Michigan Small Claims Court Refund Dispute — Defendant's Guide

Why Refund Disputes End Up in Small Claims

A customer, client, or buyer who paid for something and did not get what they expected — or did not get anything at all — can file in Michigan's Small Claims Division for up to $7,000 under MCL 600.8401. Refund claims show up across a wide range of situations: a contractor who collected a deposit and did not start the work, a seller who shipped the wrong item, a service provider whose work fell short of what was promised, or a vendor who charged for something the buyer says was never delivered.

If you have been served with Form DC 84 over a refund dispute, the plaintiff is asking the court to order you to pay money. Understanding the specific claim and preparing your response before the hearing is critical.

Common Refund Scenarios and Defenses

Services performed but disputed. The plaintiff says the work was substandard and wants their money back. Your defense: you delivered what was agreed. Bring the written contract or agreement (even a text message chain), photos or records showing the work you performed, and any communications where the plaintiff accepted or acknowledged the work at the time.

Deposit collected, work not started. The plaintiff paid a deposit and says you never performed. If you had a legitimate reason — the plaintiff canceled, changed the scope, or became unreachable — bring evidence of that. If you genuinely owe the deposit back, consider settling before the hearing to avoid additional costs.

Product sold as-is. The plaintiff bought a product (often a used car or household item) and wants a refund because it broke or was not what they expected. If you sold it as-is with no warranty, that disclosure is your primary defense. Bring the bill of sale, any written as-is statement, and any messages where the buyer inspected the item before purchasing.

Cancellation and refund policy disputes. The plaintiff says your cancellation or refund policy entitles them to money back. Whether it does depends on what was agreed in writing. If your terms clearly state a no-refund or limited-refund policy and the plaintiff acknowledged those terms, that is your evidence.

How to Prepare

Michigan small claims hearings are informal — the magistrate or judge will ask both sides to explain their version — but the party with organized documentation usually has the advantage. Bring:

• Any written contract, invoice, receipt, or terms of service.
• A chronological printout of text messages or emails between you and the plaintiff about the transaction.
• Photos showing the product or work you delivered.
• Proof that you attempted to resolve the dispute before court (a demand letter response, a partial refund offer, a repair attempt).

Do not assume the magistrate will take your word over the plaintiff's. Every claim you make — "I finished the job," "the buyer saw the damage before purchasing," "my policy says no refunds" — needs a document, photo, or message to back it up.

Settling Before the Hearing

If the refund demand has some merit — you did not fully deliver, or the product had an undisclosed defect — a settlement before the hearing can save both sides time and uncertainty. You can negotiate directly with the plaintiff and, if you reach an agreement, file it with the court as a consent judgment on Form DC 85 or a voluntary dismissal on Form MC 09.

A settlement also avoids the risk of the magistrate awarding more than you expected. If the plaintiff can show actual out-of-pocket losses beyond the purchase price (repair costs, replacement costs), the magistrate can include those in the judgment up to the $7,000 cap.

What Happens If You Lose

If the magistrate rules against you, you have 21 days before the plaintiff can pursue enforcement (garnishment, bank levy). During that window, you can pay voluntarily, negotiate a payment plan, or — if the case was heard by a magistrate — appeal within 7 days for a de novo rehearing before a District Court judge.

If paying the full judgment at once is not feasible, Form MC 15 lets you request installment payments from the court.

For a structured roadmap covering every response option and hearing preparation step, see the Michigan Small Claims Response Guide.

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