PDA

View Full Version : Your say on REFUND



mrugank
03-08-2009, 04:22 PM
Hello Again,

I have this question for all you guys who have a product there online. Its about the 60 days or more MONEY BACK GURANTEE that we give. A powerful marketing tactic, I agree, makes the potential costumer feel safe, right?

Now the information that we are serve or offer to masses in form of a product is actually what works for us, right??? And we also know that more than 60% of the people who purchase our product dont actually take ACTION or Leave the work half way through..

So whats the point in giving entrie unconditional money back gurantee when we know that the next time we launch a product or promote a JV prodcut, it is goin to come back as a refund from the serial refund seekers.

Cant we just say that after XYZ no of days, AFTER applying what we discussed in the module, IF u dont make any money than we refund your money back. Kindly send to us, the url or link of your website, blog or whatever you have done.....

Any suggestions ???

Jeremy Reeves
03-08-2009, 11:01 PM
Guarantees make people feel more comfortable with buying.

The longer the guarantee, the more sales you're going to make. It's a basic direct response rule.

There aren't as many serial refunders as ya think. That's simply a part of business and a part of life. I don't care if you're giving away a $30,000 product for $10. There will always be a certain amount of people who refund it - however, it's probably not as high as you think.

Grahamh
03-09-2009, 09:43 AM
Make your guarantee a no brainer for your buyers.

If you start putting 'terms' in there then you will create doubt and their finger may move away from the buy button.

Using Clickbank? Then you have no choice because the mandatory guarantee is 60 days.

You also have to give a guarantee when using PayPal.

In my 'offline' business I give a product lifetime guarantee and I've never had any ask for their money back.

Another very good business is called Landsend (direct clothing supplier). Their guarantee is also lifetime. You can send goods back, no matter what the reason and they will be exchanged or refunded.

Once, my wife borrowed a jacket from me to do some painting outside. Yep, she got paint on it, bur hadn't told me that she'd borrowed it.

After a quick call to Landsend, the replaced the jacket free of charge.

I've been buying from that company now for about 10 years.

Consider the lifetime value of a customer with a top notch guarantee.

Serial refunders are very much in the minority and there are ways of blocking their IP address so that they cannot buy from you again.

Graham

essai
03-10-2009, 01:40 AM
There are very less peoples who ask for refund.
But we have no choice other than giving them a
money back guarantee.

This increases the sales and Increases our credibility.

Now I am building a Membership site and I am going
to try a "No refund" Method. If it works then I post
about it Here.

Mike Carr
03-16-2009, 02:58 AM
I personally think that most people buy and intend to try the product and regardless of the outcome seek a refund..The one's who don't ask for a refund within the 60 days generally have just forgotten to do so after 2 months and probably realize sometime down the track that they missed the cut off date. The beauty of a 60 days refund period is that a lot of people will simply forget after a month or so. Of course there is the honest exceptions out there who purchase, love their product and are happy to part with their cash for good!

Garland Coulson
03-16-2009, 03:51 PM
Refunds are just a fact of life when you do business. Guarantees generally increase sales significantly and only a small percentage of people will request a refund.

For example. Lets assume you sell a product at $47 and usually sell 100 per month. Let's assume adding a guarantee will double your sales, but 10% of people refund (a very high rate - much higher than most real life cases).

Your income without a guarantee = 100 @ $47 = $4,700

Your income with a guarantee = 200 @ $47 = $9,400 minus refunds of 20 @ $47 = -$940
$9,400 - $940 = $8,460.

So you made an extra $3,760 in income even though you had a 10% refund rate.

Barry Weiss
03-19-2009, 08:56 AM
I agree that refunds are a fact of business life and the guarantee is a key component that improves conversions. It is called risk reversal where the customer has a comfort that you have confidence in your claims and product quality.

In any direct response campaign this is necessary, especially if you are not a known brand. Sure you can overcome this somewhat with a JV and co-branding, but nothing makes a prospect feel better about a purchase than a solid money back guarantee for any reason.

I also agree that the vast majority of customers are honest. The fact that many don't use the product and I've heard numbers as high as 90% for some business opportunities, is just a fact of our business model.

My personal opinion is that by adding conditions to the gurantee hurts your credibility and the value of your offer. Also you will avoid complaints by offering a clear and easy to execute money back policy.

mrugank
03-19-2009, 05:30 PM
Thank You Friends and fellow Internet marketers. Learnt a good lesson here.

charleskirkland
03-28-2009, 01:48 AM
Refunds make people feel safe.

Plus you have to think about all the people who take a chance on you by buying your product. These people have taken action and at the very least you get a new buyer on your list even if they get a refund.

Plus not all products are not right for everybody.

Thanks
Charles

Anthony Buchalka
04-01-2009, 09:32 AM
Howdy all,

Thankfully most customers are actually very honest and the few dollars that you would save by NOT having a refund guarantee, would be quickly lost by the sales you would lose by not having a guarantee.

I have tested guarantees in many niches and always found a significantly better sales conversion rate with a refund guarantee of at least 60 days.

You can help keep your refund rate low (and thus improve your "stick" rate) by such things as;

Over deliver and exceed your customer's expectations.

for eg. Offer a surprise additional bonus soon after purchase.

Make sure your product does what your sales page says it will.

Promptly manage customer support issues.

Stagger your content (depending on your product of course).


Having a clear and prominent refund guarantee removes that lingering question is many people's mind "what if I don't like the product".

We want to remove as many buyers objections as possible.

Anthony :)

charleskirkland
04-01-2009, 09:39 AM
Hi Anthony

You are spot on about giving them more then they bought. I have one product were they keep getting bonus from me weeks after they buy. Even have the 60days I still send them things.

This really makes people bond with me and helps create more sales for me after the fact.

Charles

Lee Lickorish
04-01-2009, 01:52 PM
I also agree that offering a no quibble money back guarantee benefits both customer and seller, I also believe in seriously over delivering value and service. But there is one tactic that you could use which is this.

Let's say you offering a 60 day money back guarantee, you could have your autoresponder setup that on the day 55 your customer will receive an unexpected and extremely valuable bonus within seven days, you could even start a bit before that building the unexpected bonus up and a few days before the guarantee is up, announce that they will receive it free of charge for being a valued customer.

Using this tactic should lessen your refunds, but you will always get a few who want a refund regardless of what you offer them.

Just a thought,
Lee

Mark Sullivan
04-01-2009, 07:20 PM
Hi,

It wouldn't hurt a bit to split test your page on this.

Yes, I agree that risk reversal is important ... it's what all the 'gurus' teach. However, this has become envogue more and more over the years.

Everybody is feeling the pressure to give the guarantees because 'the other guy is doing it'.

Don't get me wrong, I think providing a guarantee is very smart. However, just test it. That'll be your final answer.

If you're offer and product and sales page (with video) is that good, people will overlook the guarantee, a lot. Especially if it's priced right.

I've been in the lead business and providing lead generation services for over 7yrs now with NO guarantee. It just doesn't work for my business, but it certainly hasn't hurt mine. Though it is very different that info product business or software selling.

Hope this offers another viewpoint worthy of consideration,

Mark


P.S. CharlesKirkland has some good info and I would default to his expertise.

Barry Weiss
04-02-2009, 01:48 PM
Here is an additional point regarding refunds.

If you have a merchant account and make refunding difficult you will end up with high chargebacks and lose your ability to process credit cards.

Customers that either don't recognize the text phrase on their statement or have trouble finding the customer service number or email address for requesting refunds will simply call their bank. The bank will charge you back and, although, you have the ability to fight it, even if you win and the bank reverses the chargeback that chargeback (complaint) statistic remains on your record.

If you sell a good product or service that delivers the claims that you make the vast majority of customers will never request a refund or charge you back. If, however, you don't deliver, then maybe you shouldn't be selling that product/service.

Anthony Buchalka
04-03-2009, 09:30 PM
Here is an additional point regarding refunds.

If you have a merchant account and make refunding difficult you will end up with high chargebacks and lose your ability to process credit cards.

Customers that either don't recognize the text phrase on their statement or have trouble finding the customer service number or email address for requesting refunds will simply call their bank. The bank will charge you back and, although, you have the ability to fight it, even if you win and the bank reverses the chargeback that chargeback (complaint) statistic remains on your record.

If you sell a good product or service that delivers the claims that you make the vast majority of customers will never request a refund or charge you back. If, however, you don't deliver, then maybe you shouldn't be selling that product/service.

I agree with what you said Barry! :)

If someone wants a refund for any reason, there's no point trying to talk them out of it or making the refund process difficult for them (even if their reason for refunding is “questionable”)

It’s a waste of your time and energy.

Best to just give the refund and move on.

Something worth thinking about as well is the fact that some people who refund a product from you may well buy something else from you later (unless of course they found your product was poor quality).

There are many reasons why customers refund from “I didn't get around to using the product” right through to the irrational refunders such as one I had a couple of months back who claimed one of my ebooks caused her brand new laser printer to jam and wanted me to replace her cartridge! :)

My refund motto is to always offer a quick and courteous refund and depending on the nature of the refund, I may remove them from my list or I may keep them on my list.

I found from testing that some refunders will buy a different product from you down the track if you treat them well and maintain a good relationship with them.

Lastly, it’s always wise to keep a bit of a log of the reasons why people are refunding a product. You may discover something that can be changed with a result of a decreased refund rate. (for eg. a poor quality audio could be redone or grammatical errors in an ebook can be edited).

Cheers.

Anthony

Barry Weiss
04-06-2009, 03:37 PM
Good point about logging the reasons Anthony.

Call centers use a disposition report that identifies the list of reasons for a refund or customer service call. By analying the reasons it is often possible to identify problems that can either be corrected with the product or simply by changing copy to better manage customer expectations.

If you can log the reason code to the customer record and analyse customer's multiple purchase history, you can find out which ones are chronic refunders and stop wasting your marketing dollars on them.

Thanks for the good info.

Barry

AbhishekAgarwal
04-17-2009, 01:09 PM
Hi Mrugank

As everyone has said, having a Refund policy actually works in your favor. It instills enough belief in the minds of your buyers, and you definitely increase your chances of conversions.

I wold like to give you a tip here.

Right next to your refund policy, provide your email / help desk url. After stating your refund policy, tell them something like "If you are not satisfied with our product, just get in touch with us HERE.

Providing your contact details right front of their face would make them trust you more, and would also send them a message that you believe in what you are selling.

- Abhi

Barry Weiss
04-17-2009, 02:18 PM
Most of us are not "Brands" and our potential customers do not know us. Therefore, an iron clad guarantee helps take the risk out of the buying decision.

Also as Abhishek mentioned, providing an easy and clear method of contact also helps, as long as you respond to questions and refund requests quickly. By using an autoresponder to confirm reciept of the request with a time that you will respond (managing expectation) is very important. In some cases you might even be able to win back the customer.

Mike MerzJr
04-29-2009, 04:18 PM
I'd have to go with the general consensus on this one. Refund policies seem to be a pretty standard way to boost sales. As mentioned before, the best way to handle it is to go in with it understanding that it is a necessary evil and plan for refunds. Some of the folks i have worked in the past few months with expect refund rates of up to 30%!

Another interesting bit about offering a refund is as a metric for affiliate performance. Consider two affiliates. Affiliate A brought in 50 sales and Affiliate B only brought in 25. At first Affiliate A looks like the guy we should be giving a little more attention to. But after 60 days, Affiliate A had 30 refunds while Affiliate B only had 5 refunds. Both affiliates resulted in 20 sales, but with a 60% refund rate you might want to consider the type of offers you are allowing Affiliate A on. At the same time, i'm going to take Affiliate B out for a beer and see if we could cook up a JV, because my products obviously work for his list.

Barry Weiss
05-04-2009, 04:19 PM
Mike you bring up a great point and that is monitoring all aspects of the business. Impressions, opens, clicks, conversions, sales, refunds, complaints, life cycle, etc.

This will permit a business owner to really find out which channels deliver quality sales and highest life time value (LTV) and it is all about LTV.

Thanks.

c4rves
05-06-2009, 03:47 PM
Refunds are just the way of life. Yes will get more sales if you offer a refund period.
Even if they get a refund the buyers are still on your list, you can offer them a different product later down the line that might suit them better.

olaoluwa
05-06-2009, 07:26 PM
First, you need to be aware that most customers seek value for their money. Only a minority are cheats. Second, it can happen to any of us - you bought something only to discover that it is not right for you, then you turn it back for a refund. Yes, digital products should not be like that, but the FACT remains that credibility is second to none for long term value as well. Credibility breeds loyalty. In essence, your quick no quibble refund could also be a well spent dollar. I call it reverse advertising. Genuine refunds will advertise for you sooner or later. It's a future advert you have placed.

Robert Martinez
05-07-2009, 11:59 AM
I agree that only a very few are serial refunders (its actually funny because I spoke to one of my dorm mates about this Tuesday).

If we assume that all buyers (and I throw all of us in there too) are honest when they buy online products make a decent decision as to what they buy. Few people go willy nilly and buy what ever they want at will. So chances are they will read our pages, mull it over, maybe research then act. If they dont like it they dont like it thats just nature, others forget and thats better for us, but most people who have a product that works for them support it.