It’s a question that online business owners are faced with every day, but when you’re looking for answers, are you looking in the right place? After all, the issue may not be with your products or services; it may be with your refund policy.
Is your refund policy killing sales? Most consumers who shop online check out a business’s refund policy before they decide to buy. This is true of any kind of business; whether your company sells products or services. Consumers want to know that if they’re not happy with the services or products that they receive, that they have a way to get their money back.
Let’s take a deeper look into this and discuss 3 ways your refund policy may be killing sales:
1. You have no refund policy
The easiest way that your refund policy can kill your sales is by simply not having one. If you don’t have a refund policy in place, consumers won’t know if they’re going to be able to get their money back or not and that’s a thought that doesn’t sit well with people. Sure, they could email and ask, but most people won’t ever take the time out and make that extra step. On top of that, even if a person does email your company and asks about what the refund policy is, unless it’s placed in public view (on your website), most people won’t feel confident about it. They won’t know for sure if the reply is coming from a person of authority of if it will be honored in the event that there’s a problem.
2. It’s complicated
Refund policies aren’t always the easiest to read or understand. If the policy is vague or it includes too much information, it’s going to make things look complicated and it will confuse consumers. A good refund policy covers both parties but is also simple enough for the average person to understand.
Another way that you can make your refund policy too complicated is if a customer has to go through a million steps to get a refund. For example, the other day I came across a refund policy which required the customer to complete 14 steps if they wanted a refund. It doesn’t have to be that complicated and time consuming, nor should it be.
3. Customers are on the losing end of the policy
Finally, your refund policy may be killing sales if the business is on the long end of the stick and the customer is on the short end of the stick. For example, high re-stocking fees or only giving a very small refund (in comparison to the original purchase amount) will normally send potential customers running. If you sell physical products, a re-stocking fee is normal but some companies charge so much for re-stocking fees that the consumer ends up losing a majority of the money that they spent.
Another way the customers can be on the losing end of the policy is if the refund policy restricts the customer to the point where they could never get a refund if they wanted one. For example, stating that returned merchandise has to be mailed back and received within 3 days of delivery almost guarantees that the customer is going to lose out since it normally takes shipped items more than 3 days to reach a destination unless the consumer pays extremely high shipping costs for quicker service.
In order for people to want to spend money, they first need to know that their money is safe in the event that something goes wrong with the transaction. A bad refund policy or not having a refund policy can stop people from purchasing products or services that they would have otherwise purchased.