Money Back Guarantees Affect Sales?

by SkiBum
4 replies
Does anyone have any insight on how MBG's affect sales? I know that the natural assumption is that they help sales, but I've been seeing an interesting pattern with some of my own products.

I notice that when I do nothing more than a simple search on the paypal email I am refunding, that an amazingly high percentage of my refund requests seem to come from internet marketers(Can see that they are active in various forums etc..., and some even use the same email for their own product pages!)

My concern is that my products are digital, not in the IM niche, and being downloaded/refunded by other IMers. I am really considering, given the extremely low refund rate on non-IMers, whether the money back guarantee is helping long term or hurting.

Interested very much in other warriors thoughts on this.

Ski
#affect #back #guarantees #money #sales
  • Profile picture of the author shawnlebrun
    hey Ski,

    I've actively tested this in the past, in my own online businesses, simply because when I first started, I too was worried that people would just buy, download, and refund.

    And it used to drive me nuts when i got a refund request.

    But then something happened, maybe a mindset shift... that made me realize i was spending way too much time and negative energy worrying about the tiny % who was going to refund fraudulently.

    In other words, 99% of people are good, honest folks. Sure, you're always going to have the small minority, the 1%, who does steal your stuff.

    and the thing is, I noticed I started worrying about that tiny 1% of negative people more than i was focusing on helping the 99% of the good, honest folks buying my stuff.

    I thought it was foolish to spend so much time, worry, and negative energy on these thieves, giving them my power, when they didn't deserve.

    so that day, i just made a mindset shift and told myself i'd just focus on helping the honest 99% get what they want, and not give anymore of my power to the thieves and 1% who would steal.

    and I've never looked back.

    the truth is, Ski, there's never a fool proof way to protect your stuff, never. if someone wants it bad enough, they can get it.

    but again, it's such a tiny %.... don't lump them in with the 99% of honest, good folks.

    there's never going to be a perfect product for everyone.

    and truthfully, there will be honest refunds, those folks who truly didn't get the value they wanted from your program, and that's fine. refund them... its not worth the time, aggravation, and bad rap for not honoring refunds.

    not only that, if someone wants a refund, they can just go through clickbank or their credit card company anyways, so you might as well take your refund and turn it into a USP.

    now, back to the testing, i noticed that guarantees had an overwhelmingly better conversion rate than no guarantee.

    so, you're going to shoot yourself in the foot if you don't have one... because you'll lose more money in the long run, in sales, than you would fraudulent refunds.

    my advice?

    use the guarantee in YOUR favor and make it part of your USP so you become the one people trust and buy from.

    if someone has a 60 day guarantee, offer yours for a year.

    or make it 150% money back guarantee. or lifetime guarantee, or I'll give you another product as well as the refund.

    bottom line, turn lemon into lemonade and take your worry about guarantees and turn it into a selling point. trump that baby, stick it up there for all to see and be proud of it.

    don't worry about the tiny 1% of thieves, focus on helping the 99% of good, honest folks who that guarantee is for.

    and then, go above and beyond everyone elses' guarantee and make yours a selling point, a USP that gets people away from your competitors... to you.

    LL Bean did exactly this and built a multi-billion dollar brand, and the guarantee was one of the biggest reasons.
    {{ DiscussionBoard.errors[6769808].message }}
  • Profile picture of the author pdrs
    @shawn - he's not really talking about the validity/use of refunds in general but the alarming amount of IMer's that seem to be refunding which I found pretty interesting.

    @OP What is your refund rate in general?
    Signature
    RemoteControlHelicopterReviews.(com/net) - Up for sale! No reasonable offer refused. Great branding for a super hot niche!
    {{ DiscussionBoard.errors[6769828].message }}
    • Profile picture of the author SkiBum
      Originally Posted by shawnlebrun View Post

      hey Ski,

      I've actively tested this in the past, in my own online businesses, simply because when I first started, I too was worried that people would just buy, download, and refund.

      And it used to drive me nuts when i got a refund request.

      But then something happened, maybe a mindset shift... that made me realize i was spending way too much time and negative energy worrying about the tiny % who was going to refund fraudulently.

      In other words, 99% of people are good, honest folks. Sure, you're always going to have the small minority, the 1%, who does steal your stuff.

      and the thing is, I noticed I started worrying about that tiny 1% of negative people more than i was focusing on helping the 99% of the good, honest folks buying my stuff.

      I thought it was foolish to spend so much time, worry, and negative energy on these thieves, giving them my power, when they didn't deserve.

      so that day, i just made a mindset shift and told myself i'd just focus on helping the honest 99% get what they want, and not give anymore of my power to the thieves and 1% who would steal.

      and I've never looked back.

      the truth is, Ski, there's never a fool proof way to protect your stuff, never. if someone wants it bad enough, they can get it.

      but again, it's such a tiny %.... don't lump them in with the 99% of honest, good folks.

      there's never going to be a perfect product for everyone.

      and truthfully, there will be honest refunds, those folks who truly didn't get the value they wanted from your program, and that's fine. refund them... its not worth the time, aggravation, and bad rap for not honoring refunds.

      not only that, if someone wants a refund, they can just go through clickbank or their credit card company anyways, so you might as well take your refund and turn it into a USP.

      now, back to the testing, i noticed that guarantees had an overwhelmingly better conversion rate than no guarantee.

      so, you're going to shoot yourself in the foot if you don't have one... because you'll lose more money in the long run, in sales, than you would fraudulent refunds.

      my advice?

      use the guarantee in YOUR favor and make it part of your USP so you become the one people trust and buy from.

      if someone has a 60 day guarantee, offer yours for a year.

      or make it 150% money back guarantee. or lifetime guarantee, or I'll give you another product as well as the refund.

      bottom line, turn lemon into lemonade and take your worry about guarantees and turn it into a selling point. trump that baby, stick it up there for all to see and be proud of it.

      don't worry about the tiny 1% of thieves, focus on helping the 99% of good, honest folks who that guarantee is for.

      and then, go above and beyond everyone elses' guarantee and make yours a selling point, a USP that gets people away from your competitors... to you.

      LL Bean did exactly this and built a multi-billion dollar brand, and the guarantee was one of the biggest reasons.

      Shawn,

      Really thought filled response, thanks.

      Ski



      Originally Posted by pdrs View Post

      @shawn - he's not really talking about the validity/use of refunds in general but the alarming amount of IMer's that seem to be refunding which I found pretty interesting.

      @OP What is your refund rate in general?
      Overall refund rate is a hair below 5%; 80% of those are pretty easily traceable to IMers.

      Ski
      {{ DiscussionBoard.errors[6769912].message }}
  • Profile picture of the author shawnlebrun
    Ski,

    I've written a ton of copy for the IM market and you'd be quite surprised to learn about some of the so called "guru" refund rates. I've seen some pretty popular marketers with refund rates of 15 to 20% and higher.

    and those were some of the lower ones... so honestly, your 5% isn't nearly as bad as some of the refund rates i've seen, from a lot of big name marketers.
    {{ DiscussionBoard.errors[6770450].message }}

Trending Topics