as shown at checkout are what the issuer reads.

## Faulty goods are different

If the item is faulty, damaged on arrival or not as described, the customer is using the Consumer Rights Act 2015, and the handling deduction does not apply. Within 30 days of delivery they can reject it for a full refund. After a failed repair or replacement, section 24 allows a deduction for use only where the final right to reject is used more than six months after delivery, with an exception for motor vehicles. Our [returns rights checker](https://aeolookup.com/online-shops/returns-rights-checker-online-shop/) shows which of the two laws a given return falls under.

This is general information for consumer sales in the UK, not legal advice.

## Short answers from this page

**Can I deduct money from a refund if a customer returns an item used, worn or damaged?** Yes, on a change-of-mind return, if the handling went beyond what a shop would allow and you gave the cancellation information before the order. Regulation 34(9) lets you deduct the loss in value, up to the item price. The standard delivery charge is still refunded, and the balance is due within 14 days of the return arriving.

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General information for UK small firms, not legal, tax or financial advice.