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The Power of a Refund Policy

The Power of a Refund Policy

One thing that’s inevitable in business is that a customer will, at some point, ask for a refund. Even though it can be frustrating and emotional, the best thing to remember is that a refund request doesn’t reflect on you or your business. It’s simply a reflection of that particular customer’s experience at that particular time. 

Sometimes, that refund can even be a blessing, especially when you’re in a service-based industry. (Giving someone their money back instead of dealing with a nightmare client situation is a #WinWin in our book.)

But you shouldn’t wait for a refund request to pop up to examine your refund policy. In fact, if you have a system already in place, you’ll be much better equipped to deal with it, whether it comes two months or two years down the line! 

Why is a refund policy necessary?

Here’s the thing — if you don’t have a refund policy clearly stated on your site, regardless of your industry and niche, you’re leaving cash on the table. 

There are so many people who won’t invest in a product or service if they’re not absolutely sure they can get their money back first. They may have had a bad experience with another company or service provider, may be tight on funds, or something else entirely. 

The point is that, if they’re deciding whether to invest with you or your competitor, that refund policy might very well be the make or break of their decision. 

Additionally, a clear policy can save you if you ever have a problem client or customer. We’ve all been there — the ones who use your product or service as much as possible, and then wait until the very last minute to ask for their money back. 

Though these types of customers are few and far between, if you have a clear policy on your site stating that they can’t get their money back after X days or X goal achieved, there’s much less room for argument. 

How to create a refund policy

If you’ve ever had to give a customer a refund in the past, make sure to use that as the foundation for your new policy. What did you or didn’t you like about the situation? What would you change to make it easier and more clear the next time around? 

If you haven’t had to refund a customer, you still have a great foundation in place! Part of your policy is going to depend on whether you’re a service-based business, or product based. 

Service-based business

If you’re in the service world, like a VA, OBM, marketer, coach, housecleaner, etc., your refund policy might feel a little harder to define. 

There are a few factors you’ll want to consider when deciding on your refund policy. Being a service provider means you’re often doing a lot of labor up front before your client can decide if they like working with you and are seeing results. But this doesn’t mean you should refund them if they’re unhappy! 

Take a look at how long things take you. If you’re creating a marketing strategy for someone, you’ll likely be putting in the hours before you even show it to them. Your refund policy should account for this — don’t give your customers a full refund when you’ve worked so hard! Instead, find a fair middle ground. 

Then, decide on the time frame allotted for them to request a refund. You want to protect yourself from clients who will use that marketing strategy, and only request a refund after they’ve leveraged your intellectual property and creation.

And lastly, take into account what factors might rely on your client for the project and relationship to be successful. Ultimately, if they don’t hold up their end of the bargain, it can be pretty tough for you to do your job! 

Product based businesses

Depending on the type of product-based business you run, your return policy might include a section for exchanges instead of just refunds. If your product is physical and you stock more than one item in your store, you may accept exchanges for other items of equal value. You might even require a restocking fee that takes part of their refunded amount. 

If your store is digital, having a clear return policy becomes even more important because buyers can access your information immediately upon purchase. What if they steal your intellectual property and then say they didn’t use it? What if they consume all the content and then ask for a refund even though they did the work? This is where a clear refund policy that’s fair to both sides comes in. Our founder, Christina Scalera, talks a lot about this on YouTube.

It’s important to note that there are no guarantees when it comes to returns. Physical items might be damaged, or digital downloads could have been transferred to another device. But the thing about having a strong return policy is that it tells the good customers  you care. 

Make sure your refund policy is in writing

The last (and most important) piece of a refund policy is making sure that you have a clearly written policy on your sales page or site. 

Refund policies don’t just protect you — they protect your customer too! 

A crappy refund policy (or no policy at all) just screams: “Ahhh! This isn’t a very good product. You probably don’t want it!” 

But a good refund policy says: “Yep. I believe in my product/service so much, and know that it does exactly what I’m promising, that I’ll give you your money BACK if you aren’t happy with it!” 

But if you’ve been reading this blog thinking, “Okay, I STILL don’t know if I can put my own policy together,” don’t worry. We’ve got your back. 

Refund Recon™ includes everything you need for a rock-solid refund policy that will  actually win you customers. 

With this all-in-one package, you get refund policy templates, a workshop on the power of refund policies. And the post-purchase refund repellent system to minimize refund requests! 

Check out Refund Recon™ here

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