A cancellation policy is added to products by suppliers to set rules on how much to refund the customer, according to the time the cancellation takes place. E.g. 25% will be refunded to the customer if he books less than 24 hours before departure.
The supplier can create one or more rules and apply them to the products rate they should be linked to. Each rule can contain more than one step e.g. customer gets 50% refunded if he cancels 48 hours prior to departure and customer gets 25% refunded if he cancels less than 24 hours prior to departure.
When you have entered the product you add the cancellation policy to the Rates you are using for this product. Select the name of the rate if you are adding a cancellation policy to a current rate. Select "add" if your are creating a new rate that you will add this cancellation policy to. Here are information on how to add new Rates.
In Rates scroll down the page until you find the "Cancellation policy" drop down list. Select the policy that should be valid for this rate. Remember to save before continuing.