We Do Not Negotiate with Terrorists
ignitiondeck.com
ignitiondeck.com
My refund rate for BCC is 2.7%. That's the easiest one for me to calculate with a single SQL query. Don't hold me to these, but I think AR and my other products are at about 1% and 0.5%.
Refunds are a very easy way to amicably part ways with ex-customers who are not good fits for you, rather than having the resolution where a) they can't use your software and b) they feel like you've stolen their money.
Refunds quickly remove problem customers from your inbox. This will save you time and, more preciously, sanity.
Prominent money-back guarantees frequently increase sales in a statistically significant fashion across your entire company. This is one of the cheapest A/B tests to implement, by the way, since you can create a guarantee by adding two sentences of copy.
Most customers have a fully functional put option on your digital goods, brokered by their credit card company and assignable to you instantly by saying the words "Internet merchant" and "chargeback." You should prefer that customers resolve disputes amicably, via refunds, rather than aggressively, via chargebacks. Chargebacks come with aggressive fees ($15 to $25 plus the purchase) and accumulating too many of them can get your merchant privileges revoked. (This is about the point in the post where somebody is going to suggest adopting Alpha Black Lotus Depository Certificates, which they believe to be superior to credit cards because ABLDCs don't have chargebacks. This is a moot point because your customers don't possess ABLDCs, but be that as it may, charebacks are net welfare enhancing for merchants because, like generous refund policies, they encourage transactions.)
Refunds will not typically meaningfully impact your cash flow in a digital goods business. You probably have stupendously high margins -- they absorb refunds as a cost of doing business quite easily. You can implement a rolling reserve on yourself [++] to cover them -- mine is $500, which is more than adequate at a revenue figure in the six figures.
+ Your accountant may not be happy if you sell goods with perpetual characteristics because it makes revenue recognition more complicated than it needs to be.
++ Rolling reserve = "Don't spend the last $500 in the checking account", which is good advice for a host of reasons, not the least of which being you'll never worry about refunds impacting cash flow.
If you are comfortable sharing it I would love to hear the story behind that.
Signed, Surprisingly Common @ AOL.com
>> Sorry to hear that. Apple changed something in 2010 or so, which makes it impossible to use the downloadable version of Bingo Card Creator on newer Macs. We unfortunately can't fix that on our end. I understand that you can't use the online version, which works on Macs and PCs. Thanks for using Bingo Card Creator for so many years, though. Tell you what, tell me your address and I'll write you a check.
That typically achieved the laugh I was going for. But seriously, if my contracts included a no-fault do-not-pay-Patrick option, my rates would be positively Rumpelstiltskinian to compensate.
There's many ways to de-risk potential offerings. Back when I was consulting, a money-back guarantee was not one which I needed to fill my engagement calendar. Customer references, a bit of a brand name, case studies, and a history of doing pretty much exactly what I get paid to do in a pretty public fashion mostly sufficed.
I can also very easily think of situations where that would have been personally catastrophic to me without any fault of my own (e.g. six months down the line client X exits line of business I consulted on, triggers guarantee on our $50k contract after I've already used that money to pay for my wedding). That strikes me as not a great idea, at all.
I think a lot of people are initially afraid to offer refunds, most notably for digital products. The ones I've talked to always say "but then they can just ask for a refund and get it for free!" Sure... they could, but, hardly anyone ever does from my experience. My advice would be to at least give it a try and see how it works, you might find out that it is actually an effective marketing tool and a way to gain trust while lowering the perceived risk for new customers.
I still lost.
$174 is, literally, less than rounding error.
I am aware of other companies which hew more closely to "Just your last payment", and even one prominent SaaS company with a declared no-refunds policy, but they don't strike me as being material improvements.
Transaction fees associated with refund: a few dollars
Making an ass of yourself in public? Priceless!
Maybe this is a cautionary tale? Personally, I think that both strict no-refunds policies and SEO blackmail threats are antisocial behavior.
Come on kids, you can do better than this.
Think of the bad PR as an investment. These people will hopefully move on to easier targets now.
Not saying I agree, but I think that's the rationale.
And customers wouldn't threaten some bad reviews if VG agreed to refund: They'd just get refunded and move on!
This is a pretty bad PR move in my opinion. In fact, it's worse than the threats that the original customer would have carried in my opinion.
"The reason we do not offer refunds is because our products are digital in nature, and digital products can easily be copied and reproduced."
Wait, what ? As a consumer, I personally dislike companies even if digital that do not offer refunds. yes people can abuse refunds but when it comes to abusive customers, there are many things they can do to waste your time and money even if you don't give them a refund. As far as the digital part is concerned, I don't understand the argument. If they have already downloaded the stuff, then it is always open to be shared with anyone and you really cannot control that. That is the risk of doing digital business. What does that have to do with refunds ?
I am sure most customers are not abusive and refunds can sometimes be genuinely needed. This company sounds like they are trying to be too protective by having these kinds of policies.I would even go too far by saying in my opinion, strictly no-refund companies are a no no for me. Just doesn't give a trustworthy perception to me at least.
Which seems more akin to fraud than honest reviewing.
I take the article to have been more a play on Reagan's statement than anything else:
"If you’re able to remember back to the days when Ronald Reagan was President of the United States, he issues a warning that the United States would not negotiate with terrorists, a policy that has been maintained to this day.
We state this reminder only to explain that we treat our policies in the same manner."
Additionally, refunds can be costly, as fees convert positive transactions into negative ones. In other words, we lose money every time we refund a product.
Lastly, we want to discourage the process of ‘shopping,’ that is, someone testing many products in order to try them hoping to return the ones they do not like."
You can't do business in Europe with that policy. The Consumer Rights Directive expressly forbids it.
"Consumers have 14 calendar days to change their minds and return the goods for any reason
Currently under English law consumers have seven working days to cancel a sales contract and change their minds. This is commonly referred to as the 'cooling off period'. This will be extended to a minimum of 14 calendar days. The 14 day period will begin from the time the consumer receives the goods – not at the conclusion of the contract as is currently the case."
http://www.out-law.com/en/topics/commercial/consumer-protect...
edit - oh, and as far as the Reagan thing, their memory seems selective. - "A few months ago I told the American people I did not trade arms for hostages. My heart and my best intentions still tell me that's true, but the facts and the evidence tell me it is not. As the Tower board reported, what began as a strategic opening to Iran deteriorated, in its implementation, into trading arms for hostages."
edit2 - Also, funnily enough, I am currently looking into buying various wordpress plugins for my employer, and I know for a fact that they would not even consider a company with this policy. So I guess I should thank Nathan for bringing this to my attention.
This customer may be rude, but name-calling and public call-outs don't strike me as a professional response. As others pointed out, they definitely spent more than $300 publishing this post.
And if anyone has diluted the word "terrorism" recently it has been various governments.
Then I read the article, upvoted the OP, and decided to write this.
A better headline would have been "We don't negotiate with blackmailing, SOB bullies who string us along with songs of high praise only to demand - DEMAND - their money back for no reason after days/weeks of a fully supported free trial, and who threaten us with all the fury of god's own social network".
Well, that would have been a more accurate headline, perhaps not a better one.
Given the article, whose veracity I will for now take at face value, the headline used works for me. I have no problem with this particular bit of hyperbole.
It's certainly more SFW than "We don't negotiate with fuck-stick time-wasting rave-rave-rave-then-bail bullies".
Though I would have read that article before coming to the HN comments. :->
There was no free trial. As I understood it, ignitiondeck does not do trials because they "want to discourage the process of ‘shopping,’ that is, someone testing many products in order to try them hoping to return the ones they do not like." (Is that really so bad!!!?!)
So no try-before-you-buy, no refunds. The customer claimed their plugin didn't work for them, after they bought it.
Their policy is what it is, I get that, but it really sucks, and they're just opening themselves up to this kind of negativity. The customer isn't looking so hot here with his ridiculous SEO threats, but neither is ignitiondeck.
Makes me reconsider my conclusion, that does.
That said, my products[1] have a full money back guarantee. A very small percentage of my customers have taken me up on it and the ones who have have almost always had a pretty good reason. The refund policy has basically cost me nothing since Stripe refunds their fee.
//
On a separate note, with no try-before-buy and no refunds, what do you expect?
Why? Because the end result is basically going to cost you a lot more in potential revenue than you are "saving" by not giving a refund. Say it costs you like 3% to do a refund, that is like $9 on a $300 product. That $9 savings is going to cost you hundreds of dollars in negative customer sentiment. If they lose a single sale because of this episode, they are at a net loss of $300 because they really wanted to save $9.
Even if you wanted to factor in customer acquisition costs at say $50 to get that sale, you can't get that $50 back because you spent it either way. More importantly, due to the negative publicity this is generating in the way of "Ignition Deck Scam" type pages on the internet, it is now going to cost them more to acquire new customers. So, that eats up even more of those measly $9 in savings.
No matter how you look at it not having a sane refund policy is costing them more than it is saving them by a mile. What a foolish and shortsighted way to run a business.
Joel wrote about this - http://www.joelonsoftware.com/articles/customerservice.html - 7. Greed will get you nowhere
If such situations are as rare as they claim you will come out ahead.
> …The best I can offer now is we downgrade your account to the IgnitionDeck + Membership level and return the difference of $150. It is not a full refund, nor is it a refund of ($299 – $100), but it is a compromise that allows both parties to meet in the middle.
Which is pretty much what the customer was asking for anyway.
When your customer is not happy just find a way to make them so. Start from solving their problems, then free license extension and get down to the refund.
If you are actually losing worthy money at the end of the year due to refunds, take a hard look at yourself, your business and the unreasonable expectation you set while selling your software.
We apply these principles to selling a software with $6K price tag and it works just fine, it should work much better and easier with $300.
P.S. If your policy is not to make any refunds (which is a bad policy) then make it clear, and when someone tells you stuff like this tell them to "Sorry you agreed our sales terms, no refunds. Thanks." And if they are aggressive, don't answer. Also don't blog about it, so at least rest of the world doesn't know that you are charging people for something they can't use and then announcing them bunch of terrorist because they told you that they'll write their bad experience about your product in various forums -even when they choose a bad way to express this-.
I don't know IgnitionDeck, but this makes me want to never do business with them.