Refund vs. No Refund - Your TEST Results

by Vagabond 007

Posted: 14 years ago 21 replies

INTERNET MARKETING

After seeing "that other refund thread" and seeing it debated on whether or not offering no refunds lowers sales, I thought it would be good to start a thread on ACTUAL TEST results.

No hearsay. Seems the general consensus is that NOT offering a refund will lower sales. But, I have yet to see people actually back that up with test results.

So how about we share them here? No bickering on why we should "give them and move on." Or not give them because people still get the product after the refund.

Just your results. If you tested using a refund vs. not using a refund, or even if you at least give a conditional refund, what were the results?

I'm new to selling online, made/make most of my money offline, so I don't have any huge results to share. But...

As of now I've only sold one product. It does have a refund policy. But, I make it VERY clear that work is involved and if they have plans of refunding minutes, or even a day later, to not even bother purchasing because they are not getting a refund.

I put that in place after I had a refund request that seemed "shady"...only hours after they purchased, so clearly they didn't use it. But again, that's not the point of this thread.

Since I put that place, I've only sold the product via a recent WSO. No complaints (bunch of rave reviews). No refunds. And I sold out in 48 hours. So it didn't hurt my sales.

Here is the exact wording I used...

I truly believe in this course. I believe it makes it easy for you to get started on attracting local business owners. I believe everything is laid out in an easy to understand formula. If you invest in this course, go through it, and don't agree with what I just said, you have 30 days to request a full refund.

**I almost hesitate to put this as it may turn some people off and cost me some sales. But, if you invest in this course and ask for a refund minutes later, or even the next day, no refund will be given. Look, I did my part to make this as easy as possible for you. But If you are not willing to put in the small amount of effort to edit some files with your name and contact information and then use them to try and generate clients, don't even bother investing in this program

I think honesty is the best policy. And I think (haven't asked any buyers to confirm) people respected the fact that I was upfront with them.

I do plan to sell more products in the future online. And some will not have a refund policy.

Curious to see what others have found. Again, please no bickering. Just results.

#refund #results

BIG Mike

Banned 14 years ago

[DELETED]

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GeorgR.

14 years ago

Originally Posted by BIG Mike

Over the years, I often ran WSO's with a clear no refund policy as well - never had a problem there either, although to be fair, reputation comes into play as well.

You have the advantage to provide super quality software at ridiculous low prices as well as great rep..so i could see the refund rate being low anyway.

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dave stahly

14 years ago

What do you think about a refund policy like this. I am starting up a monthly membership site january 1st. It is in the field of IM.

customer pays a monthly fee ($29.95)
customer can cancel at any time but there will be no refund, period.
If the customer pays every monthly fee on time, and after 365 days
they feel that the membership was not worth it, they can get a full 12 month 100% refund no questions asked!

dave

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Andy Money 14 years ago

Vagabond, was my thread the "other refund thread"? I'm curious if it was mine or someone else's. Anyway, I don't know about "testing" the refund rate on a WSO, other than just watching sales increase through sheer observation--which is what I did, and I'm thinking that's what I'll do from now on even though I still do refunds from time to time. Interesting reading other's experiences with refunds though, surprised.
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- Vagabond 007 14 years ago
  
  Originally Posted by Andrew Maule
  
  Vagabond, was my thread the "other refund thread"? I'm curious if it was mine or someone else's.
  
  Someone else's.
  
  Thank you to everyone who contributed. Some interesting results.
  
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TheWealthSquad

14 years ago

Dave

My personal suggestion would be to only give a one month refund. Since they are consuming the information each month, they should know if they like it or not.

I know of several membership sites that do this.

Just something to think about.

Scott

Originally Posted by dave stahly

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Adam Nolan 14 years ago

You have to have a right to rescind under Candian law that lasts at least 10 days I believe. Even if not advertised.
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GoGetta 14 years ago

Yes, Reputation is a big player in this argument,

If you have a decent rep for good products, then people would be happy to buy on the grounds of no refund!

But, you do need to be clear that you are offering NO REFUND as some people will request anyway even if you never put a refund option there in the first place. So be clear either way!

GoGetta
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Stephen Root 14 years ago

Some of my test results:

Product #1: Sales increased 12% with 180 day moneyback guarantee (no guarantee before)
Product #2: Sales decreased 0.7% with 30 day moneyback guarantee (no guarantee before)
Product #3: Sales decreased 3% with 90 day moneyback guarantee (was 30 day before)

I have a lot of other test data as well but there's no point posting more here because what you can learn from this is nothing except you have to test it yourself. Every market is little bit different and every product is little bit different.

For example in some markets there's so much scam going on that people really need clear risk reversal and in some markets they couldn't care less.
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dmarze 14 years ago

I think every product should comes with refund option. You will help you make more sales.
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TrafficMystic 14 years ago

I do think most products should come with refund policy, this makes it a 'no risk' for the buyer of the product. You will always have the odd few buyer who buy with the intention to get a refund after purchase and that should be built into your business model anyways..

On all the product I sell both SEO Strategies and Software most of the buyers I believe are genuine and the product just may not suit them or not suit the way they work so i believe that if the buyer can try the product first and decide from there is does increase the likely hood of more sales and more satisfied buyers.
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Michael Oksa 14 years ago

I used to state my refund policiy clearly, and it always resulted in about a 2% - 3% refund rate.

It's still a no questions asked, 100% guarantee. However, the only change I've made is that I don't publish it. This seems to eliminate serial refunders, because they don't know for sure that they will get their money back. At the same time, if someone really doesn't have a use for it, then they can get a full refund.

Since making this change, refund requests are much less than 1%. Maybe 1 for every few hundred sales.

All the best,
Michael
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Michael Oksa 14 years ago

What ticks me off are the blanket statements that you "Must" offer refunds because that "Always" generates more sales. That's not uniformly true by any means.

Yep. It's the idea that "if it will make ME more likely to buy, then it must apply to everybody else on the planet". Sorry, but ego and/or ignorance are no substitution for actual testing.

All the best,
Michael
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- petelta 14 years ago
  
  As Stephen Root stated with his results, my results have been the longer the money back guarantee the more sales. All these results have been with offline sales though. I am new to online sales.
  
  But from my business experience, I used the longer refund policy to pull more sales in. People seem to feel more comfortable to buy when they know if they don't like the product they can get their money back. Of course many think this should be different with online sales because once they get their money back, they still have your product...but honestly who cares.
  
  The number of people who actually ask for a refund are small. Even if someone doesn't like your product, most won't take the time to even ask for a refund. It's a hassle for them, and people are LAZY! I know there are lots of scammers out there but from my experience, its best just to say screw em. If its a shady request, give them their refund and block their IP. Its a lot less hassle and worry on your part not to make this an issue.
  
  I learned the long refund policy method from Tim Ferris from "The 4 Hour Work Week"...great book btw.
  
  I haven't ventured into "make money online" products yet and I would bet you get the biggest amount of scammers in this market. Still I think less hassle for you the better. If people are saying your product is good, then word will get out and you get more sales. The more trouble you give a customer over a refund, the more likely you will get a bad review from them. Even if they are a scammer, you don't want someone talking crap about your credibility.
  
  Now if your refund rates end up being like 50%, then change your policy for sure. But if its just a small amount of your sales, I wouldn't worry about it. I've found this way makes my day easier and thats my goal in life lol.
  
  Either way you go, stick with it and honor your policy. For BIG MIKE, he doesn't offer refunds and sticks by it. Less hassle for him.
  
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Michael Oksa 14 years ago

For BIG MIKE, he doesn't offer refunds and sticks by it. Less hassle for him.

And...for those who missed it...MORE sales.

Test. Test. Test.

~M~
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Chris Lagarde 14 years ago

Big Mike - I too saw the same post where the 365-day refund seller wasn't happy about refunding at the 5 month mark. If you offer it, honor it, and move on. At the same time, testing is where the rubber meets the road. You can think, feel, assume all you want, it's testing that counts.
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KristiDaniels 14 years ago

I will ditto Stephen Root. I could post pages and pages of test results for different forms of guarantees tested in different niches.

If you squint and look at the graphs from a distance, testing proves that a guarantee improves sales.

My latest niche is weight loss though. I have different sales letters for men and women. So far, I haven't found a guarantee that works for the page that men see.

The winning guarantee on the page that women see is results oriented and not focused on giving money back. It is focused on the weight loss results that are guaranteed.

Every niche is different. It matters if you have testimonials or not. The wording of the guarantee matters. The pre-sales materials affect whether offering a money back guarantee improves or hurts sales.

Offering a money back guarantee usually helps sales. Making it longer usually helps more. But there are a lot of exceptions.
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TheWealthSquad 14 years ago

I don't have the numbers that the original OP asked for. Most of my business is offline. I can honestly say that when I have stressed our refund policy to our clients, I get more to come into the store and close a much higher percentage of them. It is going to be tough in my industry to truly measure refund vs no refund due to all the other changes we do in our phone marketing, direct mail and others.

I will say that I have bought products from people who offered very long refunds (Lifetime) to no refund policy. I don't think I have ever asked for a refund for a product I bought unless it was fraudulent.

For those that have tested it, they know how it impacts their market. Each market is different. In general risk reversal is going to increase sales. If you already have trust built in your clients, the refund policy doesn't matter as much. Big Mike - this may be why you say the changes you did. Your reputation is already established and thus the "risk" of buying from you is already reduced. The removal of a guarantee shows the confidence you have in it.

Each market has a different set of dynamics at play. The easiest thing to do is
set up three separate sales pages. One offers no guarantee and stresses it. One offers a conditional one and the third is unconditional. Drive a few hundred people to each one and measure your conversion.

The only way you will KNOW is if you test it.

Many in the real world almost never offer guarantees (Doctors, lawyers, dentists, plumbers, etc) and yet they stay pretty busy.

Don't fall for the "We have always done it this way" mentality. Test it. and then come back later and test it again. Things may change on you.
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- sarahstaar 14 years ago
  
  I am trying a no refund policy with my new product, MoneyMakers TV. I am however offering a $1 3 day trail so i am hoping this will help.
  
  I will keep you updated with my results.
  
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davidofderbyshire 14 years ago

I offer a 180 day refund policy and after selling 7020 products I have had 3 refund requests
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- Christophe Young 14 years ago
  
  I have so few refund requests that I don't worry much about it. It would be interesting though to do a test without my refund guarantee. Thing is, if you sell through CB, you have to honor their refund policy. If you sell through Paypal, the buyer can always start a PP dispute and often the seller will lose out, especially with digital products.
  
  Then there is the issue of credit card charge backs.
  
  So, I figure a person can always get a refund if they know how so I've chosen to stick with my guarantee. Sales have been good so I haven't changed it in any way.
  
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raylm123 14 years ago

I used to advertise a 60 day return money on my sales page, but my sales increased when I took it off my sales page. So now I no longer advertise a return policy on my site.

I think it's curious how others have had this result as well. It makes me wonder what the psychology behind it is.
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Refund vs. No Refund - Your TEST Results

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