Refunds and Guarantees on Digital Products

[JonathanBoettcher]

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?

[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.

[MichaelHiles]

You've not bought very much software online with digital content delivery have you.

No refunds are pretty commonplace.

Caveat Emptor

[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!

[Floyd Fisher]

is this paypal? file a dispute.

[MichaelHiles]

Originally Posted by Floyd Fisher

is this paypal? file a dispute.

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?

[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.

[Alp Bozkurt]

The seller wins dispute. He delivered what he is selling. Job done.

[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.

[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

[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

[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

[Kevin AKA Hubcap]

Originally Posted by JonathanBoettcher

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.

[Scott Burton]

Originally Posted by 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.

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.

[Traffic-Bug]

I bought an os commerce template from Almat computers of UK and it was completely broke and totally unusable and I wrote to them to fix it or give me another template and they never responded at all.

[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.

[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?

[WebScript]

Originally Posted by antmen

...

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 ?

[JonathanBoettcher]

Originally Posted by Kevin AKA Hubcap

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.

[bgmacaw]

I do offer a 30 day guarantee on my program, the one in my sig, since I know it isn't the right fit for everyone. The refund rate has been rather small though, probably about 2%. Of course, the program's license does need to be renewed about every 90-120 days so if you refund you eventually lose the use of the program.