What type of wood would you use? Also, what do I cover it with and does the customer keep it? How does this work. I want to save money and this sound good but how does it work with the customer returning it or what?

I have used a wood board, mine was just a sheet of luan, thin plywood and we covered it in wrapping paper. We only bake for family or friends that we consider family, so it is pretty easy to get anything back. However, getting back would entirely depend upon the customer.

I would use 1/4" or 1/2" plywood or particle board. You can cover it with foil, paper, fabric, whatever you like. Put your bottom layer on a cake circle the same size as the cake and sit it on top of the board and build up from there. You can build the price of the board into the cake or get a refundable deposit on it.