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I'm interested in hearing your thoughts on this change in refund policy

by Bkelly301
22 replies
Hey I'm sure that some of you here may have similar experiences...

I recently started using FB advertising (I started about 7 months ago). Prior to that, I was only using free traffic.

The FB advertising was helping me A LOT....for the first 6 months at least.

As of the last month, sales have majorly plummeted.

On top of that, I had a nice little run of refund requests too. So not only was I not making sales, but I was also paying for ad spend AND giving people their money back from a purchase that they made almost a month prior.

I've been offering a "monthly" option and a "lifetime" option for a while now.


My OLD refund policy went something like this:

"Even though our refund policy applies to both the monthly and the lifetime membership options, if you just want to try the site out with the intention of asking for a refund, please choose the monthly option. If you love the site, which we know you will, then you can apply the cost of the first month towards the lifetime membership price. Or if you decide that the site isn't for you, simply ask for your money back and we'll give you a full refund."

Pretty much NO ONE actually listened to that message, and they would just go straight to the lifetime option...then they'd ask for a refund within 30 days.

That annoyed me to no end...

So I decided to drop the refund policy altogether and instead offer a 7 day free trial when someone joins on the monthly plan.

From there, they have 7 days to decide if they want to either:

1.) Not pay
2.) Pay monthly
3.) Pay a one-time fee for lifetime access

To me this seems like an even better deal than a 30-day refund policy because it's literally FREE to try the site.

However, since implementing this change about 3 days ago I've made ZERO sales.

I'm still paying $200/day for ad spend. I'm still getting the traffic to my landing page. However I'm not getting sales anymore.

Obviously I could always change things back to the way that they were before, but I'm just interested in hearing some of your thoughts about this?

Maybe people feel as if "free trials" (with a CC required) are a scam or something?

Let me know what you think. Thanks!
#change #hearing #interested #policy #refund #thoughts
  • Profile picture of the author Frank Donovan
    Originally Posted by Bkelly301 View Post

    "Even though our refund policy applies to both the monthly and the lifetime membership options, if you just want to try the site out with the intention of asking for a refund, please choose the monthly option. If you love the site, which we know you will, then you can apply the cost of the first month towards the lifetime membership price. Or if you decide that the site isn't for you, simply ask for your money back and we'll give you a full refund."

    Pretty much NO ONE actually listened to that message, and they would just go straight to the lifetime option...then they'd ask for a refund within 30 days.
    I think your offers have been falling between a number of stools. Very few buyers sign up with the intention of asking for a refund - at least if your marketing is doing its job. So it's no surprise that most will opt for the better value yearly membership. The question for you is why any buyer should be asking for a refund at all. Do you survey them for a reason when refunding? You might find there's a discrepancy between promise and delivery in their expectations.

    And a free trial that requires a credit card doesn't sound free to most prospects. It's still a pretty major commitment. Free should mean free - or don't offer it.
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    • Profile picture of the author Bkelly301
      Hey Frank, thanks for the quick reply!

      I just wanted to elaborate on a few things below...

      Originally Posted by Frank Donovan View Post

      So it's no surprise that most will opt for the cheaper yearly membership.


      It's actually the opposite. People tend to choose the lifetime option more often than the monthly option!



      Originally Posted by Frank Donovan View Post

      The question for you is why any buyer should be asking for a refund at all.
      The refund rate is pretty low. I don't think that there is any course in existence that has a refund policy, but never has to actually issue refunds!

      IF there is a refund policy in place, some people will undoubtedly take advantage of it!


      Originally Posted by Frank Donovan View Post

      And a free trial that requires a credit card doesn't sound free to most prospects. It's still a pretty major commitment. Free should mean free - or don't offer it.
      I agree completely. However, there's a few things:

      1.) It's a MAJOR PITA to offer free trials that don't require a CC
      2.) This deal is actually better than what I was offering before. Before they had to enter their CC and pay $19 right off the bat. Now the payment is delayed by 7 days.

      Regarding #2, I'm wondering if maybe people would actually rather just pay the $19 right off the bat as opposed to doing a "free trial" first..

      Maybe psychologically it reminds them of Netflix or Disney apps, which also offer free trials with CC required...but they tend to make it difficult to cancel.

      Just a thought!
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      • Profile picture of the author Frank Donovan
        Originally Posted by Bkelly301 View Post

        It's actually the opposite. People tend to choose the lifetime option more often than the monthly option!
        That's what I said - the yearly or lifetime options are better value that the monthly. As I understand you, your issue is with having to honor the higher-priced refunds.

        The refund rate is pretty low. I don't think that there is any course in existence that has a refund policy, but never has to actually issue refunds!

        IF there is a refund policy in place, some people will undoubtedly take advantage of it!
        That's true - but, again, if the refund rate is low, why would you get "annoyed no end" about which option was refunded?

        I agree completely. However, there's a few things:

        1.) It's a MAJOR PITA to offer free trials that don't require a CC
        2.) This deal is actually better than what I was offering before. Before they had to enter their CC and pay $19 right off the bat. Now the payment is delayed by 7 days.

        Regarding #2, I'm wondering if maybe people would actually rather just pay the $19 right off the bat as opposed to doing a "free trial" first..

        Maybe psychologically it reminds them of Netflix or Disney apps, which also offer free trials with CC required...but they tend to make it difficult to cancel.
        I imagine when most people give up their CC details they anticipate a problem trying to cancel, rightly or wrongly. IMO, you lose the major selling point of "free" when you attach that kind of proviso to the offer.
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        • Profile picture of the author Bkelly301
          Originally Posted by Frank Donovan View Post

          That's true - but, again, if the refund rate is low, why would you get "annoyed no end" about which option was refunded?

          Good point!

          I just got hit with 3 refund requests in a row, so I decided that maybe I'd try to figure out a work around that would limit it to ONLY monthly refunds.

          However this thread has convinced me to just keep it simple as it was before.

          Thank you for pointing out the obvious that I was missing
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  • Profile picture of the author DABK
    Free trial translates to lots of money later for many. They're afraid they'll forget to cancel. Or, in the past, they signed up for 7 day free trials, never tested, forgot, got charged. So, they do not want to do that again.
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    • Profile picture of the author Bkelly301
      Originally Posted by DABK View Post

      Free trial translates to lots of money later for many. They're afraid they'll forget to cancel. Or, in the past, they signed up for 7 day free trials, never tested, forgot, got charged. So, they do not want to do that again.

      This makes a lot of sense. Thank you!
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  • Profile picture of the author Kay King
    You are focused way too much on refunds...

    "Even though our refund policy applies to both the monthly and the lifetime membership options, if you just want to try the site out with the intention of asking for a refund, please choose the monthly option. If you love the site, which we know you will, then you can apply the cost of the first month towards the lifetime membership price. Or if you decide that the site isn't for you, simply ask for your money back and we'll give you a full refund."

    Pretty much NO ONE actually listened to that message, and they would just go straight to the lifetime option...then they'd ask for a refund within 30 days.

    WAAAAAY too much information. They aren't interested in making it easier for you and when you mention 'refund' multiple times it may put an idea into their mind that was NOT there to begin with. ex: if I see a seller making a big deal about 'refunds' - I assume there are a lot of refunds.



    I would advise 'quietly' - without explanation/discussion - mentioning there is a 30 day (15 day....10 day?...whatever) refund policy if they find the membership is not for them. Mention it - drop it - move on.



    I personally dislike 'free trials' - if there is a payment method required - 7 days goes quickly and you can end up with refunds requested from those who didn't intend to buy in the first place.


    Believe in your product and present it...provide ONE 'out' for those who are not totally convinced (refund statement) - and keep selling.


    "Sales have plummeted" on FB ads....maybe need a fresh ad? Maybe spring/summer is much slower in sales on FB?
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    • Profile picture of the author GordonJ
      Google CLOUD offers a free trial, you use a cc, BUT, it isn't an auto pay thing, at the end of the trial period, they ASK if you want to continue, if not, no charges. That seems pretty fair to me.

      Gordon

      PS. Agree about all the refund worry.

      Originally Posted by Kay King View Post

      You are focused way too much on refunds...




      WAAAAAY too much information. They aren't interested in making it easier for you and when you mention 'refund' multiple times it may put an idea into their mind that was NOT there to begin with. ex: if I see a seller making a big deal about 'refunds' - I assume there are a lot of refunds.



      I would advise 'quietly' - without explanation/discussion - mentioning there is a 30 day (15 day....10 day?...whatever) refund policy if they find the membership is not for them. Mention it - drop it - move on.



      I personally dislike 'free trials' - if there is a payment method required - 7 days goes quickly and you can end up with refunds requested from those who didn't intend to buy in the first place.


      Believe in your product and present it...provide ONE 'out' for those who are not totally convinced (refund statement) - and keep selling.


      "Sales have plummeted" on FB ads....maybe need a fresh ad? Maybe spring/summer is much slower in sales on FB?
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    • Profile picture of the author Bkelly301
      Originally Posted by Kay King View Post

      You are focused way too much on refunds...

      WAAAAAY too much information. They aren't interested in making it easier for you and when you mention 'refund' multiple times it may put an idea into their mind that was NOT there to begin with. ex: if I see a seller making a big deal about 'refunds' - I assume there are a lot of refunds.

      You are right. I was trying to figure out a way to limit the refunding to just the monthly plan since it sucks refunding people that have paid for the lifetime membership.

      However from a marketing perspective and a product presentation perspective, keeping it short and sweet makes a ton of sense.

      Thank you!
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  • Profile picture of the author Mark Singletary
    I don't think people are out to get you or to get free products just because they saw a FB ad.

    So, I think you need to ask yourself what you are promising that you aren't delivering. Or perhaps there isn't a real gap but in the new customer's eyes the perception of what they are getting is different than when they put in their CC details and ordered.

    Are you still putting up videos on YT? Are you getting refund requests from those clients?

    In my own experience, those who worry about getting a bunch of refunds (whether they have started or not) aren't confident in their product. In your case you have years of videos on YT and clients, and you've done a pretty good job. Be confident in what you are selling. I would run the other way if I caught even a whiff of the owner is worried about refund rates. It destroys my confidence as a potential client.

    Mark
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    • Profile picture of the author Bkelly301
      Originally Posted by Mark Singletary View Post

      In my own experience, those who worry about getting a bunch of refunds (whether they have started or not) aren't confident in their product. In your case you have years of videos on YT and clients, and you've done a pretty good job. Be confident in what you are selling. I would run the other way if I caught even a whiff of the owner is worried about refund rates. It destroys my confidence as a potential client.
      Hey thanks for the reply.

      As I said, my refund rate was never extremely high. However my main objective was trying to stop people from asking for refunds on the lifetime membership because it's a big refund to give.

      The whole reasoning for that long drawn out message was to tell people that IF they just wanted to "try out the site" to please choose the monthly option.

      That message was up there for about 7 months, and it didn't affect sales at all.

      It also didn't make people listen either...some were still joining on the lifetime plan anyway, and then asking for a refund within the 30-day period.

      The fact that people were not listening to the "please choose the monthly option" message was thing that was annoying me, hence my reasoning for trying to change this refund policy to eliminate the possibility of lifetime refunds.

      However this thread convinced me to just get over with it, and keep the refund policy short and sweet (even though it will still continue to annoy me that people don't just choose the monthly plan if they just want to try the site out!)
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  • Profile picture of the author Kay King
    yes, it will annoy you....running a business can have that affect


    If you have already spent or reallocated the funds received for a 'lifetime' plan...making a refund will seem expensive. If you arrange your cash flow so you don't use payments during the 30 days period- or at the least keep a designated 'refund fund'...it won't seem so bad.


    For example, keep an amount equal to THREE lifetime membership fees in reserve at all times to cover 'refunds'. Doubtful you will need more than that at any one time. Not sure why - but refunding money you've SET ASIDE for 'refunds' hurts less than refunding from 'payments'. Makes no sense - but true.
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    • Profile picture of the author Bkelly301
      Originally Posted by Kay King View Post

      For example, keep an amount equal to THREE lifetime membership fees in reserve at all times to cover 'refunds'. Doubtful you will need more than that at any one time. Not sure why - but refunding money you've SET ASIDE for 'refunds' hurts less than refunding from 'payments'. Makes no sense - but true.
      This is a good idea. I am all for any psychological tricks I can think of. I'll give it a shot. Thanks!
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  • Profile picture of the author max5ty
    Speaking strictly for myself...and as an honorary advisor for a couple of businesses that have thousands of members online...

    I never ever concur with lifetime memberships for a whole ton of reasons.

    A monthly membership can be canceled, but it only cancels the month after.

    Myself, I refuse to do a lifetime membership because I've been burnt before. Paid and the next thing that happened was nothing was updated.

    Also, I refuse to do a trial when a CC is required. Or, if it is required, there's at least a 30-day trial period.

    My advice is to just go monthly and add content regularly to keep the monthly fees worth it.

    Just my thoughts but, I think my views have saved a lot of headaches.
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  • Profile picture of the author Asim Arif
    Could you pls share us the service you are offering? Website URL?
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  • Profile picture of the author Bkelly301
    Originally Posted by max5ty View Post

    Speaking strictly for myself...and as an honorary advisor for a couple of businesses that have thousands of members online...

    I never ever concur with lifetime memberships for a whole ton of reasons.

    A monthly membership can be canceled, but it only cancels the month after.

    Myself, I refuse to do a lifetime membership because I've been burnt before. Paid and the next thing that happened was nothing was updated.

    Also, I refuse to do a trial when a CC is required. Or, if it is required, there's at least a 30-day trial period.

    My advice is to just go monthly and add content regularly to keep the monthly fees worth it.

    Just my thoughts but, I think my views have saved a lot of headaches.
    Wow this is an option that I never actually considered.

    You were the one that initially turned me onto the idea of including a monthly option in the first place, and it turned out to be a great idea.

    I always liked the lifetime option because it's a nice big payment, and if I make multiple sales in a day then it's a great day.

    However I'm not sure how things would go if the ONLY option was "monthly".

    I just may give this a shot.

    Thank you!
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    • Profile picture of the author max5ty
      Originally Posted by Bkelly301 View Post

      Wow this is an option that I never actually considered.

      You were the one that initially turned me onto the idea of including a monthly option in the first place, and it turned out to be a great idea.

      I always liked the lifetime option because it's a nice big payment, and if I make multiple sales in a day then it's a great day.

      However I'm not sure how things would go if the ONLY option was "monthly".

      I just may give this a shot.

      Thank you!
      There is also the possibility to bill yearly if you like the 'bigger' paydays. Of course, the yearly charge is usually a couple of monthly charges less than the month-to-month.

      In the long run of things...which it sounds like you're in this for the long haul...you will make more money with monthly or yearly billings than you will with the lifetime subscription.

      Just my thoughts on this.
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  • Profile picture of the author N4PGW
    That was an excellent marketing test and it proved not to work.

    The question comes down to how many refund requests are you getting vs total sales.

    People want convenience. A complicated terms of sale are going to discourage everyone, and to be frank, your ad sounds amateur and unprofessional. That alone will scare your best buyers off.

    If you are getting a fair number (not percentage) of subscribers who stay, then you need to re-evaluate your sales copy. What are the refunders seeing that is attracting them that you are not giving them in your product?

    I believe you should always get a small percentage of refunds, or your add not attracting everyone it can. But, a high percentage of refunds means you are attracting a lot of people looking for something they can't get, or the first month alone gives them everything they want. You also need to consider your target audience on FB.


    I'm blind to what you are offering, etc. so I'll make some general suggestions that you probably already know about...

    Are you split-testing?
    The sales page where they buy?
    The ads for FB Ads?
    The FB target audience?

    Does your service cater to a single month buyer? If so, how do you think you can retain them for more than one month?

    Whatever you are offering is attracting buyers willing to charge for the full year and then refund. It looks like they want something more than a month but then you are losing them on the retention.

    Why?

    These are things you should consider in your mind. (Don't answer me...)

    I also think the services of a good coach will benefit your business in the long-term.
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  • Profile picture of the author Randall Magwood
    "Even though our refund policy applies to both the monthly and the lifetime membership options, if you just want to try the site out with the intention of asking for a refund, please choose the monthly option. If you love the site, which we know you will, then you can apply the cost of the first month towards the lifetime membership price. Or if you decide that the site isn't for you, simply ask for your money back and we'll give you a full refund."

    This is incredibly confusing at first glance. Sounds like you're really concerned about keeping the money. If this is true (and I'm sure it is), don't let them know that. Make the refund policy super simpler, because people will refund no matter what. Test a simpler sounding refund policy and see how that impacts sales.
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  • Profile picture of the author dave_hermansen
    Another idea is to NOT offer lifetime as an option until AFTER the 30 day period has expired. After that, you can upsell them with an email about a lifetime plan (which at that point is non-refundable).
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  • Profile picture of the author savidge4
    This is a classic case of a knee jerk reaction to an instance vs a drawn out pattern.

    I had 3 refunds all real close together... you have forgotten the 100's and probably 1000's of transactions before that.

    Almost in all cases knee jerk reacting and making changes to accommodate the 1% or less overall is a trigger for a greater headache than the issue you are trying to correct. Its just a Murphies law or law of nature or some law... just how things work.

    You hear or see something once... forget it... herre its 2 and 3 times... maybe pay attention... if there is the 2 or 3 in a week? see how next week, the week after and the week after that looks - "Only Fools rush in" ( Cant help falling in love lyric )

    Patience is a thing
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  • Profile picture of the author Moodesburn1977
    i dont think the refund policy is very good to be honest, i know facebook have changed the algorithim and i just dont use facebook for advertizing for free facebook or facebook ads its just too risky, i think i would run into issues if i was wanting any sort of refund to be honest.
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