“You may be deceived if you trust too much, but you will live in torment if you do not trust enough.” – Frank Crane
Many marketers, both large and small (and I include myself among the latter) go bonkers when customers return products for a refund.
As BK, an executive with one of the biggest and most famous direct-marketing publishing companies, told me, “Our books contain great information, incredibly valuable. Why should we allow someone to read the book, benefit from all that great content, and then cheat us by sending it back for a refund?”
If you feel the same way, let me share with you a few important facts about refunds:
1. First of all, a refund request doesn’t mean your product is bad or the customer doesn’t like it.
Example: A customer returns your $300 DVD set on investing in foreign currencies. “It actually seems like a great program,” the customer says in his refund request. “But after watching it, I’ve decided this isn’t a business I want to get into. It’s just too much work!”
To me, this is a perfectly legitimate – and reasonable – position for a customer to take… don’t you agree? In this case, offering a refund is not only a legal requirement but also eminently fair: Why would you want your customer to be out of pocket $300 for something he can’t use?
2. Offering a refund doesn’t cost you money. It makes you money.
Novice marketers fret about offering a money-back guarantee. “If I do that,” they worry, “won’t some customers take advantage of me by profiting from the information in my material… and then returning it?”
Yes, some will. But here’s the thing: Offering a money-back guarantee reduces buyer reluctance and increases buyer confidence… resulting in more orders. In almost every instance, the greater revenues and profits from the increase you get in sales by offering a guarantee is MUCH greater than the small amount of money you lose issuing refunds.
After all, would you buy a product for $30 or $100 or more – sight unseen – without a money-back guarantee? Of course not.
3. Longer guarantees are better than shorter guarantees.
If you are currently offering a 10- or 15-day money-back guarantee, extend it to 30 days. Already offering a 30-day money-back guarantee? Then test a 60- or 90-day money-back guarantee.
The longer guarantee term invariably increases response rates and sales, because it eliminates the concern many buyers have with a short guarantee – specifically, that they will forget to open and try the product… and that by the time they get around to it, the guarantee will have expired and they’ll be stuck with it.
Not only that, the longer guarantee actually reduces refund requests.
Reason: The buyer is in no hurry to evaluate and return the product.
Result: The buyer soon forgets about the guarantee… and whether he actually uses the product or not, he just keeps it.
4. Generous guarantees sell more product than miserly guarantees.
Ever see a guarantee that says you’ll get your money back if the product is returned “in saleable condition”? With a guarantee like that, the prospect worries that if he does return it, you’ll claim it arrived scratched or broken.
Similarly, some sellers of information products offer a money-back guarantee… but only if you offer documented proof that you followed their system and it did not work for you. But what if I get your system, but something comes up and I decide I don’t have time to work through it. Am I stuck with it because I didn’t use it?
The more unconditional your money-back guarantee is, the higher your response rates will be. Conditional guarantees depress orders.
Here’s something interesting to consider…
A year or so ago, I began selling e-books online.
With a hard-copy book, my guarantee is: If you don’t like it, return the book and we will refund your money.
But you can’t really return an e-book. I thought about eliminating the guarantee, but realized that is absurd. Instead, I stress the fact that buyers can get a refund without returning the product.
My standard e-book guarantee reads: “If you are not 100% satisfied for any reason – or for no reason at all – just let me know within 90 days. I’ll refund your $29 payment in full. No questions asked. And you can keep the e-book FREE, with my compliments. That way, you risk nothing.”
Result: My refund rate on e-books is lower than for any other information product I sell, including CDs and hard-copy books. In fact, I get virtually no refund requests on e-books, though you could say my guarantee openly invites people to take advantage of me.
My conclusion? Yes, there are a few con artists out there. But most people – especially when you are open and fair with them – are honest and will be fair with you in return.
So follow my advice on refunds. Then watch your sales volume – and profits – soar.
I guarantee it – or your money back!