How Do I Reduce Refunds?
Wednesday, February 10th, 2010
Archive for February 10th, 2010
How Do I Reduce Refunds?
Wednesday, February 10th, 2010
Hi. If you're like me — and, in this instance, I suspect you are — then you HATE having to issue refunds. Who wouldn't?
But it's a simple fact of online business life that, no matter how good your product is, a certain percentage of your customers will ask for a refund for one reason or another.
Now, while it's impossible to eliminate refunds altogether, there are a few things you can do to keep them to a minimum — and one thing in particular you can do that can really help slash your refund rate considerably.
The 'few things' include…
1) Providing a quality product — and, where possible, over-delivering to improve customer satisfaction.
2) Being there to answer your customer's questions in a timely and friendly manner.
3) Providing follow-up support, tips, encouragement and bonuses via autoresponder.
These are the basics. They are pretty self-explanatory – and I'm not going to go into them in detail here. Suffice it to say that, if you offer a good product (that delivers on its promise), and you offer good customer service, then your refund levels will remain low.
However, you will still get SOME refund requests no matter how hard you try. So, what can you do about those?
Well, rather than immediately issuing the refund as soon as you receive the request, you can offer your customer an alternative product instead.
The alternative product should be worth AT LEAST as much as the product being refunded — ideally more. It should also be relevant to the customer's needs. For example, if the initial sale was for a golf ebook, then offer a different golf ebook — or collection of ebooks — instead.
Your offer won't be accepted on some occasions but, in my experience, it WILL be accepted on many occasions.
Here's an email I sent recently to a customer who had ordered a $17 product and wanted a refund…
Hi [NAME],
I'm sorry to hear that this hasn't worked out for
you.
Now, I can go ahead and issue your refund as
requested or, if you prefer, I can give you an
alternative product at the same/higher value
instead.
I propose a copy of the Total Resale package
( http://www.TotalResale.com ) which is sold at
$47 as a good replacement.
You might have something else in mind and, if
so, just let me know.
Alternatively, of course, if you'd prefer I just
issue the refund, please let me know also and
I'll take care of it right away.
All the best,
[My Signature]
The customer accepted the offer.
She got a $47 product for just $17 so she was happy. I got to keep my $17 so I was happy.
And, as an additional bonus, my relationship with the customer was strengthened which will — hopefully — lead to more business into the future.
Now, if you don't have any other products to offer your customers as an alternative, then look around for products with Private Label Rights or Master Resale Rights that you can offer.
Okay, I think that covers it.
It's a simple concept, but it DOES work. Next time you receive the dreaded refund request, try it out and see for yourself.
All the best,
Michael
