Does A Money Back Guarantee Equal Value Really?

31 replies
Fellow Warriors, Your honest opinions please. If a digital item is $10 or under, does a money back guarantee add to the value for you?
With the problems a refund can cause to your Paypal accounts not to mention your conversions, are we all better off not offering a money back guarantee for any digital item priced at $10 or less? I am aware that it is the law in some countries to give a refund on any item on request, but when it's a digital item that is in most cases worth more than the Warrior price, is it fair to the seller to have to offer a refund to supposedly increase it's intrinsic value?
#back #equal #guarantee #money #refund policy
  • Profile picture of the author Tyler S
    No matter what the price is, I find it is best when there is a money back guarantee. It just shows me that the seller believes in their products
    {{ DiscussionBoard.errors[7391698].message }}
    • Profile picture of the author kerrymc
      Thanks Tyler, that's a good point to keep in mind.
      Signature
      {{ DiscussionBoard.errors[7391718].message }}
    • Profile picture of the author Steve Wells
      Originally Posted by Tyler S View Post

      No matter what the price is, I find it is best when there is a money back guarantee. It just shows me that the seller believes in their products
      Lets be honest, most sellers would LOVE not to have to give refunds. Especially Clickbank vendors or affiliates.

      The reason they offer a refund in my honest but not necessarily correct opinion is:

      #1 If they sell on Clickbank they have to offer a refund.

      #2 Because everyone else does, and they are following what other people have done before them.

      #3 Because they are a afraid that they will lose sales, if they do not offer a refund policy.

      #4 Then I guess what you say, that they believe in their product. But I think that most people who take the time to put out a product believe in it...

      Me personally, I do not like giving the refund option to anyone, because:

      #1 My products are intangible goods, they cannot be returned to me if they refund.

      #2 Because anyone who purchases a graphics package or product knows ahead of time what they are getting, and should not buy unless they understand what they are getting.

      Now, with that being said, I know that a lot of people sell informational and educational products, where there is no real transparency, and it makes sense to have a solid refund policy in place for something like that, because they do not know what they are really getting, they only know what the salescopy tells them.

      With software, and plugins, I believe that a refund policy should be in place but worded in such a way that they refund is only possible if the plugin or software does not work or perform the way it is supposed to...

      If the software or plugin is not protected with a licensing script of some kind, they are in boat similar but not identical to mine. They cannot be given the product back, but the customer cannot really see the script in action and really know what they are getting.

      With graphics or graphics products, the product should and almost always is clear and transparent, because NO ONE is going to buy graphics sight unseen, at least no one who is wise.

      Well, that's my viewpoint, it may not be pretty, or 100% correct or accurate and for sure not everyone will agree with what I have written.

      I just know that a refund policy is good in and needed in certain scenarios, and it works well.

      But with certain products and scenarios, it just does not work or does not need to be in place.

      I have given refunds, but I rare occasions, and always for a very good reason.

      I have to this day have had less refund requests than the fingers on one hand. And I am thankful for that, and I still am able to sell products with a no refund policy.

      I believe that a refund policy does not add value, it just reduces the risk in the purchasers mind. Which I guess could be considered added value? But not really because if they are returning the product, it was not very valuable, at least to them.

      To me, when I see a refund policy it does not make me buy the product, it does give me some comfort knowing I have an out if needed though. I buy products because I have a need, or see a future use for the product, and because the product is presented professionally, and in a way that is easy to understand. Refunds are the last thing on my mind.
      Signature
      Need Custom Graphics Work? - Message Me For A Design Quote!
      {{ DiscussionBoard.errors[7392674].message }}
    • Profile picture of the author Coach Anna
      Originally Posted by Tyler S View Post

      No matter what the price is, I find it is best when there is a money back guarantee. It just shows me that the seller believes in their products
      I truly agree with you. It builds trust, confidence and true meaning of customer service.
      {{ DiscussionBoard.errors[7392791].message }}
  • Profile picture of the author Alex Blades
    It gives the buyer confidence, and is much easier on the Paypal account, then chargebacks...
    Signature
    " I knew that if I failed, I wouldn't regret that.
    But I knew the one thing I might regret is not ever having tried. "

    ~ Jeff Bezos

    {{ DiscussionBoard.errors[7391705].message }}
  • Profile picture of the author CyberAlien
    Originally Posted by kerrymc View Post

    With the problems a refund can cause to your Paypal accounts not to mention your conversions,
    If it's a good product, then they shouldn't have to worry about the PayPal refund rate because it will be low
    {{ DiscussionBoard.errors[7391716].message }}
    • Profile picture of the author Corey Geer
      Originally Posted by Chase Watts View Post

      If it's a good product, then they shouldn't have to worry about the PayPal refund rate because it will be low
      Not even remotely close to true.

      I used to work with incredibly cheap people on a daily basis. Whether it's via a marketing product or a service, cheap people are incredibly hard to please and will be the first ones to request a charge back.

      I find it pathetic to see a "money back guarantee" on a $7 product. Who the hell wants to sincerely make it in this business if they aren't willing to risk $7? Besides, knowing you can't get your money back might force you to stop collecting ebooks on your hard drive and put one to use.

      The majority of those low rent people purchasing low end products are just going from product to product disappointed to find that it didn't become an overnight hit for them. Also, a lot of your sales will be from foreigners. Don't even get me started on how quick they are to charge something back for any reason what so ever.

      Look at Clickbank. Those numbskulls offer a 100% money back guarantee for any reason what so ever. Now look at the refund percents of some of those IM products. They're not overly expensive but yet cheap people will always be cheap.
      Signature

      Skype: Coreygeer319

      {{ DiscussionBoard.errors[7391753].message }}
      • Profile picture of the author CyberAlien
        Originally Posted by Corey Geer View Post

        Not even remotely close to true.

        I used to work with incredibly cheap people on a daily basis. Whether it's via a marketing product or a service, cheap people are incredibly hard to please and will be the first ones to request a charge back.

        I find it pathetic to see a "money back guarantee" on a $7 product. Who the hell wants to sincerely make it in this business if they aren't willing to risk $7? Besides, knowing you can't get your money back might force you to stop collecting ebooks on your hard drive and put one to use.

        The majority of those low rent people purchasing low end products are just going from product to product disappointed to find that it didn't become an overnight hit for them. Also, a lot of your sales will be from foreigners. Don't even get me started on how quick they are to charge something back for any reason what so ever.

        Look at Clickbank. Those numbskulls offer a 100% money back guarantee for any reason what so ever. Now look at the refund percents of some of those IM products. They're not overly expensive but yet cheap people will always be cheap.
        Yes and those exact same people are the ones who will start a dispute on Paypal or file a chargeback on a credit card. What are you going to do to stop them from doing that for cheaper products? Do you really think there's no way for them to get their money back simply because you offer no refund and it's a digital product? Would you prefer that they open a dispute/chargeback or would you prefer to to just refund the money? With cheaper people, one of those things is going to happen when they get upset.
        {{ DiscussionBoard.errors[7391781].message }}
      • Profile picture of the author TheFBGuy
        Originally Posted by Corey Geer View Post

        Not even remotely close to true.

        I used to work with incredibly cheap people on a daily basis. Whether it's via a marketing product or a service, cheap people are incredibly hard to please and will be the first ones to request a charge back.

        I find it pathetic to see a "money back guarantee" on a $7 product. Who the hell wants to sincerely make it in this business if they aren't willing to risk $7? Besides, knowing you can't get your money back might force you to stop collecting ebooks on your hard drive and put one to use.

        The majority of those low rent people purchasing low end products are just going from product to product disappointed to find that it didn't become an overnight hit for them. Also, a lot of your sales will be from foreigners. Don't even get me started on how quick they are to charge something back for any reason what so ever.

        Look at Clickbank. Those numbskulls offer a 100% money back guarantee for any reason what so ever. Now look at the refund percents of some of those IM products. They're not overly expensive but yet cheap people will always be cheap.
        I couldn't have said it any better myself Corey. I always shake my head every time I see a "money back" on $7 or $10 items.
        {{ DiscussionBoard.errors[7394077].message }}
  • Profile picture of the author Raydal
    Originally Posted by kerrymc View Post

    I am aware that it is the law in some countries to give a refund on any item on request, but when it's a digital item that is in most cases worth more than the Warrior price, is it fair to the seller to have to offer a refund to supposedly increase it's intrinsic value?

    Generally speaking, offering a guarantee does boost sales but
    you're not compelled to give a money-back guarantee on
    a WSO items. The choice is that of the seller.

    I don't offer a money guarantee on my WSO's. If you want
    that guarantee then buy at the normal full price, but you
    can't have it both ways,--special price and still a money-back
    guarantee.

    Most stores I know would not offer a refund on items sold
    as special discounted prices. Maybe a store credit, but not
    your money back.

    -Ray Edwards
    Signature
    The most powerful and concentrated copywriting training online today bar none! Autoresponder Writing Email SECRETS
    {{ DiscussionBoard.errors[7391758].message }}
  • Profile picture of the author Alexa Smith
    Banned
    Originally Posted by kerrymc View Post

    Does A Money Back Guarantee Equal Value Really?
    I don't think it equals value, but it removes the potential buyer's concern about "the value question" to a large degree.

    Originally Posted by kerrymc View Post

    is it fair to the seller to have to offer a refund to supposedly increase it's intrinsic value?
    No, I don't think it's fair. But I don't think increasing the product's intrinsic value is the purpose of offering a refund guarantee, anyway.

    (I also agree with Tyler's point above.)

    I sell many hundreds of ClickBank products (as an affiliate) every month, and undoubtedly the availability of the no-questions-asked, 60-day, money-back guarantee is a huge part of the reason I manage to do that. But it doesn't "attract refunds" at all, if you promote the right products in the right way to the right targeted traffic. I get very few refunds going through, and that's across a range of 30 products in 8 different niches. Whether people actually claim on a refund guarantee is about product quality and very substantially about how and to whom it's sold. This can be clearly seen from the fact that at ClickBank, the affiliates who have higher-than-average refund-rates tend to have them for every product they sell, while other affiliates have far, far lower refund-rates for those same products. For this reason, the argument seems absolutely irrefutable to me.
    {{ DiscussionBoard.errors[7391763].message }}
  • Profile picture of the author Dennis Gaskill
    As far as I can tell, a dispute will do more damage to your reputation than a refund freely given. I'd guess most payment processors would rather see a guarantee and a refund request honored than no guarantee and disputes filed. I've never worked in that industry though, so like most, I'm just guessing.
    Signature

    Just when you think you've got it all figured out, someone changes the rules.

    {{ DiscussionBoard.errors[7391800].message }}
  • Profile picture of the author Corey Geer
    PayPal isn't as F U about those anymore like they used to be. A simple phone call stating it was a digital product and it was delivered will fix "most" problems.

    As for the scumbags charging back via Credit Card, I'm not sure how they handle that now days. I'd have to look into some more information on that one because I know they want to change how those types of events are handled due to the pure amount of scumbags doing things like that.

    Honestly, I'd prefer not to sell a cheap product at all. The refund rate is FAR lower with an expensive product and the people are far more pleasant to work with and interact with.
    Signature

    Skype: Coreygeer319

    {{ DiscussionBoard.errors[7391913].message }}
    • Profile picture of the author CyberAlien
      Originally Posted by Corey Geer View Post

      PayPal isn't as F U about those anymore like they used to be. A simple phone call stating it was a digital product and it was delivered will fix "most" problems.

      As for the scumbags charging back via Credit Card, I'm not sure how they handle that now days. I'd have to look into some more information on that one because I know they want to change how those types of events are handled due to the pure amount of scumbags doing things like that.

      Honestly, I'd prefer not to sell a cheap product at all. The refund rate is FAR lower with an expensive product and the people are far more pleasant to work with and interact with.
      I definitely agree with you about charging more for products because you end up dealing with higher quality people normally.

      And just so you know, that phone call to Paypal only works with certain types of disputes that are under their Seller Protection policy. If someone files other types of disputes such as Unauthorized Access then Paypal will give them the money back regardless of it being a digital product.

      However, if you're charging enough for products/services then you don't have to worry about any disputes or chargebacks on Paypal. Whenever someone orders or renews, mail them a receipt and keep the tracking information. You can provide that as proof that the product or service was received and are protected under the Seller Protection policy.
      {{ DiscussionBoard.errors[7391930].message }}
  • Profile picture of the author visimedia
    It gives safety to the buyers, but I better to have a trial/ demo version before buying anything actually. But for ebook product, money back guarantee will add value and increase conversion. Just make sure you give really cool product.. less people will ask for a refund.
    Signature
    bedpackers hostel malang
    visiting indonesia, malang city? check in to this hostel.
    www.joinroyalq.net
    {{ DiscussionBoard.errors[7391931].message }}
  • Profile picture of the author Randall Magwood
    A money back guarantee definitely equals value. You're "shifting the risk" and taking the burden off of your customer. And the long the guarantee, the better.
    {{ DiscussionBoard.errors[7392202].message }}
  • Profile picture of the author CaesarSEO
    You will be amazed at how conversions differ when you have a Refund guarantee and when not.

    There will be serial refunders either anyways. For them I usually just refund their money and wish them good luck. I would rather give them back their $7 instead of seeing them skip their lunch or something.

    People who get a refund no matter if they liked the product or not, I'm pretty sure 99% of them will never succeed anyways. They don't seem to be able to see the big picture and stay obsessed with the little things.
    Signature
    {{ DiscussionBoard.errors[7392205].message }}
  • Profile picture of the author misterme
    Originally Posted by kerrymc View Post

    If a digital item is $10 or under, does a money back guarantee add to the value for you?
    With the problems a refund can cause to your Paypal accounts not to mention your conversions, are we all better off not offering a money back guarantee for any digital item priced at $10 or less? I am aware that it is the law in some countries to give a refund on any item on request, but when it's a digital item that is in most cases worth more than the Warrior price, is it fair to the seller to have to offer a refund to supposedly increase it's intrinsic value?
    A money back guarantee takes away the buyer's risk as a reason not to buy. It's not there to add value.

    And because a buyer can charge back just by calling their credit card company and dispute the sale if they really wanted to get a refund anyway, then it makes absolutely no sense NOT to offer a money back guarantee.
    {{ DiscussionBoard.errors[7392214].message }}
  • Profile picture of the author YasirYar
    A money back guarantee proviso on any info-product sold online presents the credibility of the seller. That he is true to his word, this notwithstanding whether or not you will like his product. It also adds to buyer confidence and makes them pursue a purchase because they know for a fact that you will honor your word if your product is not at par with their expectations. I'd say products with money back guarantee often sell more, than those without.
    Signature

    >>>Get your websites ACTUALLY ranked by checking these out: Quantum SEO Labs, Home Page Link Building & SERP Ability. Want to get rid of negative listings? Check out Reputation Enhancer.

    {{ DiscussionBoard.errors[7392411].message }}
  • Profile picture of the author yukon
    Banned
    Does A Money Back Guarantee Equal Value Really?

    Money back guarantee equals fail on digital products.
    Signature
    Hi
    {{ DiscussionBoard.errors[7392438].message }}
    • Profile picture of the author ccole
      As a buyer, money-back guarantee is an added security for me and I am assured that I am purchasing from a credible and trusted seller.

      As a seller, I agree with @CaesarSEO, there will always be the "serial refunders". These people are just twisted and they will always ask for a refund even if you did everything in your power to please them. As they say, you cannot please everyone.

      -Christian
      Signature

      Struggling or behind on your mortgage? Looking for loan modification solutions to reduce your payment? REST Report shows you if you qualify!

      {{ DiscussionBoard.errors[7392581].message }}
    • Profile picture of the author Corey Geer
      Originally Posted by yukon View Post

      Money back guarantee equals fail on digital products.
      At least someone understands.

      I don't get why people need that level of 'security' or so to speak on a $7 product (which is usually what they are). I mean honestly, what are people expecting for $7?

      These are the people who are buying these ridiculous hyped "MAKE $5,000 AN HOUR DOING SOMETHING YOU'VE NEVER SEEN BEFORE" for a measly $7 then going "psh.. I just spent an hour reading that and I didn't make $7" so they head on over to your awesome refund policy and get their money back.

      Sure, you won't have a 100% refund policy but with IM products and cheap product pricing, that's generally the crowd you're going to be working with.
      Signature

      Skype: Coreygeer319

      {{ DiscussionBoard.errors[7393996].message }}
  • Profile picture of the author Young Financier
    No. Especially when you consider that most sellers don't even honor those guarantees.
    {{ DiscussionBoard.errors[7392735].message }}
  • Profile picture of the author BIG Mike
    Banned
    [DELETED]
    {{ DiscussionBoard.errors[7393275].message }}
    • Profile picture of the author Young Financier
      Originally Posted by BIG Mike View Post

      As with most things related to business and marketing, this isn't a question with a simple black and white answer, despite the many responses from those thinking it is one.

      The real answer you're look for can be summed up in a single, four-letter word:

      T E S T

      Different products, price points, markets, etc., all generate different responses to the question. You have carefully test how those you're targeting will respond to a refund versus non-refund policy.

      I used to be of the mindset that offering a no questions asked guarantee was a no brainer way to build credibility, create a zero-risk proposition, slam-dunk, close the sale approach to marketing digital products.

      Then I got sick and tired of the "Tire Kickers", those who buy a product only to check it out and get a refund. On low-ticket, high-volume sales, processing refunds is a royal pain in the ass, sucking up hours of time that could be better spent.

      I decided to test it - after six-months of offering a clearly stated no refund policy, it became obvious that there was absolutely no measurable impact on sales. Since then, it's been my policy for years now.

      Yes, we do get disputes (we win them all) and we do get charge backs - PayPal goes to bat for us on these and we do get a very large percentage of them reversed. However, the number of disputes and charge backs are by far significantly lower than with our original refund policy, requiring perhaps 5% or less of the time it took to process refunds.

      That said, would I recommend that everyone have no refund policies?

      Absolutely not - I'd recommend that everyone test such policies carefully to establish benchmark data and then re-test periodically...especially with new/different products.

      While it's interesting to wax philosophical about the topic, that's all it is and you won't find the answer you need in the discussion. Your answer lies in having a thorough understanding of your market and then testing various types of refunds on your products to determine which is most effective.
      Well said.
      {{ DiscussionBoard.errors[7393439].message }}
  • Profile picture of the author Margaret Jones
    In my experience, No, not at all.
    {{ DiscussionBoard.errors[7393425].message }}
  • Profile picture of the author Plimus
    As a payment processor being the middle man is never easy. Having to determine whether or not the digital product does what the seller says, and deciding if the product was purchased to be used or a quick and easy free purchase by someone who paid can be difficult.

    But I believe that if you have a good product, if you are confident in what you are selling and you believe the price you set it at is comparable to the time spent creating it, then the refund rate will be very low.

    Offering a refund warranty assures the purchaser that you are someone they're willing to risk buying from.
    Signature
    Preciouse
    Community Manager at BlueSnap (Plimus)
    {{ DiscussionBoard.errors[7393614].message }}
  • Profile picture of the author H.Miller
    I don't know that a money back guarantee equals value, but it does make a potential customer feel more at ease with the purchase. Most people never request a refund unless it is a high ticket item that really sucks. But knowing that they have the option to request a refund if they are not happy makes them more willing to spend their money with you.
    {{ DiscussionBoard.errors[7393655].message }}
  • Profile picture of the author FantaMan
    To be honest - NO. Its easy to offer money back gaurentees but if your service is really that great then why would anyone need their money back?
    {{ DiscussionBoard.errors[7393721].message }}
    • Profile picture of the author Alexa Smith
      Banned
      Originally Posted by FantaMan View Post

      if your service is really that great then why would anyone need their money back?
      That's not what it's about, at all, FantaMan. Reading posts #9, #21 and #24 above will help you.
      {{ DiscussionBoard.errors[7393787].message }}
  • Profile picture of the author oleskool
    Generally for $7 I would not ask for a refund. I will take it as a lesson I learned. The product may not have been what I thought it was or it may have been over my head to use. More than $10 I will think about the sales page and what it said, did the sales page say one thing and the product was about something else? Right now I have put in my first ever dispute with paypal for a refund for a that had a guarantee and the product that was product seller has not honored the refund request. The product was a class to learn to take pictures and present them to moms. The product presented to me was not teaching me to take pictures or to market the pictures, this was set-up as a membership site with classes given out once a week. I can't say I didn't learn anything, what I did learn was not what the sales page said I would be taught, that is the basis of my request for a refund of my $29.95.
    Signature

    Are you tried of the make money lies. This is the answer http://forms.aweber.com/form/48/107363348.htm

    {{ DiscussionBoard.errors[7393906].message }}

Trending Topics