Deposit Questions

1. What is a puppy or dog deposit?

Deposits are funds advanced by a buyer in exchange for a guarantee that the breeder will hold a puppy or dog for the buyer. Deposits should be exchanged in good faith by both parties (i.e., the breeder should reasonably believe s/he will be able to provide the buyer with a puppy or dog, and the buyer should reasonably believe s/he will purchase a puppy or dog from the breeder).

2. Are non-refundable deposits permitted?

Yes. However, for all deposits (refundable or non-refundable), it is important that both the breeder and the buyer know exactly what the deposit covers and the terms of the deposit's refund policy before any funds are exchanged. As a matter of best practice we recommend that you clearly explain your deposit/refund policy to the buyer and put it in writing (in a purchase agreement, invoice and/or separate deposit agreement). You should include as many details as possible, including (1) identifying the litter, (2) stating whether or not the deposit will be put toward the full purchase price and (3) explicitly list out the circumstances when the deposit is refundable. You can always use our template non-refundable deposit agreement as a starting point!

We also recommend sharing our article -- What you need to know about non-refundable deposits -- with buyers to help explain why many breeders charge non-refundable deposits!

3. Do I need to refund a non-refundable deposit?

The answer to this question depends on the circumstances. There are state-specific laws governing when and how a buyer can return an item for a refund. Most states allow sellers to formulate their own refund policies, however, some states have more strict guidelines. Generally, you should be sure to always clearly explain your refund policy to your potential puppy buyers (preferably in writing) before any money is exchanged. This chart summarizes state laws regarding a buyer’s right to a refund.

4. If I have accepted a deposit from a puppy applicant and I realize it isn’t going to work out and they are not a match, do I have to give them a puppy?

You are not required to sell a puppy or dog to a buyer if you determine that they would not be a good match. However, as a matter of best practice, we recommend that before accepting a deposit you (1) assess the buyer’s suitability so that you are accepting their deposit in good faith (i.e., based on an initial assessment you have a good faith belief that you would sell a puppy or dog to the buyer) and (2) clearly communicate your deposit/refund policy to the buyer and (3) put this policy in writing.

5. Should I call my non-refundable deposit by another name (e.g., “reservation fee” or “application fee”) so it will be enforceable?

The terminology used to describe the deposit will not affect whether or not it is enforceable. Some of our breeders prefer to call it a “reservation fee” or you can call your deposit by another name if you feel it more accurately describes the time and effort you put into breeding! Many of our breeders elect to call their deposit a “reservation fee” or “application fee” instead. Ultimately, what is important is that you’ve clearly communicated the terms of your deposit or fee policy to the buyer before any exchange of funds. See our answers to “Are non-refundable deposits allowed?” and “Do I need to refund a non-refundable deposit” for more information regarding best practices and applicable federal and state laws.

Disclaimer: This resource is provided for general information purposes only, and shall not be construed as legal advice on any subject matter. Any advice we provide does not create an attorney-client relationship. We are not acting as your lawyer and are not barred to practice in your state. We would recommend connecting with a lawyer in your state if you are able. Legal advice is dependent upon the specific circumstances of each situation and the law may vary from state to state. Some information in this resource center may not be correct for your state or for your specific circumstances. This resource was prepared only in accordance with U.S. law and does not reflect the laws of any other country. Good Dog expressly disclaims all liability in respect of actions taken or not taken based on any or all of the contents in this resource center.