Refund or not refund, that is the question

Should you refund someone after the expiration of your money back guarantee time frame?

As much as we all hope that the day never comes when a customer asks for a refund, it happens even with the best of us.

Time to time as entrepreneurs and business owners we all encounter people who are not in love with what we’ve created and want they money back. But how should you proceed if that happens?

In this post I hope to give a balanced view on what to do in general and how to go on about a few very particular situations.


Honoring the policy

The general rule of thumb to go by refunds is to have a returns policy that clearly states:

  1. the time frame customers can reclaim their funds
  2. the particular situations when you do not accept re-claims
  3. what should customers do with the product they ordered
  4. in which cases is it effective


You can have one returns and refunds policy that is valid for all services and product you have and you might have separate policies for special programs and products you have or have a separate policy for every product or service you put out there. Personally I prefer to have a separate refunds policy for every product or service I offer.


I believe that having a policy in place is always advantageous because it gives a general guideline to go by in case someone wants his/her money back. Sticking to your returns policy in general is beneficial because it allows you to make fast yes or no decisions and provides equal treatment for all of your customers .


However in some cases it might not be the best to stick to your guns…


When to bend the rules?

In certain situations you might need to consider to bend the rules… And this is a very controversial topic that was brought up in an online community I’m a part of.


In that particular situation in discussion the returns policy allowed customers to re-claim their money up to 60 days after the purchase and a client came back more than half a year(!) after the purchase with a very personal story attached to the request.


Members of the community all agreed(including myself) that in that particular case it might be better to let go of implying the returns policy. And the following reasons might give you some ideas in case this happens with you too.


Issues to consider:

  1. How far the customer go in the program/product
  2. The amount to be refunded
  3. The time frame the issue comes up
  4. The personal story attached to the claim


If the customer did not go far with your program, the amount is not substantial, the claim comes within a reasonable time frame and/or the personal story is indeed compelling then the whole situation might not worth to argue about.


In my opinion if the amount is not substantial and the personal story is compelling than additional argument might cause a lot of harm on both sides. For your customer if they really need the money back and your business’ reputation might suffer from it plus the remorse you might feel as a result of saying no. I strongly believe that energetically it is much better to let go and move on.


Who knows, maybe this person will send people in your way because you were so cool to bend your rules and help them in a really sticky situation they were in.


Now you could ask what if this customer was not genuine and fabricated the story just to get their money back? personally I believe if someone invents something horrible personally just to get a refund, then they sooner or later the justice of life will catch up with them. IT ALWAYS DOES! And you’ll have the benefit of ridding yourself from someone who is far from being your ideal client which is going to pay off on the long run.


The bottom line is…

…to have a policy in place but evaluate each and every refund query that comes separately. Stick to your guns whenever possible because as nice of a person you are, you are operating a for profit organization.


Question for you

Has anyone asked for a refund waaay after the expiry date? And how have you hadnled the situation?