Longer refund period, less refunds?

Maybe other people will have other opinions, but I believe that - barring the most exceptional circumstances - it's almost universally true.

Unless perhaps the reason for your refund requests is something immediately recognisable, obvious, and very commonly the same (in which case it might make little difference), I'd instinctively expect that you'll have far fewer refund requests with a one-year guarantee than a three-month one, and maybe fewer still with a five-year one.

I tend to believe this to be true as well.. People put more trust in longer guarantee's and are less likely to request refunds.

yeah I have tested it out, it reduces the refund rates. Infact I have tried out crazy refund tactics. On one of my membership sites here's the refund policy I used.

Guarantee 1 - Try out the system for 90 days, if you don't like it you get 100% money back guarantee.

Guarantee 2 - Try out the system for another 12 months, if you don't like it, prove my system did not work for you and you get 100% money back guarantee where I will refund back 12 month subscription fees plus additional $100 out of my pocket to apologize my system did not work for you.

This infact increased my conversion rates and I hardly got any refunds. Before doing that make sure your product is really good or else you will be shooting right on your foot.

I would have to agree the longer you provide as a term of guarantee the more trust your buyers put on your products, but I am not sure if that apply for refunds.

1 year is too far, maybe you can offer a replace but a refund for one year doesn't sound right. You can sell all years and before the end you get punch of refunds, ..

Starting off with 90 days was good, this is the minimum amount of time I would recommend.

A full year probably won't increase your risk, strangely enough it'll decrease the risk of getting more refund requests.

People naturally in a very fast paced world don't remember everything for a very long period of time. By extending the guarantee period chances are they'll forget all about the 365 day refund period.

In other words, you're taking the heat or pressure off your buyers so the perceived risk is less not more.

But if you are worried, simply split test the two. And see which refund period lessens the number of requested refunds.

Best,


Pete Walker

It probably has everything to do with buyers forgetting they even bought the product. The longer the guarantee, the less likely they are to focus on it at all. It would be interesting to know how many buyers refund at 6 months or a year on the long extended guarantees.

I have a 365 day refund. Only 1 refund so far and it has been up two years. That is out of 220 or so sales.

I never tested anything lower because I had a valid reason to provide a year.

But me thinks it is true!

John nailed it. Some people buy products knowing well before hand thy're going to go for the refund. This stuff is rampant in the fast buck arena of Internet Marketing.

In other less "jungle" oriented markets I believe it's been proven that longer refund periods reduce the number of refunds. But if you're in the make money online game it really doesn't matter much.

I didn't test that but wither you gave a long or short period for a refund some people will go for charge-back

Based on my experience a 60 or 90 day period will not increase your refund rate but will have a positive impact on conversions. Also highlight the fact it is a 'no quibble, no hassle, no small print' guarantee (if it is!). A customer who gets a prompt refund can often be more likely at a later stage to buy another product from you because you have already earned their trust. Another strategy that has worked was to have a 100 day refund period as that is perceived as a 'long' period.

In practise I found that whatever your refund period is, it makes no difference on the 'serial refunders' - as they know upfront they'll simply be buying, saving and then seeking refund - it will make little difference if you have a 7 day or 7 year refund period as they'll want their money back ASAP either way!!!

In the past I have found it useful to keep 'tabs' on serial refunders, although as yet I've not bothered looking into 'blocking' them as they are so very few and far between!

I agree. Most people tend to forget about the product they bought especially when they are not pressured to try the product for a limited amount of time so a 1 year guarantee would definitely lessen the refunds.

• Will a longer refund period reduce refunds?
  That doesn't make any sense. If someone is not happy and wants a refund, he will ask for it be it on the 8th week or on the 8th month.
  An unhappy customer (or a serial refunder) doesn't need half a year to determine whether he'll ask for a refund or not. Unless, of course, we're hoping that the unhappy customer will "forget" about asking for a refund due to the longer time window...

• Will a longer refund period increase conversions?
  Possibly, since it might push those sitting on the fence to take action.

I've tested some of the most radical gurarantees you'll see on the net. Not for the faint of heart.

And hands down the longer the guarantee, the less refunds, provided you have a quality product that delivers the goods.

Speaking as a buyer:
The shorter the guarantee period the sooner and the deeper I scrutinize the product. I tend to look extra hard for negatives before the short window to return it has passed.

But the longer the gurantee, the more I can settle in and use the product, giving me a better opportunity to make it work and a chance for it to perform. Actually if you have a good product the longer the gurantee the better for you to, it gives your customer a chance to master it.

I think the longer you guarantee lasts, the less likely a refund because:

1. the buyer is pleased to see a long guarantee that if they dont see results after a year they can get a refund
2. a year is a long time to get results, so more likely
3. if they havent got results after a couple weeks they stop using it and 'forget' to remind themselves to claim a refund.
4. there is no urgency to claim a refund as 'i'll do it next week'. If they have to claim is soon, then they are more likely to do so.

If your competitors are offering shorter guarantees then I'd test highlighting the longer guarantee in the sales copy and see how it impacts sales. I don't normally look for guarantees so if it's longer or there's something different about it I think you have to highlight it.

I saw a product in the WSO section the other day and it offered a year's guarantee (and highlighted it) where most are 30 - 60 days and it did make me feel like they were more confident in their product.

Another neat guarantee I saw was a bit like "Lose X lbs in weight in 30 days guaranteed". When the guarantee was presented it offered it for 30 days and then lengthened it for another 30 days to make you feel more comfortable. I think that could work well because people are skeptical about 30 day claims but doubling the time takes the pressure and risk off them.

It works provided your product actually doesn't warrant a refund.

The reason to do this is simple - more front end sales.

This longer refund period is still affected by the market you are selling in. My guess is in the IM niche, it would lower refunds, but not as much in other niches.

True..

I found that a 365 guarantee works better than a 30 days..

Cheers,

~Gary

I'm not going to comment on whether a not a longer refund rate makes a difference, but I will comment on the consequences of applying such a technique.

Any serious marketer will have money set aside for refunds. It's sort of a self governed rolling reserve. If you have been selling long enough, you will get a good idea of what your refund rate is and have that money set aside. If you offer a 30 day money back guarantee, then your rolling reserve should last 30 days. The same goes for 60 days or whatever many days you offer a guarantee for.

The problem is that most marketers on this forum are not serious marketers. They may be making money, but they don't have their business ducks lined up correctly. Most of these non-serious marketers will spend their earnings right away, without setting anything aside for refunds.

Another thing to consider is the affiliate that promotes your product. If you are using an affiliate program like Warrior Plus DigiResults, or RAP, then you must consider if these affiliates may or may not want to sell a product that has a long refund period... mainly for the reasons stated above.

It's true. I read it in a book called Cashvertising by Drew Whitman. He said if you want to increase your sales and reduce your refunds, then you have to apply this technique to increase trust for your prospects. Your clients will like the idea of knowing that they can opt out for a long time. But what will most likely happen is that they'll forget about purchasing the product and completely forget that there was a one-year guarantee attached to it. Drew Whitman described a case study where one company extended there product's warranty to a year and they made more sales and less refunds compared to the regular 30 day refund period.

When you have a longer guarantee period, people tend to be more trusting as logically speaking, one would never give a long refund period if the system or the product does not work.

It's funny, all of my refunds have happened with my Clickbank products - none of them occurred with my own affiliate program (powered by Rapid Action Profits).

I've seen several successful sites where because the price is so low, it was spelled out that no refunds are given, and others where there's a lifetime refund policy.

I would think if the products are in the IM niche, and most of the sames come via affiliates, the 'no refund' makes sense (ie, get rid of tire-kickers/etc.), but in less cut-throat areas, long-term refunds go light years towards confidence building.

It all depends upon your audience, I reckon.....

I've seen a dodgy vendor sell with NO REFUND PERIOD. Overall, the combined refund/chargeback rate was WAY LOWER than any product with a 60 day guarantee. Of course, it's very unethical and don't recommend it!

I don't think so.

If the product is bad, people will refund in 1 day after purchase. If the product is good, people will never ask for refund. So it depends on the product, not the refund period.

BTW, just curious, does anyone offer "lifetime money back guarantee"?