The Fundamentals Of Making The Sale – Is Your Refund Policy A Deal Maker Or A Deal Breaker?

When most people think about what it takes to make a sale, they think about what they are going to say to their prospective buyer to convince them to make a purchase.  They think about what they will say about their product – how wonderful it is and how it can help the prospective buyer.  They might also think about how they will close the deal and how much money they will make.  But, rarely does anyone consider whether or how they will give a refund – should it be necessary – as part of making the sale.

Why You Need A Refund Policy

Every company should have a refund policy.  You might have a no refund policy, or you might allow a store credit as refund, or you might give a full refund in certain circumstances or all the time.  But, you should have a refund policy and your prospective buyers should know about it before they make a purchase from you.

One thing that is always in the back of the customer’s mind is what will happen if they are not happy with their purchase.  Your customers need to feel safe doing business with you, and in order for them to feel safe you need to reassure them that their satisfaction is your goal.  This is why having a no refund policy is usually a bad idea.  It makes the customer feel like they are taking a risk.  When you remove that risk the customer is more likely to buy.

Refunds For Digital Products

There are many online and offline companies selling digital products today, and the majority of them have a no refund policy.  The common fear seems to be that the customer received the product and there is no way that product can be returned or resold the way a physical product can be, and therefore a no return policy is created for that product.  Sellers fear being taken advantage of.

Some companies will offer a store credit if their buyer is not happy and this is a move in the right direction.  But, in some instances you might want to offer a full refund.  You might give a full refund on a case by case basis – as in when a customer writes to you explaining their problem, an error was made and you feel they are truly sincere.  This is especially important if this customer has purchased from you before.  You’ve worked hard to create a feeling of trust with this customer and you don’t want to lose their future business over what is probably a low cost digital product.

Refunds For Physical Products

Just as giving a refund or store credit is important when you offer digital products, it is equally important for physical products.  Most companies require the customer to return a physical product in order to receive a refund.  A customer who returns a product to you has had to package it up and schlep it to the post office, where they had to wait in what probably seemed like a long line, and perhaps even pay for return shipping – unless you provided a return label with shipping included or you reimburse for return shipping.

When a customer is willing to go through that much trouble to return a product, you can be sure they are unhappy with that purchase and they are sincere.  They are not out to take advantage of you in any way.  Rather, it is they who have put their money on the line, and it is they who must now be inconvenienced by having to return that product.  These customers deserve a full refund, period.  Anything less means you risk losing their future business.

Be Up Front About Your Policy

Whatever refund policy or policies you decide to adopt, you need to make sure that these policies are provided in writing to your customers – whether online or off.  These policies need to be crystal clear and up front, NOT hidden.  First time customers are always suspicious, especially if you are online, and it’s important to gain their trust right from the start to ensure future sales.  And, customers who have purchased from you in the past will continue to trust you when you handle their refunds promptly.

Your refund policy can be a deal maker or a deal breaker.  Craft it with care.

To your riches!

Kim Hillman

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