This is most commonly used on sporting events, and acts as protection for backers in case of a draw. When this rule is in play, the stake is returned when a draw occurs. When one team wins, the bet acts as normal, paying out if the backed team wins, or with no pay out when the backed team loses.
This type of bet covers punters by giving them a decreased chance of losing their stake. The option is not available on all bets, and the odds are slightly lower on this type of bet due to the decreased risk involved.
Example: You bet on Team A to beat Team B and you place a £20 bet. When the game ends as a draw, you receive the full stake of £20 refunded.