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Comment by theNJR | Hacker News Reader

I was the CMO for a unicorn CPG[0], so slightly different take since we sold a physical product.

We went crazy with our money back guarantee. We had countless people whose 'dog' ate their product while still on the doorstep. One person said their cows ate $250 worth. Another person bought a few hundred dollars worth used from someone on a random forum. They all wanted a full refund. A newly hired email marketing coordinator mistakenly sent an offer for free product to 50,000 existing customers that was meant for a small group of new customers.

In every instance, we didn't think twice and gave them what they wanted. The outlier bad actors didn't make a dent when you looked at the entire business.

The philosophy that they were exploiting is what made us worth $1bn.

[0]https://www.inc.com/profile/quest-nutrition

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This is a great piece of advice. However I think it should be added that a strategy that works for snack products (sub $10 purchase) may not be successfully transferred to more expensive products.

It only works as long as the effort for a money-back is essentially not worth most customers' time. This is almost always the case for a sub $10 product, but the economics look different for e.g. a $100 product or a $1000 product.

This works, but you better have a sizable and stable business that already has been proven, and now want to increase volume by removing risk and uncertainty from the minds of potential customers.

If you're in the red, strapped for cash and still figuring out if your business works, that would be a hell of a gamble.

Actually it works far better for new businesses. People don't know your product and won't risk it, especially buying online. The guarantee leads to a hell lot of sales and marketing.

People avoid manipulating the little guy and usually the people at your doorstep early on are quite desperate for a solution.

If anything, this scales poorly to large companies, because they get on exploit forums and it's difficult to train staff to make the call differentiating between valid and fake claims.

You'd be surprised how few people are willing to be bad actors.

The other thing is that tests have proven people trust more if you offer a warranty or even a money-back warranty.

Skullcandy headphones are a great example, they're budget headphones that are nothing out there, a little pricy but they have a lifetime warranty. What's a lifetime warranty? They'll replace them as long as you are alive.

V-Moda had (still have?) a similar warranty on their headphones. They broke every year like clockwork, and every time I mailed it in for a brand new pair. This went on for at least four or five years.

At least with my recent V-Moda pair they changed it to send us your broken ones and we'll give you a certain amount off your next pair depending on what pair you're sending in and what pair you're buying next. Still a good experience but not as good as the old it broke so here's a shiny new one for free.

Agreed. I remember those bad actors because they were so extreme and rare. Certainly less than 1%.

Reminds me of this time when I bought a box of andes mints circa 2007. The glue that was used to hold the packaging closed was all over the chocolate. It wasn't a big deal, but I was disappointed and I wanted to let them know so they can fix the problem.

They wrote back to me saying, "Don't worry, the glue is edible." Ok cool. I don't want to eat the "glue", but I think they missed my point. So I reply suggesting people probably don't want to eat the glue so they should fix the production issue to improve the quality of their product, even if it's just aesthetic. They wrote back asking how much free product would make me happy. None. I didn't want anything for free, I just wanted to make them aware of the problem. But they're operating on the assumption that everyone who complains is a bad actor who wants something for free.

But sometimes a money back guarantee is just a good channel to get valuable feedback, if you're willing to accept it.

> everyone who complains is a bad actor who wants something for free

You'd be surprised how often that is true.

Most companies are willing to send free stuff in order to improve your mental image of their product or service.

If a company's product or service is bad, there's no amount of free stuff that they could offer that would improve my image of them.

What does improve my image of them is if they acknowledge the problem, treat it (and me) seriously, and make a credible-sounding promise that they'll fix the problem in the future. If all that's done, giving me a refund or replacement will further enhance the company in my eyes, but if it feels like they're just buying me off, it doesn't.

I realize that. I'm saying they're not actually solving the problem, nor are they improving their image. In some cases, sure the customer has been wronged and a replacement should be sent. But that's only half the solution, and the less important half at that. More importantly, they have to find a way to prevent that problem from happening again so they don't alienate the much larger group of people who will never complain but will simply switch brands.

It's mostly prevention for chargebacks.

Companies hate the bad rep for chargebacks.

Most companies would rather refund your money with no questions than deal with the wrath of credit card companies.

This reminds me of some great customer service I had at a fast food place in the Uk called Leon.

I had a problem with a meal, something minor like an over cooked egg. When I returned it the manager said “Thanks so much for telling me. I will go make sure they do the next one right. And of course here’s a replacement.”

It really stood out to me because of the thank you, not for the replacement meal. Attitude is everything!

It makes you feel like you're both on the same team!

How many customer support teams have the agency to be able to make changes?

If you are working in customer support for a company that won't fix problems, a user telling you about a problem is just another problem.

Often customer support really really know about the problem, they just can't do anything much about it...

This is exactly why I urge companies to have CS be part of marketing. And then hire a marketer who understands how good CS is the cheapest marketing they do.

You just have to be careful if the bad actors start to recruit other bad actors. There are discords and Facebook groups that are dedicated to sharing where you can exploit a generous policy or error.

There's a difference, I've seen plenty of people pile into pricing errors on websites.

Noone's buying 500 headphones just to return them a money back guarantee.

The only issue you'll have is people abusing the crap out of stuff and expecting a money back guarantee.

I think there is a difference in most people's minds between exploiting an upfront pricing/policy mistake and lying after you agreed to pay for something.

One is legal, the other one is a crime for starters. Morally it feels fairly different too.

This is true, but the counterweight is that there are good actors who recruit other good actors too.

> The other thing is that tests have proven people trust more if you offer a warranty or even a money-back warranty.

Personally, in my own purchasing decisions, warranties mean nothing to me (They're a huge hassle, and I've never had an experience with warranties that didn't make me feel like I've been ripped off) -- but money back guarantees mean a huge amount.

Buying something without trying it first is a very risky thing to do. A money-back guarantee (particularly a no-questions-asked one) removes that risk from me and makes it much more likely that I'll take a chance on a product.

Wonder how many of those people (who I'm assuming were frauds), tried to "make it up to you" by speaking well about your company to others. Seems like something a psyche might do to balance out the lie; "Yes, I lied, but I made it up to them by saying good things about them to my friend, so I am still a good person."

And perhaps more importantly, how many of them would have gone on a campaign of vengeance had you not given them a refund, and spoken badly about your company to perhaps thousands of people through online forums.

The cows one at least, is likely true. Cows are very curious and will tear into anything new. Especially any new box they find. Not a good idea to let them get up near your house, but not that uncommon either.

I once saw a cow take a big cow sized bite out of the brand new, exposed vinyl seats of a speed boat that was parked in the driveway. She didn't seem to like it, but she took a few more bites just in case.

My dog isn't that curious, but if he gets curious about something he vets it by trying to eat it, twice, just in case.

I don't doubt that cows at their protein bars, but we were pretty far removed from that causality chain (Why were the cows near your mail? Why was FedEx leaving packages near cows?)

Cows do what the fuck they please in many rural areas.

Source: Been to a rural area more than a handful of times.

I can't believe Quest Nutrition was founded in 2010. I started exercising regularly around then, and I remember people talking about it being the only bar worth buying in like 2011-2012. Based off how people talked about the company, I thought it would have been around since 2003-2005.

Did you find us on Reddit? I made it a mission [0] to be the most talked about bar on Reddit in 2011/2012.

[0]https://www.nicholasjrobinson.com/blog/culture-2-0/hacking-h...

>One person said their cows ate $250 worth.

That's what you get in the luxury grass as a service business!

GaaS, baby!

Zappos has a similar policy with regards to their unlimited free returns and exchanges. They have a tiny group of customers who abuse the hell out of it (and all their customer service reps know who those are), but by and large the policy is responsible for Zappos's massive success (before it was bought by Amazon).

Can you apply this same approach (i.e. full refund to an unsatisfied customer) and still be successful as a consultant/freelance? I feel like the stakes are higher because the client could rack up a huge bill then play the “unsatisfied” card leaving you high and dry for your time.

If the service is writing code, I won't give them the work if they end up wanting a refund. If the service is something monthly, I'd only offer a guarantee on the first month. So I'd say it would still definitely work for freelancers/consultants. Jonathan Stark has a lot of material about this subject that covers more of the nuances.

Thanks for the feedback and reading/listening suggestion! I'll start to dig into it tonight.

I've seen stuff from you guys. That looks amazing what you're doing (keto comptabile chips) I'm going to have to try them.

We made this entire line of frozen Keto meals, but were 2 years too early. Should have raised some VC and spun that out. The tortilla chips are insanely good though.

I wish the didn't use Sucralose in their protein bars; or even stevia, it's like a bad aftertaste on top of a bad aftertaste.

Sweeteners are a very complicated science, and there is no perfect solution yet. But just about anything is better than real sugar.

'Better' except that they all taste awful...

Stevia is usually pretty good but have to keep the amount low.

Lol, I actually like the bars :p

They have a lot of sodium though

The ‘salt is bad’ meme is about as dead as the ‘fat is bad’ one.

A study [0] of over 90,000 people found that “… At moderate intake, sodium may have a beneficial role in cardiovascular health, but a potentially more harmful role when intake is very high or very low. This is the relationship we would expect for any essential nutrient and health.”

[0]https://www.thelancet.com/journals/lancet/article/PIIS0140-6...

I never said it was bad, it was an observation with other brands.

Ps. I don't trust a lot of research online : https://youtu.be/dQw4w9WgXcQ

What does CPG stand for?

Consumer Packaged Goods

Quest bars are amazing... Wish they were vegan though. I miss em.

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