Refunds are an essential part of providing good customer service. In the world of web development, the sales of digital products are handled in a variety of ways.
Many sellers flat out refuse to provide any refund, regardless of whether their product worked or whether their service did what was advertised. The reason many sellers take this stance is because you cannot return a digital product. If you purchase a WordPress theme and downloaded it to your computer, the seller cannot take the theme back. You have a copy of the design and you can now use it, copy it, sell it and even upload it to a torrent website.
For certain products and services, it is common for the seller to offer a money back guarantee over a certain period of time. For example, many premium WordPress plugins that cost more than $50 offer a 30 day money guarantee.
One of the reasons a no fuss money back guarantee is offered is to convince people to purchase the product in the first instance. Marketers realise that a good money back guarantee can sway people who are sitting on the fence to buy. Unfortunately, many people take advantage of this.
Being Blackmailed by Disgruntled Customers
I was chatting with Andrei from SiteMile the other day. He was talking about the problems he has had with certain customers in the past. Many have resorted to blackmailing him in order to get a refund, despite purchasing a SiteMile design around three months ago.
He spoke about one guy who made up a lie that the promised functions were not in the theme, even though they clearly were. In the end, he refunded $200 back to him. Another guy downloaded one of his themes illegally and threatened to publish bad reviews of his business across the internet unless he did custom work for him (worth hundreds or thousands of dollars).
Adrei noted that he was concerned about people spreading nasty rumours. Even if they were not true, a bad review could cost him money because many people are quick to make a judgement call on a product or service without doing the research. Therefore, he has processed many refunds to customers who were not due them.
My advice to Andrei was to use his blog to defend his position. If someone had been blackmailing me in that scenario, I would have publicly shared the story with everyone and explain my reasons as to why a refund was not honoured. Most good customers would support a company’s stance against unwarranted refunds. I
f a company states that refunds are offered up to 30 days, then anyone who asks for a refund 60 or 90 days later should not get a refund unless there is a unique situation that warrants it. Being open about it all through your blog should have the added bonus of discouraging scammers from trying to blackmail you in the first place.
A Recent Experience With a Disgruntled Customer
I can however relate to the situation that people like Andrei find themselves in. I personally offer a seven day money back guarantee for Rise Forums. So far, I have processed a few refunds for two or three people who assumed that Rise Forums included a complete course to making money online. I processed the refund within minutes of receiving the request.
A few weeks ago, I had to deal with a customer who was unhappy from day one. It was clear to me from the start that he was going to ask for a refund. He was someone who wanted to make lots of money on the internet, but put in zero work, time or money to get there. Obviously, this is frustrating for me as I am trying to help members, but I need members to help themselves. I cannot do everything for them.
It was clear that he could not be helped from the first post. He wanted to know how it was possible to create a blog that:
- Only had to be updated one or two hours a week
- Required no investment of money
- Was making at least $3,000 per month within three months
He also pointed out that he had never launched a blog before and never maintained one. Nor had he any existing websites to help promote his new blog.
I did not sugarcoat my response. I advised him that it was not possible. Getting any blog to around $3,000 per month income would require either working 50+ hours a week for three months, or a large budget to hire other people to help update and promote the blog.
He did not take the response well and noted that “blogging is a waste of time and energy, unless you get lucky”. At the end of the seven day refund period, he published an abusive message to everyone on the forum and sent one to me privately too. I had never been so happy to give someone their money back haha :)
What is the Best Way to Handle Refund Requests From People Who Are Not Eligible For a Refund?
What if that member had contacted me a few weeks later? What if he demanded a refund outside the guaranteed refund period? How should I have dealt with it?
I have no doubt that a refusal of a refund would have spurred him on to tell others than my forums sucked. On the one hand, I could take the route Andrei took and just give him the refund he wanted to avoid any negative opinions about my forum. However, I do not appreciate being blackmailed by anyone to give them a refund if they are not due one. Particularly from someone who is going out of their way to harm my business.
Good customer service is a big part of providing a good product or service. I believe companies should do what is right and honour their refund policies. Judgement should of course be taken to do what is right and consider the circumstances of each situation. Despite this, I would say that 99.99% of the time, refunds should be handled in the same way, regardless of whether the refund was requested by someone who was polite or someone who was pissed off.
I also believe that bad press is inevitable. Even the best services in the world have bad reviews about them somewhere on the internet, therefore you are better putting your energy into improving your product or service rather than worrying about whether a disgruntled customer is going to bad mouth you. You should also find that if the vast majority of your customer base is happy, they will defend you when someone does speak negatively about you.
What Say You?
In summary, I feel that if you offer customers a money back guarantee, you need to honour it. It does not matter if the customer was a pain in the butt or not. You promised them a no fuss money back refund and you need to provide it. That is all there is to it.
While I can understand the need to grant refunds to pissed off customers who can speak negatively about your business, I do not feel that you should bend the rules for them unless they have a valid reason for asking for a refund.
What’s your opinion on this issue? I’d love to hear your thoughts on handling refunds.
Kevin
