Custom retention policy functionality availability depends on your plan.
This article does not apply to POP/IMAP and OWA-only mailboxes.

A custom retention policy allows you to control mailbox size and prevent mailboxes from growing too large.

By default, all mailboxes have an indefinite retention policy, which means that data is never deleted from mailboxes unless users delete it manually, using a mail client or Outlook Web Access. When you set a custom retention policy for a mailbox, you force data to be automatically deleted from a user mailbox after a certain period of time. All mail items that are older than the retention policy setting are hard deleted (deleted permanently, bypassing the Deleted Items folder).

Important notes:

  • Retention policy is applied to email items only (Calendar appointments, Contacts, Tasks are not affected)
  • Currently, every mailbox has the setting Delete messages in Junk Email folder after 30 days. This setting is not affected by custom mail retention policies, and it will not be changed if a custom retention policy is enabled for the mailbox.
  • Retention is calculated by Exchange Server based on the delivery date for all folders except Deleted Items folder.
  • When a retention policy is applied to the mailbox there will be a delay in applying retention age for items in Deleted Items folder.
    This is due to the fact that retention age for deleted items is calculated differently. Items in deleted folder will get retention age calculated based on the date the policy was applied for the first time. Click here for more information. 
  • Only one custom retention policy can be assigned to each mailbox.
  • After a policy has been applied to a mailbox, OWA and Outlook display a note in each mail folder informing the mailbox owner of the retention period, as shown in the screenshot below.
    Note: It takes several hours for the note to become visible after the policy has been assigned.

Retention Policy
To set a custom retention policy:

  1. Navigate to CONTROL PANEL > Services > Compliance > Retention Policy. This page lists all users who have Exchange mailboxes enabled for them.
  2. A custom retention policy can be enabled for each user individually, or for all the users at once.
    • To enable the custom retention policy for an individual user, select the Delete mail option next to that user.
    • To enable the custom retention policy for all the users listed, select the Delete mail option at the top of the column, above the list of users.
      Setting Up Retention Policy
  3. Choose the retention period setting from the corresponding box under Apply Policy. Custom policies can have the following retention periods: 1 month, 3 months, 1 year, 2 years, or 3 years.
    Note: 1 year is always 365 days, regardless of whether the current year is a leap year.
  4. Click the Save Changes button.
  5. Enter the day of the week in the confirmation window.
  6. On the next page, click Confirm.
    Now the custom retention policies are applied to the selected mailboxes.