How To Deal With Refund Requests (Even unfair ones)
When it comes to our buying decisions, we’re not always willing to invest our hard earned money on a product or service that we don’t know will work.
Can you relate?
That’s what makes the ‘Money back guarantee’ or some other form of refund policy so attractive. It eliminates the risk for buyers.
There are numerous studies to back this up. In fact, the company Opia carried out a survey in 2015 to find out how money-back offers would impact mobile phones sales. A massive 90% of respondents said they would be more likely to buy a new mobile phone if it came with a 60 day money back guarantee.
It’s a great incentive especially when you know that you are going to deliver so much value that your customers are going to be blown away.
There’s just one problem.
The freebie ninjas.
You know the ones. They sign up for everything, they soak up everything you have to offer asap and then they demand a refund.
If you’re in the industry of selling your knowledge, it gets worse. They often end up stealing your work and try to repurpose it as their own.
Yep, those people.
They exist. We know they do and as small business owners, they are the ones that give us the most fear and anxiety about offering refunds. Although often our fear of providing just comes down to not quite knowing how to deal with them and being worried about doing work that you end up not getting paid for.
While that fear might leave you thinking about having a strict no refunds policy, it would be a shame to miss out on potential sales because of it.
So what do you do?
Well, you can still offer refunds. You just need to have policies in place to protect yourself from the freebie ninjas. You have to make it difficult for them to take advantage of this low-risk investment. That way, you still have the opportunity to use this incentive to attract new clients and customers. Best of all, you do it without compromising yourself or the value you offer by allowing the freebie ninjas to take advantage.
Here are three steps you can implement today:
1. State Exactly What You Are Selling
Be crystal clear on exactly what your product/ service is, who it is for and what result they can expect to receive after purchasing. It’s important to be honest here. Also, ensure you include any necessary disclaimers so that you aren’t guaranteeing false promises. There is a fine line between marketing your value proposition and protecting your booty. There is a way you can achieve both.
You can showcase potential results but let people know you can’t guarantee they will receive the same results themselves.
2. Clearly Explain The Conditions Of Your Refund Policy
So many companies leave this in the small print. Don’t. Be clear and transparent. Encourage people to read it before purchasing. You might even want to include it in a couple of different places (sales page, disclaimers, email autoresponders) so that they do see it before signing up.
If you are worried about people not buying then keep in mind, the people that don’t buy are most likely to be the freebie ninjas. You are creating a filter so that only people genuinely interested in buying your product/service actually go ahead and buy.
Now, the terms laid out in your refund policy will be determined by the product/service you are selling and the industry you are in. Here are a couple of ideas just to get you started:
When selling your knowledge, you can state that refunds are only offered when the participants has implemented all the action steps mentioned / filled out the workbook. This way, they have to do the work up front. If it works, they probably won’t be needing that refund after all and hey, you’ve just kept them accountable for their purchase. If they go through it and they aren’t happy then maybe they now have a reasonable request for a refund.
Often people complain that they didn’t get what they were hoping for when it comes to a business delivering a service. They then refuse to pay. In cases where you are providing a service that has a time investment on your end, I always suggest payment up front. If you have too, you can accept immediately after the service has been delivered. You also need to explain that they are paying for a block of your time, your most valuable resource and you can’t get that time back. This is really important in managing client relationships and setting expectations from the get go.
Again, you can be polite and confident in doing this. We’re all people and most of us are reasonable. If we know exactly what we are paying for and the conditions attached are laid out clearly, we decide if they are acceptable and willing to purchase. It’s when we don’t know or feel misled that we tend to want some form of remuneration.
Selling A Physical Product
When it comes to physical products, refunds can be a little bit easier to deal with. There’s typically something about the product that isn’t working or the customer isn’t satisfied with the results.
The first thing you need to do here, like with any of these options, is ensure they have a receipt for their purchase. This is pretty standard and with so much being purchased online nowadays, it’s easier to keep track of this. Next, like mentioned previously, make sure you are very honest and clear about the results the customer can expect to receive. Don’t ever make false promises and if you are showcasing potential results, be clear about that too. Let the consumer know that you can’t guarantee the same results.
3. Have A System In Place To Deal With Refund Requests
There will be times where people ask for refunds. The easiest way to deal with these is by having a system in place so that you don’t become flustered or panic.
Customer service is always a priority. First off, ask if there is anything that you can do to enhance or improve their experience. Customers want to feel listened too and valued. If you can turn the situation around and help them along the way, these people can often become your most loyal customers. Just because you cared and provided a solution to their problem.
If someone genuinely is requesting a refund and has followed through the steps laid out in your policy, you give them it. Treat them well and show your appreciation for their feedback. After all, this is feedback you can use to better your product and avoid future refund requests for the same issues.
And you never know, just because your product/service wasn’t right for them this time round, it doesn’t mean they won’t buy from you again or let others know about you.
The great thing about having a policy in place is that it will give you peace of mind. Once you have created it, it’s there and you can just tweak and adapt it based on changes in your business and feedback from customers.
You shouldn’t have to miss out on potential sales just because of a minority group trying to take advantage.
I hope this has been helpful and valuable for you. I so want you to take action on this though so to help you along the way, I’ve created a template response you can use when someone does request a refund for a product or service you offer.
I’m so sorry that [INSERT PRODUCT/SERVICE] isn’t meeting your expectations.
I appreciate you reaching out.
Would you be able to tell me a little bit more about what is you are frustrated or unhappy with?
I may have a solution and of course, I’d like to help in any way I can.
If I can’t make it right, I’ll go ahead and send your refund right away.
Thank you, as always.
You will have to tweak and adapt it to your style and wording but it should give you a good base to get you started. Let me know if it helps ;)