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

11 replies
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.
#180 #business #days #hard #learned #lesson #lost
  • Profile picture of the author TeamBringIt
    Glad things worked out "ok" for you. losing your business due, to issues like this is just wrong
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  • Profile picture of the author SteveWF
    That sucks man! Sorry to hear that.

    Really good advice and one that most WSO vendors should
    seriously adhere to. I think the majority already do and just
    like you they use it as marketing tool and I can see how it
    would really well.

    You sound like a guy that's got his head screwed on right so
    I've no doubt that you've put the regrettable experience behind
    you long ago and are already moving on to bigger and better
    things.

    Take care and good luck with everything

    Steve
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  • Profile picture of the author karlmay1980
    Absolutely true and I know it is similar in the UK too.

    By not giving them you just annoy legitimate customers who didn't just buy to get a refund after they took a look and got the ideas, then have no use for it.

    You may even get some reviews saying how well you are to deal with if the product isnt right so that will put people at ease over buying.
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    • Profile picture of the author XponentSYS
      Originally Posted by TeamBringIt View Post

      Glad things worked out "ok" for you. losing your business due, to issues like this is just wrong
      Originally Posted by SteveWF View Post

      That sucks man! Sorry to hear that.

      Steve
      Thanks for the kind words guys. This was a number of years ago and I quickly picked up, fixed the problem and moved on with barely missing a best.

      This isn't meant to be a sad story.

      I had a brush with potential disaster that, looking back, was caused by a few dumb, albeit kind of big mistakes, lol.

      Lets start the discussion about how my story above can help Warriors making this very mistake now, or others who are thinking of running their businesses in a similar fashion avoid a similar fate.

      I want to thank those of you who've replied so far for your contributions. You all bring up valid points.
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      • Profile picture of the author XponentSYS
        Originally Posted by Deepak Media View Post

        If a customer buys stuff from you and is not satisfied, it is not your money to begin with. Right?
        Absolutely buddy. Couldn't agree more.

        Originally Posted by donadams71 View Post

        Great advice. You're absolutely right, banks do side on the customer's and not the merchant's in these type of situations. I think I will implement the 180 day refund policy as well when marketing my products online in the future. Thanks!
        Right?

        The fact of the matter is, anyone can charge back within 6 months. So, if that's the case, than it is what is.

        If "it is what it is" and there's nothing we can do about it, why not use it in an advantageous way?

        To me, it's a no brainer.
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  • Profile picture of the author donadams71
    Great advice. You're absolutely right, banks do side on the customer's and not the merchant's in these type of situations. I think I will implement the 180 day refund policy as well when marketing my products online in the future. Thanks!
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    • Profile picture of the author pro2sell
      so true. better a refund than a 6 X membership chargeback....and who said merchants are scammers?

      be nice, make noise
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  • Profile picture of the author Deepak Media
    If a customer buys stuff from you and is not satisfied, it is not your money to begin with. Right?
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    @ Bangalore, India.
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  • Profile picture of the author cshilling22
    I understand that they could charge back in 180 days, but if you offer a 30 - 60 - or 90 day money back guarantee don't you think that if they let that time pass, even though they still have the right to charge back, they would be less likely to take any action after the guarantee passes?

    I know that most people will request a refund quickly and only charge back after getting denied the refund, but don't you think a smaller refund period would protect you more in the long run just in case?
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    • Profile picture of the author Freedom Media
      Great Post - I had a situation with Paypal several years ago over a refund that I refused to give.
      In my case if was for a large physical product, high priced ($1500.) Personal Development course.
      Several DVD's, workbooks, etc...
      The customer was in Guernsey, I believe part of the UK or something similar to an offshore haven off of Great Britain.
      She had received the shipment and refused to return the package which was required for a refund.
      Paypal sided with her anyway and it really didn't matter what I had to say about it.
      In retrospect I should have just refunded her and moved on.
      Live and learn...pick your battles more wisely.
      I can see it from the customers view point in many cases as well, from being on the other side of this and being a customer that has gotten charge backs from vendors.
      If I send an email or support request with an issue and it does not get resolved then honestly I am not going to send several requests or plead my case to the vendor as they are not really concerned with my opinion anyway.
      I am having a situation right now with a local attorney that I can not get a hold of for anything but yet he manages to deduct a hefty $400 a month from my account.
      After over a month of attempting to get an update from him...he's looking at a charge back. If someone can not return your multiple phone calls, emails, etc...you really don't have a choice but to get your money back.
      Just my .02
      ~Natalie
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      • Profile picture of the author butters
        Sucks to hear that happend dude, glad you got through it ok, lesson learnt and now taught . Wish we had a charge back button for every stupid customer which came our way!
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