This type of refund policy...

11 replies
Hey I wanted to test this type of refund policy.

I sell software online and I usually give a 30 day refund policy if the software didn't fit their needs.

Ive been wanting to change it too they can only get a refund if there is a technical glitch, or bug in the software that doesn't let them use it.

Is this type of refund policy frowned upon?

Im curious.
#policy #refund #type
  • Profile picture of the author Tradeout
    It's always a tricky one with software.

    You want to offer piece of mind without loosing your hardwork.

    I suppose it depends on your overall concerns.
    If it is that people will buy it andrefund it, but then carry on using it, you could always create a licensing system.
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  • Profile picture of the author Alexa Smith
    Banned
    Originally Posted by Edwin Torres View Post

    Is this type of refund policy frowned upon?
    By whom?

    Like all refund policies, it's frowned upon by people who want to claim a refund and can't. Other than that, it's up to you: there's no legal obligation to have a refund policy per se (though you might get PayPal disputes and/or chargebacks etc., if you don't).

    The way to reduce the proportion of refunds, often, is to give a longer guarantee. The longer the refund the period, normally, the fewer the refunds requested. That's not to say that it necessarily applies to every individual case, of course. What reasons are the people who currently ask for refunds giving for requesting them?

    I suppose there isn't a way of disabling someone's software, after refunding them?
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    • Profile picture of the author Malcolm Thomas
      Originally Posted by Alexa Smith View Post

      By whom?

      Like all refund policies, it's frowned upon by people who want to claim a refund and can't. Other than that, it's up to you: there's no legal obligation to have a refund policy per se (though you might get PayPal disputes and/or chargebacks etc., if you don't).

      The way to reduce the proportion of refunds, often, is to give a longer guarantee. The longer the refund the period, normally, the fewer the refunds requested. That's not to say that it necessarily applies to every individual case, of course. What reasons are the people who currently ask for refunds giving for requesting them?

      I suppose there isn't a way of disabling someone's software, after refunding them?
      I agree with this post. The only people who tend to frown upon refund policies are usually serial refunders to begin with.

      I would actually advise you to test the refund policy and see the results. If results in you getting less sales, then toss it. If it stops the amount of unwarranted refunds from happening then keep it.
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      • Profile picture of the author Newbieee
        Hey there

        For softwares is actually simple.

        Just make a licensing system.
        Once refund, their software will deactivate.
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        • Profile picture of the author Edwin Torres
          Originally Posted by Newbieee View Post

          Hey there

          For softwares is actually simple.

          Just make a licensing system.
          Once refund, their software will deactivate.
          That's the issue. I currently have it setup with Wordpress, and I don't know how to make a licensing system.
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          • Profile picture of the author Newbieee
            Originally Posted by Edwin Torres View Post

            That's the issue. I currently have it setup with Wordpress, and I don't know how to make a licensing system.
            Me neither man. haha
            Im not technically inclined.

            So what i would do is to outsource this part.
            Get someone to do it for me,.

            But the other issue is what if the outsourced programmer has a back door to it and steals or offer illegal license to blackhat market place.

            The other way is to ask for technical help in the programming section of this forum.

            That about all i can think of
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  • Profile picture of the author GailTrahd
    Like Alexa, I've found that the longer my refund policy on a product, the lower the refund rates - except from people who are going to purchase and then refund anyway.

    However, the percentage of serial refunders vs. those who really are not going to use the software any longer is not worth creating a problem in your sales funnel. Your main goal is to sell the software and keep your current customers happy. If you are getting lots of refunds then check the sales page - maybe you are inadvertently promising something that the software doesn't do?; and check the software to be sure that it functions as promised. Then move on - you can set up a license for the software and revoke that license on those who refund but you have to balance the number of refunds against the time, energy and expense of tracking that system.
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  • Profile picture of the author sbucciarel
    Banned
    It's not uncommon to have that type of refund policy with software or plugins, etc and I recommend it.
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  • Profile picture of the author Mogly
    You can make it whatever you want, but unless you are getting tons of refunds I would go with something insane like 365-no questions asked money back guarantee, to get more sales.
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  • Profile picture of the author SunilTanna
    There are two problems with making your refund policy stricter:

    1. Too strict may discourage sales in the first place

    2. If you are too strict, you risk increasing your charge back rate, which is a lot worse than giving refunds

    A long refund policy has the opposite effect, but also raises the issue of when do you count the money as yours? If your customer can refund after 10 years (say) the money isn't really yours for sure for 10 years.

    If you want to fix your refund rate, apart from your policy, you can look at:

    1. Is your product good enough? If lots of customers buy your product to do X, and you don't do X, yes you can add text saying you don't do X, but not everybody may read it, many may assume you do X anyway, so maybe the best solution is to add X.

    2. Is your customer service good enough?

    3. Maybe you should think about software as a service (this kills bogus refunds). If the customer is using your product, requesting a bogus refund would means he loses access to your service, and/or the data he has already input.
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  • Profile picture of the author Alex Blades
    The best refund policy is an unconditional refund policy. You can use that kind of policy, but there is always going to be a few knuckle heads who will file a dispute with paypal or credit card company if you don't refund them.

    Your best bet would be to protect your software with license keys, so you can shut it off after a refund, and save yourself the headaches.
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