[HARD LESSON LEARNED] How I Almost LOST My Business in 180 Days...

Lately I’ve been seeing a trend over in the WSO area (as well as some other places) of NOT allowing REFUNDS. I’m seeing policies such as…'

• All sales final…
• No Refunds. NO exceptions.
• … and on and on.

Well… to sellers who offer NO REFUNDS guess what… yes you do.

Now, before I continue on, I want to point out that I feel your pain.

It sucks to create a stellar product and launch it to be “bitten by serial refunders” and folks with nefarious intentions such as getting one over on you and winding up with the information product you poured your blood, sweat and tears into – for free.

So, to the “no refund” sellers, I get it and I feel you. This isn’t a post to bash you, or anyone. This is a CAUTIONARY POST.

I remember I got pissed off once about these serial refunders (who run higher than normal in the “IM” space, by the way) and began to run ALL my offers, across ALL my markets with “no refund” policies.

And, I wasn't just saying it either. I STUCK to it.

“Nope. Sorry. No refunds” I’d say out loud waving my finger at my monitor, lol.

That was 7 years ago.

Today I have a 180 day policy on ALL my stuff.

What happened?

CHARGE BACKS

In some instances, lots of CHARGE BACKS.

It kind of went like this….

A customer of one of my many software programs, ebooks, reports or courses would write in or even call and say they wanted a REFUND.

I (or one of my customer service people) would explain that since the product was “digital” we couldn’t offer refunds because the product wasn’t tangible – or a variation of that.

In the end, we stuck to our “no refund policy”.

After a couple months, and I had forgotten all about the refund request… BAM. I’d get a fax from my merchant bank with a “Demand Notice” that explained said customer has disputed the credit card (or debit card) charge, resulting in a CHARGE BACK.

They also explained that the money had ALREADY been debited from my account.

In the scenario of my “continuity” memberships, we handled refunds the same way and a few months later… SAME THING, except WORSE.

Worst because when a member calls their bank to dispute the charge (usually the final month) more often than not, the bank will dispute ALL charges from that merchant (me) and since Visa, MasterCard AND American Express ALL can “go back” SIX MONTHS… this resulted in SIX charge backs every time it happened.

The point is: In every instance, the customer got their money. The card holder policies are in the favor of the consumer and NOT the merchant.

Looking back, I’m not mad about this. It is what it is. But I learned my lesson.

Here’s the take-away:

Like it or not, WE ALL have 180 day (6 months) refund policies because the banks decide, not us.

ANY one of your customers can call their bank and dispute ANY charge, going back 6 months and get a refunded.

So, even IF you say you don’t offer refunds, they’ll get it anyway if they really want to (and they will because if you say “no” when they ask, they’ll get pissed off).

So if that’s the case, just give them their damn money back and move on.

Who needs that person OR their money around anyway?

WHY let them CHARGE BACK on you and HURT your business?

Charge backs HURT you because anything above around 3% (average) will put your merchant account (or PayPal) in jeopardy.

Is THAT really worth it for a stupid $9 refund?

Nope.

I look at it like this, since I don’t want to risk CHARGEBACKS and thus, losing my merchant account, I just state that I offer a “180-Day Money Back Guarantee” and use it as a marketing tool – since I will end up having to give their money back anyway if they want it – or my bank will for me.

I suggest you think about this when thinking of installing a “no refund’ policy.

DISCLOSURES AND SNIPPETS:

• I’m based in the U.S.A. This is based on the laws and V/MC/AMEX guidelines HERE. Don’t know if they’re the same or different in other countries.

• I was selling stuff online, as I still do via my website and when a dispute is filed against an “online” merchant such as many of US, these charge backs are almost IMPOSSIBLE to fight because they’re “card not present” transactions.