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Refunds and Guarantees on Digital Products

by JonathanBoettcher
22 replies
I recently purchased a Wordpress theme - WPRemix to be exact (a fairly popular one) - because it looked really cool and I thought I could use it for a certain project.

A few days later I dig into it, only to find its not what I thought it was, on the backend, and decide I don't want it anymore.

So I write them a nice email asking if I could get a refund.

I get a response saying they cannot because it is "irrevocable digital product"

To be fair, it is stated, if you go digging, that they don't give refunds.

Nonetheless, I wanted a refund, and I didn't see that condition at the time. 99% of all digital products online offer some form of refund or guarantee.

A couple of emails later and they've completely stonewalled - no ifs ands or buts, there's just no refund. Screw you, Mr. Customer.

So what's my complaint, seeing as I should have been more diligent before buying?

My complaint is that now I feel ripped off, EVEN THOUGH I got what I paid for, and what I implicitly agreed to. The entire experience has left me feeling gypped, rather than happy with the purchase. I think there's a lesson to be learned here for marketers.

Specifically, I'm curious to hear what other warrior's thoughts are on the refund / guarantee issue.

My thoughts are this: We're a somewhat faceless storefront, asking people to purchase a digital product which they've never seen, used or tested before. They don't have any idea who I am or if my product is worth what I say it is, or does what I say it does. If it screws up they can't just come into my store and speak with me face to face and make things right.

Therefore, as a smart marketer / businessman, I need to REVERSE THE RISK of purchasing my product. I need to take away that questioning pressure in their mind of "what if I buy it and this really sucks?"

In my offline business I offer people "guaranteed satisfaction" or I'll give them a full refund PLUS $100 back, in their pocket. Effective risk reversal.

My question is this - is a guarantee necessary on the internet, does it hurt your business having one (ie what is your refund rate) and/or does it HELP your business to have one?
#digital #guarantees #products #refunds
  • Profile picture of the author Davion Wong
    Hi, sellers use a guarantee to add a level of assurance to buyers, making the purchase a risk-free investment. Without this, you will lose a percentage of your sales. Likewise, with this guarantee and refund policy, it can also pull down your sale volumes. It is really a catch 22 situation.

    However, in most cases, I see a guarantee as great help to pull in sales especially if the price tag is high.
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  • Profile picture of the author MichaelHiles
    You've not bought very much software online with digital content delivery have you.

    No refunds are pretty commonplace.

    Caveat Emptor
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  • Profile picture of the author misterlmno
    first thing I do is read the terms before even thinking about pressing buy now!

    even email them first to ask if you buy can you get a refund etc.

    If they do not answer, don't bother!
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    • Profile picture of the author Floyd Fisher
      is this paypal? file a dispute.
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      • Profile picture of the author MichaelHiles
        Originally Posted by Floyd Fisher View Post

        is this paypal? file a dispute.
        :rolleyes:

        Seriously.

        How does this fall under the guidelines of a PayPal (or even a CC) dispute?

        The software does what it's supposed to do. There was no fault on the part of the vendor. It was a PEBKAC error. Problem Exists Between Keyboard And Chair.

        You're not one of those people who goes and buys a suit to wear to a party, and then returns it whenever you're done with the event are you?

        People hate PayPal because of guys who do this crap. No fault of the vendor, fickle buyer changes mind instead of realizing that there does exist UCC laws that COULD be used to enforce the contract of sale, cries baby to the transaction company, who beats up on vendor when it's the buyer's fault for buying something they didn't end up liking.

        You got ethics?
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  • Profile picture of the author Alp Bozkurt
    There is usually no refund policy in software world. You usually see what you are buying before you buy it, in some form. Such as shareware version, demo version, live preview etc.

    Refund policies are generally offered by marketers who outsource the software and make quick money in one shot. They never improve the software anymore after that.

    In fact, I can't understand any refund policy of a digital product. You refund the money but the customer returns what? Anything. The product is still in his computer if not in many other computers as well.
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    • Profile picture of the author Scott Burton
      Originally Posted by Alp Bozkurt View Post

      There is usually no refund policy in software world. You usually see what you are buying before you buy it, in some form. Such as shareware version, demo version, live preview etc.

      Refund policies are generally offered by marketers who outsource the software and make quick money in one shot. They never improve the software anymore after that.

      In fact, I can't understand any refund policy of a digital product. You refund the money but the customer returns what? Anything. The product is still in his computer if not in many other computers as well.
      There are of course exceptions to this, which is I know why you said "usually" and "generally"

      Some of the software products I have available to customers do have refund policies, for much the same reason some have ongoing/recurring charges. If they want a refund, or if they stop paying the recurring charges, I can deactivate their license, and the next time they use the software, it reverts to essentially the unregistered/trial version with whatever limitations existed on that version.

      Sure some very savvy coder could reverse engineer it to get around the license issue. But there are weaknesses in everything. Of course their change becomes moot when the next update comes out.
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  • Profile picture of the author Alp Bozkurt
    The seller wins dispute. He delivered what he is selling. Job done.
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  • Profile picture of the author artwebster
    I have always found that a simple email - BEFORE PURCHASE - will tell me if the software will do what I want it to do and provide evidence, should a dispute ensue, that I was told something that wasn't true or that I framed my question too loosely.

    Either way, since I think that 60% of all advertising for IM products is dubious, at best, I would never buy any software without assurances.
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  • Profile picture of the author Frank Ayres
    If it stated that there were no refunds and the product did what the sales page promises then i thing they were fair in sticking to their guns and not giving one
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  • Profile picture of the author dsmpublishing
    I think paypal may have changed their minds. I had a customer get a refund from a product of mine and it was a downloadable and even though i informed paypal i got an email saying they had found in my favour as it was intangiable and then when i went on paypal i was told that it had been refunded as i hadnt provided correct tracking.

    I normally refund but he starting swearing at me by email so i wasnt willing to deal with an abusive person i remember saying to him apologise for your language and i'd refund you instantly and he didnt.

    I supose we all learn from it but there are lots of idiots that intend to claim a refund before theyve even bought the product its all part of the system
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    • Profile picture of the author antmen
      All of the digital products I've bought online - outside of IM - have either provided me a 30-day full-working trial OR they have an online full-working pre-installed demo. If they don't have those two things I simply don't buy it, because I know that there are no refunds.

      When I entered the IM realm, I was SHOCKED that there were money-back guarantees. I'm sure I wasn't the only one asking, "But... uh... they'll already have my money." I found the guarantee "certificates" somewhat insulting - because they said things like, "Even in the unlikely event that you decide to take advantage of my iron-clad money-back guarantee, you can KEEP the bonuses... blah... blah... blah." I wonder when we'll stop insulting the intelligence of the buyer with these guarantees. Do they work? They obviously DO, but I can't help but wonder if someone will think outside of the box and find a different way to reduce the fear-factor of buyers.

      Until that time... a money-back guarantee is what he have... and it's a somewhat necesary tool given the circumstances. Just two days ago, a news story about online scams made its way around the press (yet again... seems like it's seasonal) - that doesn't help the cause of honest marketers.

      -Anthony
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      • Profile picture of the author WebScript
        Originally Posted by antmen View Post

        ...

        When I entered the IM realm, I was SHOCKED that there were money-back guarantees. I'm sure I wasn't the only one asking, "But... uh... they'll already have my money."

        I found the guarantee "certificates" somewhat insulting - because they said things like, "Even in the unlikely event that you decide to take advantage of my iron-clad money-back guarantee, you can KEEP the bonuses... blah... blah... blah."

        I wonder when we'll stop insulting the intelligence of the buyer with these guarantees. Do they work? They obviously DO, but I can't help but wonder if someone will think outside of the box and find a different way to reduce the fear-factor of buyers.

        Until that time... a money-back guarantee is what he have... and it's a somewhat necesary tool given the circumstances. Just two days ago, a news story about online scams made its way around the press (yet again... seems like it's seasonal) - that doesn't help the cause of honest marketers.

        -Anthony
        Anthony,

        Why did you feel insulted by the guarantee ?

        Was it because you felt they were not sincere ?

        Did you have a reason or a prior experience with them to cause you to believe they were not sincere, or that they were insulting YOU ?
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  • Profile picture of the author Kevin AKA Hubcap
    Originally Posted by JonathanBoettcher View Post


    My complaint is that now I feel ripped off, EVEN THOUGH I got what I paid for, and what I implicitly agreed to. The entire experience has left me feeling gypped, rather than happy with the purchase. I think there's a lesson to be learned here for marketers.
    You said you got what you paid for. What more do you want.

    IMHO you are way off base.

    Check Yourself.
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    • Profile picture of the author JonathanBoettcher
      Originally Posted by Kevin AKA Hubcap View Post

      You said you got what you paid for. What more do you want.

      IMHO you are way off base.

      Check Yourself.
      Just to clear some things up - I am NOT planning on forcing the issue with PayPal - that would be unethical, as someone previously pointed out.

      My two main points with this thread are these:

      1) Due to a combination of a mismatched perception on my part and poor customer service on theirs (I'm talking about the way they corresponded with me, NOT the fact that they didn't grant the refund), I've mentally switched from a happy customer to a disgruntled customer. Mental frames of mind are very powerful and influence future behaviour (Highly recommend reading Predictably Irrational by Dan Arielly by the way).

      Q. Are there other creative ways they as a vendor could have dealt with this situation better, thus not leaving me feeling like I was hung out to dry?

      2) Have refund guarantees been effective in boosting sales on your products, and/or have they been effective in helping you make a purchase decision.
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  • Profile picture of the author LB
    People who are used to IM, are often surprised that in the "real world" refunds on many digital products are nonexistent.

    In short, yes, the burden is on you for not reading the terms before ordering. I understand your frustration though, live and learn.

    Also, to the person who mentioned Paypal...they will not give refunds on digitally-delivered products.
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  • Profile picture of the author 1bad55
    BUYER BEWARE! You have to read the fine print. If it says no refunds then no refunds.

    This is very frustrating and if you pushed it I am sure you could get your money back but is it worth the time and effort?
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  • Profile picture of the author Steve Wells
    I've adpoted a "No Refund" Policy on my products, because they are digitally delivered NON tangible goods.

    #1 If I give them a refund, they cannot give me back my product
    #2 I make sure that people know ahead of time what the product looks like and what they are getting. By either detailed clear images or video, or both.

    Refunds online for digitally delivered products have been done it seems by most if not all online marketers I've seen here on the warrior forum.

    I believe it has been considered a selling point of assurance, but also, I believe that people are afraid that if they do not offer a "Money Back Guarantee" that no one will buy their product.

    I do not believe this to be true, unless you have a bad reputation of not delivering what your sales letter promises or you do not describe and present your product well.

    My type of products are graphics related, so they are easy to show ahead of time. And in my opinion, no one has an excuse to ask for a refund for the product considering I show them ahead of time what they are getting.

    There is a possibility of "Download Issues" which could come into play, but those can be resolved easily and quickly.

    Now, with other digitally delivered products, such as INFORMATION in the form of a video or pdf/ebook, I could see that a refund policy would need to be used, because the customer never actually gets to see what's in the product, just the sales hype associated with it, and possibly a tid bit of reveal.

    So, I believe that the refund policy for digitally delivered non tangible items has its place online, but it depends on the product that is being sold.
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  • Profile picture of the author WeavingThoughts
    Unless they explicitly stated a no questions asked unconditional refund guarantee you don't have a reason to complain. You should have checked the stuff before purchasing.
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    • Profile picture of the author kencalhn
      most themes have a list of functions and features, plus a live demo, plus you could ask the author specific questions before buying... I never heard that PEBKAC acronym, lol, thx. Template sites don't give refunds or else people would just rip off templates. That's why there's Previews so you can test it and see what exactly it does Before buying.

      Ive also bought templates I've ended up not using (most of them, of hundreds I've bought), but I chalk it up to, hey that's life. I've paid top dollar for tons of templates and use just a fraction of the stuff I've bought. So nowadays I make sure the template/resource is a perfect fit for a specific project, before buying (I used to be a "bright shiny object" buyer, now I'm calmer).
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