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Refund policy abuse really drives me to the edge

by GeorgR.
32 replies
Like several other warriors i have a couple of products which i sell in WSOs and on web sites. With the creation of the product(s), i decided to give a very lenient "No questions asked" refund policy.

I know of other warriors who also sell digital products (software) who obviously changed their refund policies to "No refunds whatsoever" - at first this seemed odd to me and not fair for to the buyers.

But throughout the years i now understand why they did it.

-> The refund policies abuse is "slowly" becoming utterly ridiculous!

Mind you, we are not talking about several hundred dollars software, nor monthly "fees" or whatever - but instead of products which cost anywhere from $19 to $47 one time for life-time use.

( A good example would be Incansoft where i know that their prices are also very low and where i know that they added the "No refunds whatsoever" policy.)

People buy a product of "decent" complexity, that is, it might take some days to learn the product and to realize the potential - while at the same time not being too complicated so normal humans can actually use it ...

10 minutes after the purchase they already want a refund since they allegedly already found out the product(s) not for them, not working right, doesn't meet their requirements etc..etc..

Some people give reasons for the refund where its obvious they didnt even read the documentation AT ALL.

Some people want technical support (which i usually give as far as i am able to) via email, chat even...where i spend several hours of my time to set up/explain/trouble shoot product to them - for the mere $47 they paid for the product. (Some even write emails they want coaching, requesting that i teach them things like how to use Adwords right etc...which they assume must be included in the $47 they paid...) And then later still have the audacity (sorry) to request a refund because there is a problem with their hosting setup etc. which they could easily solve by using another hosting, etc..

Here is what i say:

In Internet Marketing, as so often, it is about investing and expected ROI. There are people who spend thousands per day on Adwords because they have a good ROI..they spend $1000/day but also *make* this amount or more every day. Or they purchase some several hundreds dollars software/system which will make them a multitude of what they initially paid.

For the sake of it, if you need to think twice to spend a few bucks and fail to see that you could have a good ROI from this then please, please dont buy in the first place. If you think you need to come up with some cleverly "thought out" reasons to get back your $47 you should ask yourself whether internet marketing is really right for you.

( As for us software developers, we are already pretty much screwed since i know that many warrior's products are wildly shared on forums "for free" already, even if they only cost as little as $19... )

Sorry for the rant.
#abuse #drives #edge #policy #refund
  • Profile picture of the author Steven Wagenheim
    George, over the years, I have become numb to refunds. I used to write
    to the person asking what the problem was, trying to resolve it if I could.
    If it was obviously a serial refunder (refunded in 5 minutes) I would write a
    very scathing email to the scum bag.

    Today, I reply to the email request with one word and move on.

    "Refunded".

    If it's a blatantly obvious serial refunded, I go into DLGuard and ban the
    person from buying anything else.

    Life is too short to get worked up about something that you have very
    little control over. If somebody is hell bent on getting a product for nothing
    or expecting $10,000 worth of support for a $27 product, they're going
    to try to pull it off as hard as they can.

    The beauty of the whole thing is this.

    YOU are in control of how you handle it.

    If somebody writes and says, "I expect you to do this and this and this
    or I want my money back," you have the power to say one simple little
    two letter word.

    No.

    And then refund them and move on.

    Once I learned to understand this and accept this, my business became
    a breeze to run, at least in that area.

    I no longer get worked up about refunds or unrealistic demands on my
    time.

    2 minutes at PayPal resolves the problem.

    You may want to adapt this mindset for your own peace of mind.

    As for NOT offering refunds, it will probably cut down on sales, though you
    will have to test this for yourself. Everybody's business model is different
    and some people work very well with a no refund policy.

    The only way to find out is to give it a shot.

    Good luck to you my friend...and don't stress over it.

    Life is too short.
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    • Profile picture of the author Kim Standerline
      If it's an obvious refund I don't even bother replying to the email. I just refund and move on. Serial refunders are bottom feeders and not worth the effort of typing a reply

      Kim


      Originally Posted by Steven Wagenheim View Post

      George, over the years, I have become numb to refunds. I used to write
      to the person asking what the problem was, trying to resolve it if I could.
      If it was obviously a serial refunder (refunded in 5 minutes) I would write a
      very scathing email to the scum bag.

      Today, I reply to the email request with one word and move on.

      "Refunded".

      If it's a blatantly obvious serial refunded, I go into DLGuard and ban the
      person from buying anything else.

      Life is too short to get worked up about something that you have very
      little control over. If somebody is hell bent on getting a product for nothing
      or expecting $10,000 worth of support for a $27 product, they're going
      to try to pull it off as hard as they can.

      The beauty of the whole thing is this.

      YOU are in control of how you handle it.

      If somebody writes and says, "I expect you to do this and this and this
      or I want my money back," you have the power to say one simple little
      two letter word.

      No.

      And then refund them and move on.

      Once I learned to understand this and accept this, my business became
      a breeze to run, at least in that area.

      I no longer get worked up about refunds or unrealistic demands on my
      time.

      2 minutes at PayPal resolves the problem.

      You may want to adapt this mindset for your own peace of mind.

      As for NOT offering refunds, it will probably cut down on sales, though you
      will have to test this for yourself. Everybody's business model is different
      and some people work very well with a no refund policy.

      The only way to find out is to give it a shot.

      Good luck to you my friend...and don't stress over it.

      Life is too short.
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  • Profile picture of the author charlesburke
    Hi George,

    If it's any consolation, we all experience this thieving by "professional refunders." When I started about 10 years ago, they drove me up a wall - for all the reasons you mentioned.

    I write mostly motivational / inspirational material, and when someone buys the book and then ten minutes later writes that it disappointed them, it's clear they're just taking advantage of the guarantee policy. And of course it was a real irritant to me.

    Then I thought a little deeper.

    These people, when they steal a book, it doesn't matter if they read it a hundred times because their poverty mindset assures that they'll never get any of the real meaning from the material - they can't... that capability isn't in them. They may have gotten the book for free, but they still have nothing. The truth is, no matter how hard they try to steal from me, no matter how many times they read the contents, they can't get any of it.

    So I suggest that you might want to take this same attitude. It'll save you lots of fretting and maybe even prevent a few ulcers. After all, anybody whose thinking is so poverty-riddled that they don't want to give value in exchange for what they receive, those people will never amount to anything.

    They're basically just telling the world they're such losers that they NEED to cheat. They're convinced that, without cheating, they'll never be able to keep up with everybody else.

    Isn't that pitiful? Fortunately, they comprise only about 1% of my "customers."

    Cheers from warm and smiling Thailand,
    Charles
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  • Profile picture of the author Sheryl Polomka
    I agree George it is very frustrating when you are asked for a refund and it is blatantly obvious that they haven't given the product a go or that they always intended to get a refund.

    But like Charles and Steven both said, you do need to just refund the customer and move on. There is no point letting it get you down - it certainly isn't affecting them any if you are feeling down about it. Just put it down to being a part of business and move on.

    Take care
    Sheryl
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    • Profile picture of the author Shaun OReilly
      Refunds are part of this business.

      Serial refunders are an unfortunate part of this business.
      You can either resist this or accept it as a part of doing
      business on the Internet.

      Having a refund policy that has a money-back guarantee
      will normally INCREASE your sales and overall profits - even
      though refunds may go up.

      Focus on the people who DO want to genuinely buy what
      you have to sell and don't let the serial refunders affect
      you.

      Also...

      I think it's important how you deal with refunds as a seller
      on the Internet. Treat people with respect - even refunders
      - as you can't always be sure if a refund is genuine or not.

      I've refunded some people who have come back to buy from
      me again and not then refund on their subsequent purchases.

      Give refunds promptly and courteously. I send refunders an
      e-mail saying that I'm sorry that the product didn't meet their
      needs and wishing them all the best for their future.

      Karma rules.

      Dedicated to mutual success,

      Shaun
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      • Profile picture of the author SteveJohnson
        Originally Posted by Shaun OReilly View Post

        PayPal REQUIRE that you honor a 60-day refund period too.
        This concerns me a little - can you point me to where PayPal says this? There have been times when I've refused to refund, even gotten my PayPal account rep involved, but they've never mentioned this policy.
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        • Profile picture of the author tpw
          Originally Posted by SteveJohnson View Post

          Originally Posted by Shaun OReilly View Post

          PayPal REQUIRE that you honor a 60-day refund period too.

          This concerns me a little - can you point me to where PayPal says this? There have been times when I've refused to refund, even gotten my PayPal account rep involved, but they've never mentioned this policy.

          Anyone can dispute a physical product or service within 60 days of purchase. Any time past the first sixty days, as a seller, you can no longer click the Refund button, but rather you must Send Money to issue refunds beyond the first 60-days.

          Regardless of whether you agree or not, PayPal may rule against you.

          I see one particular thing happen often with my service that I always dispute and always lose. I would give you the details, but doing so would only invite the vampires to do it to more people more often, so I will stay mum on this.

          However, as of recent, PayPal has taken the stand that they do not enforce any guarantees on digital products, beyond product delivery.
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          • Profile picture of the author donhx
            Originally Posted by tpw View Post

            However, as of recent, PayPal has taken the stand that they do not enforce any guarantees on digital products, beyond product delivery.
            Interestingly, Amazon does not refund digital products. The product cannot be returned, so they say it is pointless to offer refunds.
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        • Profile picture of the author RogerAderholdt
          My position over the years has been to tell my customers EXACTLY what they are going to recieve and put it in writing. Then I tell them I have a NO REFUND Policy unless I fail to deliver what I promise.

          I make them agree in WRITING that they will STUDY, Read and Listen to every part of the training that I have in place for the product BEFORE they contact me with questions.

          I have found it to work very well.

          Can't remember the last time I had to give anyone a REFUND because I always DELIVER what I promise.

          I feel your pain though George... it would DRIVE ME CRAZY having to give back money you have worked hard for.
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      • Profile picture of the author Johnny Slater
        Shaun,

        This is incorrect. Clickbank requires you honor a specific refund period but PayPal does not.

        From the PayPal User Agreement:

        4.9 Your Refund Policy and Privacy Policy. We recommend that if you are selling goods or services you have a published return policy and a published privacy policy on your website or at your point of sale.

        From the PayPal Commercial Entity Agreement:
        1. Refund Policy must be on PayPal Customer's Website. If you limit refund/exchange terms or other specific conditions for sales, your policy must be clearly provided to your customers prior to the sale, as part of the sale confirmation process. Proper disclosure would include wording that is prominently displayed and states "NO REFUND, EXCHANGE ONLY" or something substantially similar and includes any special terms. NOTE: Qualifying your refund or exchange terms does not completely eliminate your liability for a refund because consumer protection laws and Association rules frequently allow the cardholder to still dispute these items.
        Since the vast majority of Internet Marketing sales are digital purchases they are not covered under buyer protection so PayPal pretty much says buyer beware. You do NOT have to give refunds if you use PayPal and they are fully clear and fine with a "no refund" policy as long as it is clearly stated on your sales page.


        Originally Posted by Shaun OReilly View Post

        PayPal REQUIRE that you honor a 60-day refund period too.


        George,

        Having a "no refund" policy can cause you to get fewer sales as others have noted, but there is a bit of math that most people over look.

        Lets look at two examples:

        1) $10 product with a no questions asked refund policy. This makes 10 sales and 3 refund. You have made $70.

        2) $10 product with a "no refund" policy. This makes only 8 sales but since you don't process any refunds you make $80 instead of $70.

        Yes, you can end up making less with some products, but you also end up making more with some products. It is a bit of a wash and actually pretty much evens out over time.

        Some people will argue that it isn't fair to the customer to not give them a refund if they don't want to use your product. However, if you have a clearly stated "no refund" policy then it is the customers responsibilty to make sure that the product is something they can and will use before they purchase it. If they use it or not is not your responsibility.

        Your only responsibility is to deliver what you promise on your sales page. If you have done that then everything else is beyond your control and not your responsibility.
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        • Profile picture of the author Shaun OReilly
          Originally Posted by Johnny Slater View Post

          Shaun,

          This is incorrect. Clickbank requires you honor a specific refund period but PayPal does not.

          From the PayPal User Agreement:

          4.9 Your Refund Policy and Privacy Policy. We recommend that if you are selling goods or services you have a published return policy and a published privacy policy on your website or at your point of sale.

          From the PayPal Commercial Entity Agreement:
          1. Refund Policy must be on PayPal Customer's Website. If you limit refund/exchange terms or other specific conditions for sales, your policy must be clearly provided to your customers prior to the sale, as part of the sale confirmation process. Proper disclosure would include wording that is prominently displayed and states "NO REFUND, EXCHANGE ONLY" or something substantially similar and includes any special terms. NOTE: Qualifying your refund or exchange terms does not completely eliminate your liability for a refund because consumer protection laws and Association rules frequently allow the cardholder to still dispute these items.
          Since the vast majority of Internet Marketing sales are digital purchases they are not covered under buyer protection so PayPal pretty much says buyer beware. You do NOT have to give refunds if you use PayPal and they are fully clear and fine with a "no refund" policy as long as it is clearly stated on your sales page.
          I didn't know that Johnny. My bad.

          Thanks for clarifying the refund situation with PayPal when
          it comes to digital products.

          That said...

          I still prefer to offer a no-quibble refund because it increases
          total sales and profits and more decent customers enter my
          funnel. I'll accept serial refunders as an unfortunate part of
          the process.

          Dedicated to mutual success,

          Shaun
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          • Profile picture of the author Devid Farah
            I would not apologise for it being a rant as it came across as a constructive argument for not giving a refund.

            I know of marketers who now use paydotcom as opposed to clickbank for just this reason.

            Sure there are some people out there who genuinely find your product isn’t for them but, there are others who buy the product, find it great to use and then ask for a refund without having to hand the product back to you e.g. they can still carry on using it even after the refund.

            So why should your time and effort in producing a product be wasted?

            It shouldn’t, and that’s why your post is not a rant.
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        • Profile picture of the author oneplusone
          Originally Posted by Shaun OReilly View Post

          Refunds are part of this business.

          PayPal REQUIRE that you honor a 60-day refund period too.
          Originally Posted by Johnny Slater View Post

          Shaun,

          This is incorrect. Clickbank requires you honor a specific refund period but PayPal does not.
          ... and I thanked your post Shaun, thank you for embarrassing me in front of over 250,000 people!

          I'm joking of course, I was agreeing with the bottom half of your post
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  • Profile picture of the author Dave Rodman
    Banned
    For every sale you lose to refund, remember how many sales you make because you have a refund policy in place.

    If you have a high enough refund % that it is bothering you, then maybe YOU'RE doing something wrong. Either with the software, instructions, or otherwise.

    Because in my businesses, refunds have never been a problem.
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  • Profile picture of the author InternetSuccess001
    I agree refunds are annoying. However, they actually help you in a way.

    Those that do get the refunds tend to tell others about the product or service (not necessarily how they got a refund though), which can actually boost your sales in the long run.

    Unless your income is low, don't worry about it. Also, if you have any kind of significant income (i.e., say at least >$5k/month), you should have someone else handling those for you.

    John
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  • Profile picture of the author Zeus66
    It's human nature for this to bug you, but as Steven suggested, try to become numb to it and just do it. Cost of doing business, sadly.

    But I recently had a guy buy something that I offer a freaking refund guarantee for right on the sales page, and instead he started a dispute at Paypal. ARGH! Those are the ones I truly cannot abide. So, I sent the flying monkey to his house. He now understands that you never mess with Zeus and his angry monkey.

    Stop looking at me like that. :p
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    • Profile picture of the author Steven Wagenheim
      Originally Posted by Zeus66 View Post

      It's human nature for this to bug you, but as Steven suggested, try to become numb to it and just do it. Cost of doing business, sadly.

      But I recently had a guy buy something that I offer a freaking refund guarantee for right on the sales page, and instead he started a dispute at Paypal. ARGH! Those are the ones I truly cannot abide. So, I sent the flying monkey to his house. He now understands that you never mess with Zeus and his angry monkey.

      Stop looking at me like that. :p
      Folks, John's meds are finally starting to take effect.
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      • Profile picture of the author Silas Hart
        I do not make refunding easy. My merchant account fights chargebacks as much as they can, and I dislike giving refunds. I see my eBooks and other digital media as information, I can not suck the knowledge you attained from my eBooks out of your brain. You can not ask your college or university for a refund after you go and attain knowledge for a year or two.

        However, I don't sell products on making money online or anything like that, and my customers are unlikely to purchase another product or eBook from because I sell niche DIY products.
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        • Profile picture of the author Dave Rodman
          Banned
          Originally Posted by FaJeeb View Post

          I do not make refunding easy. My merchant account fights chargebacks as much as they can, and I dislike giving refunds. I see my eBooks and other digital media as information, I can not suck the knowledge you attained from my eBooks out of your brain. You can not ask your college or university for a refund after you go and attain knowledge for a year or two.

          However, I don't sell products on making money online or anything like that, and my customers are unlikely to purchase another product or eBook from because I sell niche DIY products.
          If you advertise a refund policy and then fight all refunds, then who is scamming who?

          This isn't talking about you because you might not have a policy. But people that try to avoid giving refunds (when they offer one) are just as big of scammers in my book.
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    • Profile picture of the author Tom B
      Banned
      Originally Posted by Zeus66 View Post

      ut I recently had a guy buy something that I offer a freaking refund guarantee for right on the sales page, and instead he started a dispute at Paypal. ARGH! Those are the ones I truly cannot abide. So, I sent the flying monkey to his house.
      I have one just like that happening right now.

      He even quoted the text on the sales page saying to email me of you want a refund.

      I told him that it never said to start a dispute on paypal but to email me.

      He decided it was better to go through paypal. I will always fight a dispute on paypal.

      It is still going on. If he had emailed me he would have received his refund by now.
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  • Profile picture of the author TZ
    Just make sure the ebook totally delivers the goods and don't give refunds. Tell them you don't give refunds and why you don't give refunds.

    I've bought probably over 30 - 40 ebooks or digital products in the last 7 years and I have never asked for a refund - WHY?? - because if the ebook is under 50 bucks and it has any tidbit of info that was valuable it was worth it to me.

    Also, buying ebooks gives a good idea of what not to do and what to do when you someday create your own.

    To me it's pride and reputation thing. Why would you give a refund when the customer is GETTING the GOODS.

    Do I ask for a refund when I buy a baseball bat, and I don't take the time to learn how to swing properly?
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  • Profile picture of the author tpw
    I see it too with the things I sell on forums -- nothing against you folks....

    But there is a certain type of person who hangs out here to play refund games. I honestly don't see it on products I sell exclusively outside the forums.

    All of the serial refunders annoy me, but the one that really pissed me off was the guy who requested a refund literally three minutes after the purchase of an 80-page report, who said in essence:

    "I read your product and found no value in it. The thing that bothers me the most about that is that you have so many glowing testimonials."
    My gut instinct was to respond that people who spend 3 minutes "reading" a product and then saying the product was of little or no value annoy me, but people who do that and then try to accuse those who actually read the product of lying should be taken out behind the barn and flogged within inches of their life....

    My mentors advised me not to do so...

    The good angel on my right shoulder and the voice of reputation management joined forces and won the day, and no such email was sent...
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  • Profile picture of the author Mike Baker
    It must be difficult to try and smother or become "numb" to this attitude that some people have in regards to buying and then asking for a refund almost straight away. I have only had 1 person ask for a refund from a service I provide due to the person completely misunderstanding the service, and it was hard to give in and finally give that person the refund, so I can't imagine doing it on a regular basis.

    I guess we all just have to accept that this is and will continue to happen as long as digital products are so easy to obtain. Unless some new technology is invented that will make a product un-usable after they have claimed a refund, we are stuck with these buggers for quite some time.
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  • Profile picture of the author winebuddy
    can anyone direct me to a Paypal auto-refund script button that I can just paste on my site or at the bottom of my WSOs?

    That would be a terrific timesaver!
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    • Profile picture of the author Frank Donovan
      I believe George was talking about software in his OP. Given the nature of that type of product, I can see the reasoning behind a no refunds policy. It's also often possible to de-activate software once a refund has been issued; the knowledge of which might deter some potential refunders.

      As far as general digital products are concerned, I see refunds as a cost of doing business - and not a great one at that, if the products are of good quality and honestly marketed.

      Having spent several years in the offline retail world, scraping by on net margins of 5% or less, I don't think I'll ever get over the ridiculously low overheads involved in selling downloadable products.

      Some of these online sellers don't know they're born.


      Frank
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      • Profile picture of the author Tom B
        Banned
        Originally Posted by Frank Donovan View Post

        I believe George was talking about software in his OP. Given the nature of that type of product, I can see the reasoning behind a no refunds policy. It's also often possible to de-activate software once a refund has been issued; the knowledge of which might deter some potential refunders.



        Frank
        That is what happens in my software. In fact, I put it right along side the refund policy.

        It still doesn't help when you dedicated time to the individual. I have found these types of people want the most hand holding and take up the most support.

        A lot of times, I beat them to the punch and refund them without them asking.

        You get a sixth sense when someone will be a pain and refund.
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        • Profile picture of the author Frank Donovan
          Originally Posted by Thomas Belknap View Post

          A lot of times, I beat them to the punch and refund them without them asking.
          Hehe. And I bet that sometimes you find that strangely satisfying.


          Frank
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        • Profile picture of the author tpw
          Originally Posted by Thomas Belknap View Post

          A lot of times, I beat them to the punch and refund them without them asking.

          You get a sixth sense when someone will be a pain and refund.

          Absolutely!!

          I get people who occasionally tell me that since they purchased my service, I must do the service as they tell me....

          I respond by heading to PayPal and clicking Refund!!

          If they come back and beg and plead, which some of them do, I tell them the price has gone up. If they don't pay the new price, I will refund promptly.

          They often pay the higher price, and I still do the work on my terms.
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  • Profile picture of the author Bruce NewMedia
    Good comments here. One thing I have seen pretty consistently is if a person emails you asking if you offer refunds, before they purchase, (and you do) ...they will usually refund.

    Outside of that, I rarely let the few refunds i get occupy my mind. Also, some people are genuinely disappointed and express it in their comments, so I take them at their word.
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  • Profile picture of the author gekko2.0
    I would much rather deal with a customer abusing refunds than a chargeback
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  • Profile picture of the author charlesburke
    John Carlton, the copywriter, has stated that if you're not getting at least a 20% refund rate, you're just not selling hard enough. That's one take on it.

    On the other hand, I'm bothered by my 2% refunds. Got to be a middle ground in there somewhere, though.

    Even the dishonest refunds no longer bother me, but the high point had to be the guy whose request read, "Refund my money - then eat s**t and die."

    Him I should probably have refused.
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  • Profile picture of the author LetsGoViral
    In that case maybe you should consider removing the refund policy.
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