I'm just wondering how to proceed when it comes to cancellation fees when a customer asks for a refund.
We sell shirts. We have a customer who ordered 5 Medium shirts which we need to acquire from a supplier. After getting the 5 mediums shirts he changes his mind and asks for 5 small instead. We then return the 5 mediums and get 3 small and 2 are out of stock. Upon learning this the customer decides to cancel the whole order (Including the 3 small we have available).
Is it legal to impose any cancellation fees on the customer? Or is he entitled to a full refund?
Legally, there is no refund expectation for a change of mind.
However, what do your terms and conditions specify? I'm assuming there is a contract in place or your online store has some terms and conditions published. How to handle refunds / cancellations / change of mind should all be in there.
In terms of cancellation fees, restocking fees, etc - if they are not in the terms and conditions or mentioned in the contract at the point of sale; you cannot impose them later on.