Ask HN: How do you get over the pain of refund requests? | Hacker News Reader

Ask HN: How do you get over the pain of refund requests?

20 pointsgburt17 comments

Every time I get a refund request I feel like I've been personally attacked -- often they're customers where its incredibly obvious that they're intentionally exploiting my favorable refund policy, and as such I shouldn't be insulted, but still, I feel it.

My refund rate is fairly low (less than 2% -- I've talked to other vendors in my niche and they report much higher refund rates). I have a prewritten response to refund requests that asks for feedback and offers a range of solutions -- in fact, it stops about 50% of refunds from being actually wanted. Its the other 50% that are mostly not in good faith anyway that are really bothering me.

I know I'm not alone here. Should I just be paying someone else to deal with my billing stuff entirely to separate my emotions from how things are going on the sales front?

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Sell more. You'll end up issuing more refunds, and eventually get used to it. It will stop hurting eventually.

When I first started http://anynewbooks.com, the occasional un-subscription or "Enough! Stop sending me emails." message would bother me a little.

Today, I don't even blink at unsubscribe notices. And when I get the occasional "Remove me!!!!111!!!!", I simply unsubscribe the person who doesn't understand that an unsubscribe link is provided.

No big deal. I know that refunds are a little more personal, but like most things in life, you get used to it. You'll grow a thicker skin.

Just focus on selling more copies of your product. And focus on improving your product for all those people who didn't ask for a refund.

If after issuing dozens of refunds you still can't get over it, then outsource it.

I have issued dozens, probably about 200 at this point, I'd estimate. Selling more is always good advice though, +rep.

I'm in an extremely niche market for my best selling stuff, so selling more is likely going to involve new products. Something I am working on, of course. :)

Got it. Here is what I'd do.

1) Direct requestd for refund to a specific form on a page.

2) Have a virtual assistant receive such emails.

3) Instruct such assistant to issue legitimate requests for refund under whatever process you currently follow.

4) Ask her to forward bona-fide feedback to you. So that you can use it to improve your product.

5) At the end of each week or month, ask for stats.

This should prevent you from dealing with the issue first-hand, while still figuring out any real issue.

BTW, are you an Italian developer living in Canada, too?

Run the numbers, calculate the percentage of your income lost, and just consider it another unavoidable cost of doing business. I imagine you don't like paying Paypal, Google Checkout, or merchant account transaction fees, but I also imagine you don't feel personally slighted at having to pay them. Put people exploiting your refund policy in the same bucket.

If this is a subscription service, automate the refund process such that you can you can send a single email with a link that will let them provide feedback, cancel their service, and refund their money.

If you're selling software bits consider a serial number system that will allow you to remotely disable people who have requested refunds. Also, keep your refund policy but stop advertising it. This way you prevent bottom feeders from even knowing it's an option. If you notice this is costing you more sales than you gain, go back to advertising it and re-read paragraph one.

Yes, it sucks, but I'd keep doing it yourself for a few reasons for both refunds or even folks who want to cancel your service after some time (assuming its subscription-based):

1. It'll offer you an opportunity to get feedback which can help make your product better.

2. It can turn a hater into a net promoter if you do it right.

3. Direct outreach from the founder of a company makes your firm more human (not sure what industry you're in but in ours, people really appreciate it). It may not turn the "gamers" into buyers, but if you believe most people are good, they may be less inclined to game if you're not just some "evil business"

And although I also sometimes remember rejection more than successes, I find these requests motivate me.

Note: I've got no sense of volume you're dealing with so I'll caveat the above with that if it's becoming a time-suck.

Do you have a 'no questions asked' refund policy? Do you still ask questions as of to why?

We do have such a policy, but we do ask 'why?' in a manner that aims to clarify and improve our service. A subset of the users are nice enough to explain and sometimes addressing that root cause cuts refund rates by about 25%.

Btw, would you mind sharing the points in your refund response email template? I would assume the effectiveness would depend on the nature of product, but it'll still be educational me thinks.

Get used to it. I think paying someone else to deal with billing stuff is a fine idea, but don't distance yourself too much. I could easily delegate out the "refund reply" job, but I choose to do it personally.

It's really easy to turn a refund request into a repeat customer. If you're getting people "gaming" the system, change your policy.

I offer an unconditional refund policy at my service business, and I've had to deal with the same feelings. In my case, I would often spend a few hours working personally with the client, only to refund their money afterward.

However, I continue to offer the policy because my refund rate is low (about 1-2%) and the increase in sales due to the policy is substantially higher than that. The way that I see it, giving out a few refunds is a cost of doing business, and I don't begrudge refunds any more than I begrudge taxes, merchant fees or rent increases. Looking at refunds mathematically takes some of the pain out of paying them.

I'm also somewhat comforted by the fact that a refund policy is a way to resolve genuine client dissatisfaction: In my view, giving refunds to undeserving people is far preferable to clients actually leaving dissatisfied and possibly badmouthing my company.

Could you explain this a little more:

"Its the other 50% that are mostly not in good faith anyway that are really bothering me." particularly "not in good faith"

Consider it this way: a lot of less successful startups and service providers would love to be issuing refunds!

console yourself with the knowledge that handling a refund is better than a dealing with a credit card chargeback.

The answer is simple: yes. If you find dealing with purchase support emotionally stressful, definitely outsource it. Just make sure you receive weekly reports so you can keep your eye on trends.

Are these repeat refunds or just one-time customers? Also, are you sure of the reason for the refunds is what is bothering you and not that the money from the sale was already spent?

Its certainly not that the money is already spent. I'm in a fairly good position right now with respect to that.

Refund is good. I hate chargeback!

You need to develop a thicker skin. It's just business.

Except nothing is as personal as business.

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