How to Deal with Customers That Cancel and Want a Full Refund

PixelPaul on 10/08/2020 - 14:30
Last edited 10/08/2020 - 14:45 by 1 other user

Howdy.

So I help run a few online business. And every now and then we get someone who orders a digital product/service. Does not know what it is, how it works, or how to use it, and wants a refund.

We could of told them that the product was not right for them if they asked before purchasing, or directed them to the correct one.
But they seem to not read the descriptions and buy it. Or they don't read their emails after purchase and think it is all automatic.
It is crazy that someone could spend sometimes $200+ without talking to us first or making sure it is what they need and want.
It is not often this happens, but when it does it is very annoying.
The thing is, when we do a full refund, this still costs us. Due to payment processing fees, suppliers fees and more. So it would of been better if they never ordered at all. As we are worst off with them coming to us.

So I am wondering what others think should be done.
Should I raise prices to cover these losses? other customers are now dealing with this via higher prices.
Should I refund them minus what we have paid which is about 20%?
Should I credit their account the full amount only, to be used on future orders?
Should I refund them in full and suck it up.

Poll Options

  • 1
    Should i raise prices to cover these losses?
  • 113
    Should i refund them minus what we have paid which is about 20%?
  • 6
    Should i credit their account the full amount only, to be used on future orders?
  • 18
    Should i refund them in full and suck it up.
Education & Work

Comments

  • Hybroid on 10/08/2020 - 14:31
    +8

    What's the current refund policy that users are agreeing to when they purchase?

  • kahn on 10/08/2020 - 14:32
    +14

    Should i use the upper-case I?

    • ThithLord on 10/08/2020 - 15:53
      +6

      He really should of, shouldn't he?

      • Ramrunner on 11/08/2020 - 10:31
        +3

        My eye still twitches every time I see that.

        • ThithLord on 11/08/2020 - 10:53
          +2

          I'm with ye there

    • SlartiBartFozz on 11/08/2020 - 16:39
      +1

      Methinks the clarity of his product descriptions may likely match the care in writing this post.

  • Mechz on 10/08/2020 - 14:34
    +3

    Credit their account or 25% cancellation fee, whichever they prefer. Don't ever make a loss on their mistake.

  • garetz on 10/08/2020 - 14:36
    +7

    I hope you have a refund policy in place, if not make one asap, then follow it.

    • PixelPaul on 10/08/2020 - 14:38
      +1

      Our terms and conditions have it along these lines….

      "All approved refunds will be the amount approved minus any fees or costs imposed by us."

      • dasher86 on 10/08/2020 - 14:47
        +4

        I suggest calculating the weighted average fees and costs imposed to you.
        Include that in your t&cs and be fully transparent about.

  • Hithere on 10/08/2020 - 14:36
    +1

    I would not refund for buyer's remorse or customer errors unless I charged a restocking or a refund fee for wasted time of at least 25%.

    • afoveht on 10/08/2020 - 14:49

      Easy way out, and arguably fair.

      But a good refund policy may keep people coming back and / or build up lots of good will. Example: I regularly use abuse Bunnings' refund policy, but on the whole they have me sold and make a pretty penny out of me.

      • Ocker on 10/08/2020 - 15:22

        Do you really want to encourage this type of buyer to return?

        • Summoner on 10/08/2020 - 15:48
          +1

          Probably not. But, if the rules are not fair. it could send out wrong messages to potential customers and scare the good ones off.

      • tallkid123 on 10/08/2020 - 15:49
        +1

        The OP sells digital products/services.

        You're talking about brick and mortar retail. Big difference.

      • Hithere on 10/08/2020 - 15:51

        @thevofa You could waive or reduce any penalty if they were good customers or had a genuine reason to request a refund and only apply penalties to buyers who had a bad history or were obvious time wasters.

        You don't need them as customers anyway.

        • afoveht on 10/08/2020 - 16:18
          +1

          Yeah fair enough. I don't think there's any touchstone position here , apart from making sure it works out for you at the end. Some businesses go the extra mile, lose on a portion of their sales in order to deliver a bigger picture (Bunnings, Amazon), some are interested only in immediate gains. Neither is right or wrong, each will be a part of their respective strategies - at the end of the day the customers will decide what they prefer. I just relayed why Bunnings have me as a repeat customer, and why their profits in serving me surely greatly outweigh the costs of accepting my returns.

  • wheretobuychocettes on 10/08/2020 - 14:37
    +4

    Make your terms & conditions have stipulations about "change of mind" returns incurring some sort of restocking or processing fee, also noting that change of minds returns are granted on a case by case basis, not a guarantee. Nobody will read the T&C of course, but at least it will be there, and they agreed to it by ordering, so they have no leg to stand on.

  • skid on 10/08/2020 - 14:38
    +1

    Raising prices works to a degree. Lowers the number of purchasers and proportionately the number of refunds. Some people will purchase regardless knowing that they can get a refund.

    The other thing you can do is make the description clear and simple.

    Also make it all automatic if possible.

    • JIMB0 on 10/08/2020 - 18:46
      +1

      If the customer will pay a higher price shouldn't they already be charging it? Missing out on profit there.

      • skid on 10/08/2020 - 21:19

        The higher the price, the lower the sales volume.

  • inherentchoice on 10/08/2020 - 14:43

    I think Catch and Kogan pretty much don't allow refunds, unless item is faulty. Maybe just copy them?

    • Tandako on 11/08/2020 - 11:00
      +1

      Even then, I had to prove to catch beyond a shadow of a doubt the item shipped to me was incorrect. After several back and forth emails, including pictures and explanations, I finally received a refund.

      With Kogan, I received another new product and didn't have to return the other item initially. The next day after I had already disposed of the faulty product they changed their mind and said they wanted it sent back. They were good about it though.

  • godofpizza on 10/08/2020 - 15:25

    what would be digital service your selling? maybe get the customer to leave their details with you before selling said product?

  • Seraphin7 on 10/08/2020 - 15:29
    +3

    It all depends on the product/service you are offering.

    If what you are offering is 100% idiot-proof (noting this is practically impossible given the increasing ability of idiots to be idiots) in terms of its description, what its purpose is or isn't, specification, etc. prior to purchase, my view is that any costs you've incurred are fair game to deduct.

    On the other hand, if the product/service is not clear cut (or can't be clear cut), then I'll avoid outfits that don't have effectively a no questions return and refund policy. Earlier today I was discussing this is the context of clothing. It's impossible to know exactly what the item is like until you get it … therefore, I'll only buy from places that have a generous return and refund policy. Alternatively, if it's (for example) a specific piece of componentry that can't be mistaken for anything else, then I'm happy to buy even if there is a very limited policy available.

  • Agarwal on 10/08/2020 - 15:39
    +4

    Could have. Would have.

    • ThithLord on 10/08/2020 - 15:54
      +1

      Really makes me recoil.

  • subywagon on 10/08/2020 - 15:47
    +3

    Can you do a pop up confirmation msg stating to check if the product is right for them as there is no "change of mind" refunds maybe?

  • netjock on 10/08/2020 - 15:53

    The thing is, when we do a full refund, this still costs us. Due to payment processing fees, suppliers fees and more. So it would of been better if they never ordered at all. As we are worst off with them coming to us.

    When I refund a customer the payment processing fees are reversed also.

    You could also ask your suppliers to wear some because theory is only if you can get the product to consumer and accepted. How could they sell with 100% no refunds?

  • DashCam AKA Rolts on 10/08/2020 - 16:54
    +1

    We could of told them that the product was not right…

    We could have told them that the product was not right…

    So it would of been better if they never ordered at all.

    So it would have been better if they never ordered at all.

  • [Deactivated] on 10/08/2020 - 18:00
    +1

    🤣🤣🤣

  • popsiee on 10/08/2020 - 18:07

    Should i raise prices to cover these losses?
    Should i refund them in full and suck it up.

    Both are linked and work out your % is the normal practice to maintain your profitability .

  • Davo1111 on 10/08/2020 - 19:44
    +3

    "No refunds for change of mind - link to ACCC website"

    Just above the "pay now" button

    • skid on 10/08/2020 - 21:16

      yeh, I was gonna say. The two most common tactics on this forum are ACCC and CC chargebacks.

      • Davo1111 on 10/08/2020 - 22:17

        its more just to avoid the ACCC getting shitty if you write "no refunds"

    • apsilon on 11/08/2020 - 08:45
      +1

      Exactly this. You don't need to do anything. If you're generous provide them store credit but really with most digital products/services how exactly do you know they're not still using it? You also shouldn't be charging a restocking fee because what exactly are you restocking? A fee to cover your costs perhaps but look into how this works with ACL.

  • YeemaiI on 11/08/2020 - 08:45

    Do whatever you think is fair. If you were in the same situation as a customer, what would you be happy with?

  • jonkvh on 11/08/2020 - 09:24
    +1

    I'd be leery of restocking fees etc; you really must legally prove your costs of receiving the product back for resale are 'justified', that was my lawyers advice, if you get into a argument with a customer. All sorts of (profanity) threaten to take you to Consumer Affairs or even Small Claims Court, real petty bastards get off on proving themselves, don't give 'em a chance. It's the retired old former business owners who thrive off supplying heaps of grief.

    On the flipside, the restocking fee works only if you're a distributor/wholesaler, you've actually signed a contract.

  • [Deactivated] on 11/08/2020 - 09:27
    +2

    We're talking about digital products here that can be copied and there's no way of actually returning the product.
    That customer could be abusing your goodwill by complaining for a refund when they actually don't want to pay for it.
    Every digital product I've ever bought has a no returns policy unless the product cannot be pirated/copied like Audible books or Netflix movies, which are tied to a specific system.
    Usually I'd say refund them, but in the case of digital products the policy is no refunds.

  • OzHunterNSW on 11/08/2020 - 09:41
    -4

    Stop trying to SCAM people.

    They are customers, and could very well be "repeat" customers, if you treat them with respect and understanding.

    Stop trying to SCAM people.

    • Davo1111 on 11/08/2020 - 10:37
      +2

      It is NOT a SCAM

  • MrBear on 11/08/2020 - 10:52
    +2

    Perhaps you need to review your website and see if it is confusing or misleading in anyway. It is probably not intentional, but it might exist, particularly if products and services have grown organically over time.

    Use someone else with a fresh pair of eyes as they may see things differently than you.

    What may be straight-forward to you, may not be to someone else.

    • Davo1111 on 11/08/2020 - 11:45
      +1

      This is actually a fair point.

      If OP provides "activation steps summary" as part of the checkout process. then the person has less of a leg to stand on.

      Could also link back to a checkbox on the checkout page to confirm you've seen the summary.

  • Zachary on 11/08/2020 - 15:41
    +1

    if they havent used it or has been shipped out, i see no reason why us shouldnt be able to refund theme easily…..also what payment gateway are u using to be charged 20% fee on purchase cost?

  • ozbjunkie on 11/08/2020 - 21:32
    +1

    I was looking for the option "no refunds for change of mind purchases".

    You could still choose to refund on a case by case basis, but would be under no obligation to do it in every case, assuming your description of the product is complete and not in any way misleading.

  • danparty on 13/08/2020 - 08:52

    I'd do a 100% refund in all cases and suggest to customer to leave a good ProductReview.com.au

    More customers will come your way

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