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Sellers who cancel orders for reasons not expressly permitted by Whatnot are subject to a cancellation charge equal to the greater of a flat currency amount ($3 USD or equivalent) or 3% of the total order value, which Whatnot may deduct directly from seller balances or payouts.
This analysis describes what Whatnot's agreement states, permits, or reserves. It does not constitute a legal determination about enforceability. Regulatory applicability and practical outcomes may vary by jurisdiction, enforcement context, and individual circumstances. Read our methodology
This provision authorizes Whatnot to deduct cancellation charges directly from seller payouts without requiring a separate billing action, and the document explicitly characterizes the charge as liquidated damages rather than a service fee, which has distinct legal implications for enforceability and challenge under applicable contract law.
The updated terms establish mandatory arbitration as the exclusive dispute resolution mechanism for influencers, replacing direct court access in California and Australia. Under the revised language, any dispute with Whatnot must proceed through arbitration under the main Terms of Service, which includes a class action waiver. This means influencers cannot bring class or collective claims and cannot access court proceedings except where the main Terms of Service explicitly permits. The practical effect is that individual influencers seeking to resolve disagreements with Whatnot over payments, account suspension, content disputes, or contractual interpretation must use arbitration rather than litigation.
View change record →The updated terms establish a formal Creator Program for Australian users that defines how creators can submit content for potential monetary or credit rewards. Creators grant Whatnot a one-year, non-exclusive, worldwide license to use submitted videos across paid and organic social media, television, and other platforms, while retaining ownership of the original content. The terms require creators to clearly disclose any material connection to Whatnot, including consideration or free products received, in a form specified by Whatnot and compliant with Australian advertising standards and the AANA Code of Ethics.
View change record →Australian sellers using Whatnot are now required to resolve all disputes through arbitration rather than through Australian courts. The updated terms state that disputes will be resolved exclusively under the main Terms of Service arbitration provisions, removing the previous option to bring legal action in Los Angeles courts or pursue jury trials. The terms no longer include language allowing court proceedings, except where the main Terms of Service expressly permit.
View change record →Introduces automatic financial penalties for seller-initiated cancellations, creating a new revenue stream for Whatnot and potential friction point for sellers.
View full change record →Under this clause, sellers who cancel orders outside of permitted circumstances will have a cancellation charge deducted directly from their Whatnot balance or pending payouts. The charge amount is set at Whatnot's sole discretion and may be updated without seller-specific notice.
Cross-platform context
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"If a Seller cancels an order for any reason other than a buyer-initiated cancellation properly submitted through the platform or another reason expressly permitted by Whatnot, the Seller agrees that Whatnot may assess a cancellation charge. A cancellation charge will be equal to $3 USD, £3 GBP, €3 EUR, $3 CAD, or $3 AUD, or the equivalent amount in the currency in which the order was placed, as applicable, or 3% of the total order amount (including item price, shipping, and applicable taxes), whichever is greater, or such other amount as Whatnot may establish from time to time in its sole discretion. The Seller authorizes Whatnot to deduct any cancellation charge from the Seller's balance, ledger, payouts, or any amounts otherwise owed to the Seller. The cancellation charge constitutes a contractual penalty and liquidated damages for failure to fulfil an order and is not a fee for services.Excerpt from Whatnot's Terms of Service
REGULATORY LANDSCAPE: The characterization of the cancellation charge as a contractual penalty and liquidated damages engages general contract law principles regarding penalty clauses versus genuine pre-estimates of loss. Jurisdictions such as the UK and certain Canadian provinces apply scrutiny to penalty clauses that do not represent a genuine pre-estimate of loss; the enforceability of this provision as liquidated damages may therefore vary by jurisdiction. The FTC Act may be relevant if the charge structure or deduction mechanism is determined to constitute an unfair practice. GOVERNANCE EXPOSURE: Medium. The provision's explicit self-characterization as liquidated damages rather than a fee for services is operationally and legally significant because it attempts to foreclose refund or challenge arguments, but the enforceability of penalty clauses described as liquidated damages without a demonstrated nexus to actual loss is subject to challenge in multiple jurisdictions. JURISDICTION FLAGS: UK sellers operating under separate UK terms should confirm whether this provision applies given the UK's distinct penalty clause jurisprudence. Canadian provincial law and Australian consumer law may also limit enforceability of provisions characterizing charges as liquidated damages where actual loss is not demonstrated. California sellers may have additional protections under state consumer protection statutes. CONTRACT AND VENDOR IMPLICATIONS: Seller onboarding agreements and marketplace participation contracts should be reviewed to confirm that the cancellation charge mechanism, including direct deduction from payouts, is disclosed with sufficient clarity to support enforceability. The provision that Whatnot may change the charge amount at sole discretion creates an open-ended financial obligation for sellers. COMPLIANCE CONSIDERATIONS: Compliance teams should map the cancellation charge deduction mechanism against applicable payment and payout processing obligations, and confirm that seller-facing Fee Schedule disclosures reflect current charge amounts. Legal teams should assess whether the liquidated damages characterization is defensible in each operational jurisdiction, particularly where penalty clauses are subject to judicial review.
This provision authorizes Whatnot to deduct cancellation charges directly from seller payouts without requiring a separate billing action, and the document explicitly characterizes the charge as liquidated damages rather than a service fee, which has distinct legal implications for enforceability and challenge under applicable contract law.
Under this clause, sellers who cancel orders outside of permitted circumstances will have a cancellation charge deducted directly from their Whatnot balance or pending payouts. The charge amount is set at Whatnot's sole discretion and may be updated without seller-specific notice.
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