Glossary
Refund policy
A refund policy sets out when a prop firm returns a trader's fee, most often with the first reward on a funded account.
What it means
Prop firms rarely refund a challenge fee because a trader failed. A common model is a conditional refund: the trader passes, trades the funded account and receives the fee back with the first reward. Some firms also allow a refund before any trade is placed, within a set number of days. Others offer no refund at all.
A refund policy should say exactly when the fee comes back, whether add ons are included, and what happens if a trader breaches before the first reward. Firms need it written into their terms and matched to how their payment processor handles refunds. A clear policy shown at checkout also helps prevent chargebacks.
Worked example
Illustrative numbers: a trader buys a $50,000 challenge whose fee is refundable with the first reward. They pass, make $2,000 on the funded account with an 80% profit split, and receive $1,600 plus the fee. Had they failed the challenge, the fee would not have come back.
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