Face Your Fear: How to handle refund requests
Fear lurks at every turn for us entrepreneurs.
We’re skittish about creating our offer. Queasy when we publish the sales page. More than a little nauseated when we have consults.
But once that sale is made, and the course, coaching or ebook is on its way to the customer – all that fear goes away, right?
Enter: The Refund Request.
The type of refund policy you have in place for your business is entirely up to you, and regardless of how strict or easy-going that policy is, I encourage you to have one in writing on your site and in your contracts so that you can rely on it when *gulp* that refund request lands in your inbox.
But let’s back track, and tackle the essentials: When should you offer refunds, and what form can these policies take?
When to offer a refund
When deciding whether or not to offer refunds, there are a few key questions to ask:
Do you have control over the outcome? (If you’re a weight loss coach, you can provide the best guidance and nutritional advice possible…but you can’t actually wrestle the donuts out of your clients’ hands.)
Are there clear quality standards? (Ebooks better not be full of typos, sweaters better not have holes, candles better actually burn, and food can’t be spoilt.)
Can the product or service be returned? (Those candles can come back to you, but a digital ebook, used coaching sessions or a delivered final design can’t be undone.)
Depending on those answers, and your unique approach to running your business, offering refunds to clients may be appropriate.
Refund Policy Variations
Now that you’ve figured out whether or not you’ll be offering refunds, it’s time to create your policy.
How much of a refund will you offer?
This can be anything from 0 - 100% of the purchase price of your product or service. Either end of that spectrum is rather straight forward. In the middle, your decision on offering a refund may be based on how much of the fee was paid in advance, and how much of the work you’ve completed.
For example, if a client has pre-paid for a coaching package, but wants to cancel part way through, you may want to offer a refund for the balance of unused sessions.
Or, if a client for your design services has been paying in instalments, but would like to end the project before completion, you may choose to refund the amount paid for elements of the project you haven’t yet completed.
Are there any special refund conditions?
Especially in circumstances where your control over client/customer results isn’t very high (think, self-guided ecourses, strategy consultations, coaching) it can really sting to receive a refund request. It’s also entirely appropriate to add in some special conditions for a client to meet before you issue the payment back to them.
Common conditions include requiring clients to show their completed worksheets, or verifying their attendance at any group calls (i.e. If they haven’t been putting in the work, then there’s no refund). Another condition can be the completion of a rather extensive feedback survey on why the service wasn’t working for them.
Is there a time limit on the refund?
Just as your favourite retailers will have a 30-day limit on refunding your purchases, it’s a smart move to place a limit on your own policies. Having an open-ended timeframe is actually a business liability, because if you’ve already spent or re-invested those earnings, and a slew of surprise refund requests pops up, that spells big cash flow issues.
It’s not just about the calendar-based limits though. An action-based limit (i.e. Before delivery of the 3rd course module) can work wonders in aligning your refund policy with the style and method of delivery for your service.
The Refund Request
The elephant in the room right now is asking for some attention. How should you actually handle receiving that dreaded refund request?
Try not to take it personally. I know, it’s easier said than done. But it really is true – someone asking for a refund doesn’t necessarily mean that your product or service is actually bad. And it definitely doesn’t mean that you, dear Ambitious Entrepreneur, are a hack or a bad egg.
Attempt to make it right. A refund may not be required at all if the client complaint or issue is one that you can remedy. For example, someone asking for a refund on a digital workbook where the pdf isn’t fillable can be fixed by making it fillable and providing them with a new copy. True, this will require extra time and effort on your part, but that client now knows that you’re responsive to their needs and a true pro – and that’s a great outcome.
Step on it. Nothing is worse that having a request drag on. I once spent 7 months (yup. Months.) chasing down a refund from a notable culinary school. I had registered and paid, they cancelled the class, and I was the one with the long distance charges and worn down patience trying to get that fee back. Nightmare. Don’t do that to your clients – suck it up, and get that refund to them ASAP.
Do it differently. Though refund requests – frankly - suck, there are lessons to be learned from the reasons and feedback given by customers and clients. Listen carefully, take notes, and if you’re seeing trends in something not working quite right in your product/service, or sales copy text that’s leading people astray – adapt.
With a clear refund policy in place, and having adopted these suggestions for how to handle the requests when they arrive, there’s no need to shake in your boots at the thought of a client asking for a refund. You’ve got this.