Truth About Refunds And How To Minimize It

Here’s something no e-book, course or seminar can prepare you emotionally enough for: refunds.

When I made my first 3 sales online ever, 1 of the customers asked for a refund. At this point you could say I had a 33.3% refund rate.

I was quickly demoralized. I wondered if the product I was reselling wasn’t good enough.

When I did my first product launch ever, there were a few emails coming in asking for their money back, some from angry customers.

Again, I wondered if my work wasn’t good enough – or I was unfortunate to get some bad apples.

If you’ve experienced your first refund request, I’d say… congratulations!

After getting your first sale, this is the next ‘virgin breaking’ experience for online marketers and you know what?

So yes, refunds do happen. It’s not a pleasant experience, but don’t lose sleep over it. Refund requests, Paypal disputes, and the occasional chargebacks are part and parcel of business.

No matter how good your product is, there is just no way to please EVERYONE.

You WILL get refund requests every now and then, and it’s usually for a few reasons:

1. Your product isn’t good enough or doesn’t meet expectations. Hey this happens, even if you take full pride in your work. Sometimes it’s bugged, broken or it doesn’t help your customers with what they want to solve or achieve.

2. You get unreasonable people. Yes this happens too. While you should be careful not to assume every customer seeking a refund falls into this category, from my experience there is still widespread thinking that people can seek refunds for digital products and services anyhow they want (and blanket assumption that everything is covered by a ‘no questions asked’ money back guarantee)

3. There are also scammers. Who says scams happen from only one side i.e. the vendor?


Note I say “minimize”. Of course it would be great to totally eliminate refunds but that probably works only in a perfect world.

1. Bonuses and unannounced Bonuses. But Customers always love getting more value for their money. Every time my Customers buy my products, the first 3 to 4 emails they get include unannounced Bonuses and how to use the Product or course.

2. Have a Helpdesk. Email isn’t reliable so you get Customers that try to email you but for some reason it doesn’t reach you (happens to me all the time) that’s why I have the helpdesk link peppered on my sales pages and download pages. Make yourself easily accessible.

3. Rephrase your refund policy. One of the worst things you can do for your business right now is having a “no questions asked” guarantee. That invites trouble. Don’t be surprised you’d attract shameless scums who think “the customer is always right” and take advantage of your refund policy just because they can. In my refund policy, I require reason from my Customers – and even then, not all are valid.

Here is a line I added in my Legal page:

“Seeking refund on account of personal, financial problems, ‘no use of product’ and ‘no reason declared’ are not valid reasons.”

4. No Refunds On Service. If your time is involved in the offer e.g. coaching, done for you, freelancing, etc. there should be strictly ZERO refunds on this.

5. Sell more. This is still the best remedy for bad refund request experiences. On average my products score below 5% refund rate. Surely you’d want to focus your energy on the 95% paying customers and not the less than 5% bad experiences 🙂

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What else do you do to minimize refunds and negative customer experience? Share in the comments below!

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