A Bold New Refund Model

I think that's great, you will embarrass them but in a polite way, I would really like to know your updates when you implement that.

I think that is actually quite genius! I would love to see some testing on it and how well it can perform in multiple markets and price points. Like $2,000 Guru courses versus $49 dollar ebooks?

You may be on to something brilliant!

Great Idea , Have you tested this option yet ?

Personally, I think that's the only revenue you'll be able to reclaim - imaginary.

This isn't going to work for the obvious reason that others have stated. If you haven't gave them the refund yet, why would they pay you even more money? They want their refund, just give it to them.

After you send their refund, then you can perhaps email them a link to that "special" page, though I doubt very few people will "re-order" due to the fact that you are selling a digital product and chances are they still have it on their computer.

Assume I am user - I purchase a product from your shop @$100 then I click on your reclaim buttom mentioned there assume your product worth $5 and pay that $5 . Now what next ? As per your terms i guess ( what i can understand may be i am wrong) I pay you $100 + $5 now you wil refund me $100 ? and I will take away product with just $5 ? I am little confused here. If you can explain me with example that will be great.

What I had in mind was that a customer goes to a page where they initiate a refund request and then they input the amount of money they wish to pay and the difference is immediately sent to them.

I'm guessing about zero.

Maybe sent to a page as you describe, where they are asked to make a one time binding offer (much like paypal's offer system) ........ if accepted no refunds are allowed from that point on, and they are obligated to pay that amount, and sent the remainder from the original purchase price.......

Then you have to make sure people don't figure this out and use it as a way to get things of yours lower priced............

It could be a last ditch effort to curb profit losses, but it also could turn into a whole new type of monster.............

you also have to seriously think about the precedent and in fact the behavior training you will be teaching to your customers.

if you have many refunds at all, it wont take long for word to get out that your products are essentially available for a donation amount of the customers choice.

if you were to do this on a consistent basis, i would guess you would behaviorally train your list to in fact use this method more often.

that is unless you are seriously over delivering, and if thats the case, your only refunds will be from people who you wont make money from anyway.

my suggestion is to fire those refunding customers and do what you can to block them from further purchases.

experienced marketers need to be careful not to get too tricky and out think ourselves.

also, have you considered what your affiliates might think about this?

This is not a strategy I would want to use. You don't want people to realize all they need do is request a refund and they can then pay whatever they feel like for the product. Word would get out very quickly.

This is definitely setting yourself up for disaster later on down the line.

Refunds are refunds. Usually the person is a cheapskate, which means I don't want to deal with them on ANY level, or they truly did not find value in your product, in which case I don't want them paying anything for the product. Ask them for feedback and try and improve things for your future customers... and then move on.

Besides, this back and forth transferring of small amounts of money will often raise a red flag with Paypal so be VERY careful when doing so.

Sounds innovative! But possibly with some set values such as half price. You may set a precedent.
There is an "IM Insiders Warrior Guarantee" that I've seen. Do you know anything about that?

Actually, I am using this way now: when someone uninstalls my software program, he will be led to a precedent order page. Regular price is $50 and he just pays $12. This really helps.

wow.. amazing how many people misunderstood this.. the OP is not talking about "asking for even more money"... the was talking about offering the opportunity for a partial refund.

I have heard of this being done effectively with physical products.. sometimes they'd even go as far as just offering a credit for an additional purchase - so instead of processing a refund, they end up with another sale!

regarding the fears of being taken advantage of: in most cases, the customer can already simply get a complete refund already.. in this scenerio, there is still a chance to save the sale.

The one worry I would have is that people might not feel nearly as guilty for getting a 50% refund "just because I can", vs getting the 100% refund (note: I am talking about people who abuse refund policies).

Once you get a reputation for offering that kind of deal,
be prepared for a "pay as much as you want" mentality to
pervade your audience.

Most of us who've been selling for over 5 years have
tested that approach at one time or the other - and given
it up as a waste of time.

There are many other ways to monetize refunding customers,
btw. I wrote an ebook called "Refund Profit Secrets" once
about this!

btw, loved the headline of this post! Very compelling.

All success
Dr.Mani

I'd like to see the results after you implement this system. No questions asked refund policies have become the norm. I would bet that the people that ask for refunds do so with many of their online purchases and nothing will stop them from doing so. I've only asked for refunds if the product wasn't as described but there are many people who have no scruples and if they can get a refund they will.

If it does lower your refund percentage and your payment processor doesn't have a problem with it I bet that the idea would spread to other marketers.

Good luck with the new program!

Edit: it took me so long to write this that most of what I say below has already been suggested above but I'll leave it up.

This is interesting. I agree and to extend the sentiment I wonder "If they are asking for a refund what might some of them be communicating?"

They were interested enough to buy the product in the first place and are active enough to ask for a refund so isn't that a real person who wanted what you promised and is just crying out for help? Maybe a skype/phone call from the CEO, CIO or even the author themselves (!) would be a great way to save the relationship and start a great enduring client relationship. $9 might not be worth 20 minutes of your time to pick up the phone or skype and call them up to sort out their issues (which may just be technical) but I agree, if you can salvage the sale you've won a client for life.

However, I myself would probably argue "yeah right, like I want to be sitting around all day ringing everyone who asks for a refund" but if that was actually the case why are there so many people asking for a refund? Maybe it's time to "tone down" that headline? Are me/you/we promising more than is being delivered? Surely anyone who got what they were expecting wouldn't be complaining.

I hope we are at the start of a new marketing era. Hype is out, truth and over delivery is in. Those who offer the most by surprise win. "With respect, I'd like you to consider..." hopefully will start out selling "HEY!, you gotta have this! Only an idiot wouldn't buy this!" Personally, I like speaking with cool folks who are into over delivery and when I find them, price is rarely a major factor in future sales. I'll buy because they treated me well from the start and surprised me with the offering. However, I digress...

Once you do get a refund request it might pay to ask if they would like some help or a call or something. What about a link back to the tutorials? "Sorry to see you go" is polite but pre-supposes that they/we have already made the decision to leave so we just proceed possibly even more upset that no one was interested in even trying to help. That would probably be true in most cases. But the ones you can get back by having the attitude of "sorry, wow. Is there anything we can do to help? We want you to succeed with this" or something similar would probably end up becoming great customers. I know this worked every time in retail. Take an interest in them as humans and they will stay.

If anything (I learned this at a vocational management course) you should be offering a full refund (if they don't want further help to solve their problem), a free coffee AND a voucher for equivalent value on any future product should they wish to buy one. Perhaps even at that point ask if they would like to offer any feedback as to what they thought they were going to get but didn't. I'm not talking about "here's another product to sell" that's just rude the way some people do it. Go the opposite and be grateful you are dealing with a real active consumer who you know is interested in your niche. If they go ahead with the refund, no harm done but if you stop them and say "hey, I'm a real human too, is there anything we can do to help you?" most people will respond I think. Serial refunders and thieves aside of course.

That's why I like the original post's sentiment. It suggests interacting with the PERSON requesting the refund and asking if there is anything you can do to help. They are obviously looking for some sort of a solution. "Maybe one of my colleagues can help - we know a lot of people in this industry and can help steer you in the right direction. However if you are ok and every thing's fine and wish to simply get a refund we understand and hey! Thanks for dropping in and checking us out. We hope to see you one day again. Here's that voucher from before for $9 off our next product."

I know that sometimes it's not possible to have that much conversation with a refundee with some automated refund systems (Clickbank allows you to ask them a question at least) but if they are asking you for a refund via email or a web form I would think it's an excellent opportunity to interact with an active, interested, targeted prospect. Bit of a shame that they were a sale and are now "only" a prospect but think of how much effort you have to go to to get another prospect to listen to your message.

Very innovative idea! What would you do if you get a ridiculous response like "I'd pay $1" or "YOU should be paying ME!"?

I don't care how good your product is people will always refund it if you doing high volume of sales. Me personally I hate the refund process so I don't refund even if I don't get any value out of the product! It might work, you really want know until you test it out and see for yourself. I think what's more important is why are you refunding the product? I would want feed back. If you don't see the value I don't want you buying the product anyway! Test and let us know the outcome.

You can reclaim exactly ZERO.

99% of the people who ask for refunds did not intend to pay anything but intended to "legally" steal your product.

Yes, there are rare cases where somebody makes an error and then asks for a refund but based on my experience with thousands of sales: refunders do not intent to pay a dime.

HP

I guess most people will fill in 0, and that will make you feel that your product is worthless. It will abase your moral, and your confidence, and you'll ultimately want to get rid of the business.

(Then, as recession advances, you'll be broke, and want to commit suicide. Don't do that please. ).

PS: The last part is a joke.

I will offer you $1 as the product's worth, so that I am still able to claim that the product was purchased and not stolen. I don't think you will get anyone pay you more than $5 if you implement this system. let us know how it works out

I think a much better strategy would be to immediately refund them, THEN follow up with a personal email asking for feedback.

This way youve done two things.

1. Honoured the refund, which helps build trust and credibility
2. Established a more intimate relationship

God knows, Ive had my share of BS refunds lately, but I always at the very least, follow up and try to get SOME sort of feedback.

Getting feedback is probably worth more than making a few bucks.

Hang on a minute, isn't that an assumption?

What if the product just isnt right for the buyer?
What if your product sucks?
What if they misinterpreted what your product actually was?
What if ...
What if ...

I think you could be jumping to conclusions if you think that 100% of refunds are due to pricing alone.

Don't forget to change your current refund policy on your sales copy if you're now going to force people to go through hoops to claim the refund you're currently offering.

Your current refund policy won't cut it....

It's real simple, and it has been suggested a thousand times before. Don't offer a refund policy. You have a product which can be kept even with a refund. As it's a digital purchase, you shouldn't be offering a refund anyway. So many large corporations who sell digital products DO NOT OFFER REFUNDS. For example, subscription to games like World of Warcraft don't offer a refund. Some website script sites don't offer refunds. It just makes sense.

Do this - UNLESS you aren't confident with your product, or aren't being 100% upfront. Why else would someone need a refund, if they know exactly what they're buying?

How can we sell (bundle) our info products in such a way that when someone requests a refund, it deletes the product from their computer?

The same way a trial version of software expires?

erm sorry if i defer,

but this doesnt make sense.

refunds are part of business.

by doing that [which is the 1st place doesnt make sense, why would someone pay extra when they wanted a refund] you harm your reputation more and the next time you release a product you will see its effect.

instead think of something creative that will harm them if they go for the refund.

like i know of one guy who make a course but instead of just giving it all out he does a month by month thing.

so if you want to know course 2 u have to stay tru, if u refund course 1 u wont get to see course 2.


that is putting creativity to good use.
and not fight with "bad" customers which harm u in return.

Or you can simply...

1: Create a killer product

2: Accept refunds as a cost of doing business

or

3: Remove the "no questions asked" part from your guarantee and send them an email asking why etc before you refund.

I am a strong believer in taking feedback and making a better product - always tweaking always improving. Refunds are a part of business.

I like the combination approach where you can offer a question instead of just processing the refund.

Would you like another one of my products (choose below) for free instead of a refund, or would you prefer the refund. Might save a few refunds, and still keeps your credibility.

Will never work

Furthermore, i think the customer will feel "cheated" because they paid a certain amount..and all of a sudden they have free choice to pay "what they want" to keep the product.

There are quite some reasons why i think this simply won't work in reality.

One example would be word of mouth spreading that there is this really cool site where "you only need to ask for a refund" and then you can buy product X for a penny or two.

Actually, the whole thing might backfire.

Seems like a good idea, but it'd be tough to get it to catch on.

Sounds like a terrible model IMHO. Here's why.

1. Serious refunders will get offended and simply "chargeback" their accounts
2. Disappointed refunders will pick around 9.99 and start to think they can do this with all your products guilt free.

might turn full price buyers to partial refundeers.... or worse! There are ways it could work if implemented carefully, like they only see this option after they have submitted for a refund... its a tricky one, there is a bit of potential tho..

it is a good idea, but you still going to get the serial refunds asking for 50% refund as they know you would rather pay 50% instead of the lot!

better just go for the no refund policy!

or refund upon proove they tried system and it neva worked

It's a nice idea, but ofcourse that won't stop folks paying 0.01, or even a slew of refund requesters whose sole aim is to get it for 0.01

Indeed, boldly stupid.

-Chris

I'd be interested in hearing more from people who've tested this.

It seems to me (and I have no data to justify this premonition) that MMO products wouldn't fare particularly well with this kind of policy.

But perhaps it could work in other niches. I have a $97 music training product and I've only had 1 refund request via email and the lady told me that she just thought it cost too much for the value that she got from it.

Had I forced her to initiate her refund request through a page that refunds the difference between my price and what she THOUGHT it was worth, I might have reclaimed $30 or so and I'd be totally cool with that.

But I'll definitely try something like this on my next product and try to get some good data. But I suspect that whatever conclusions I get from the numbers won't generalize into other niches or even other products in the same niche.

Should be simple enough to integrate PayPal's partial refunds with a script on your refund page...

Nice inputs here

Looking on the pros and cons...buyers' side and owners' side

Hi!
That is sort of like an auction, the market sets the price. I was actually thinking of a similar test on a product, let people pay what they think its worth - now this could work both ways, you will obviously get cheap asses lol but perhaps you could give it for free and then also follow up with them a week later with a "what do you think its worth" message, and test it and the product.
I suppose it is like a $1 trial without a cap on the price. A no refund policy is a good idea, I just don't think many people will ask for one if they are dictating the price, besides refund policies help people secure a decision in their minds even if it is free (most people instinctively know they will be sold something at some point, there is no real "free" online lol)
Just be careful with what product you choose, if you've got something of value then you have every right to ask a market fair price and you don't want to under/over value yourself or your business.
There is only one way to find out in you market, go and do it and let's see the result Good luck