Bob Bly Direct Response Copywriter Official Banner

4 Things You Need to Know About Refunds

June 11th, 2011 by Bob Bly

Many marketers, both large and small ? and I include myself among the latter ? go bonkers when customers return products for refund.

BK, an executive with one of the biggest and most famous direct marketing publishing companies, told me each refund request drives the company?s owner crazy.

?Our books contain great information, incredibly valuable,? the boss says. ?Why should we allow someone to read the book, benefit from all that great content, and then cheat us by sending it back for a refund??

Perhaps you may feel similarly, or you?re asking the same question. If so, let me share with you a few important facts about refunds in your business.

FIRST, a refund doesn?t mean your product is bad or the customer doesn?t like it.

It may mean that, after reviewing your product carefully, they decide your product is not right for them.

Example: a customer returns your $300 DVD set on investing in real estate.

?It actually seems like a great program,? the customer says in his refund request. ?But after watching it, I?ve decided this isn?t a business I want to get into ? it?s just too much work!?

To me, this is a perfectly legitimate ? and reasonable ? position for the customer to take ? don?t you agree?

In this case, offering a refund is not only a legal requirement, but also eminently fair:

Why would you want your customer to be out of pocket $300 for something he can?t use?

SECOND, offering a refund doesn?t cost you money. It makes you money.

Novice marketers fret about offering a money-back guarantee.

?If I do that,? they worry, ?won?t some customers take advantage of me by reading my book, profiting from the information in it, and then sending it back for a refund??

Yes, some will.

But here?s the thing: offering a money-back guarantee reduces buyer reluctance and increases buyer confidence ? resulting in more orders.

In almost every instance, the greater revenues and profits from the increase you get in orders by offering a guarantee is MUCH greater than the small amount of money you lose issuing refunds.

After all, would you buy a product for $30 or $100 or more ? sight unseen ? without a money-back guarantee?

Of course not.

THIRD, longer-term guarantees are better than shorter-term guarantees.

If you are currently offering a 10 or 15-day money-back guarantee, extend it to 30 days.

Already offering a 30-day money-back guarantee? Test a 60 or 90-day money-back guarantee.

The longer guarantee term invariably increases response rates and sales, because it eliminates the concern buyers have with short guarantees ? specifically, that they will forget to open and try the product — and by the time they get around to looking at it, the guarantee will have expired and they?ll be stuck with it.

But amazingly, the longer guarantee actually reduces refund requests, rather than increases them.

Reason: the buyer is in no hurry to evaluate and return the product, because you are allowing him to try it according to a more leisurely schedule.

Result: the buyer soon forgets about the guarantee ? and whether he actually uses the product or not, just keeps it.

FOURTH, generous guarantees sell more product than miserly guarantees.

Ever see a guarantee that says money back if product is returned ?in saleable condition??

The prospect worries that you?ll claim it arrived scratched or broken, and won?t honor your guarantee because it?s damaged and can?t be resold.

Similarly, some sellers of information products offer a money-back guarantee, but only if you offer documented proof that you followed their system and it did not work for you.

But what if I get your system, and something comes up, and I decide I don?t have time to work through it ? are? you telling me I?m stuck with it because I didn?t use it?

The more unconditional your money-back guarantee, the higher your response rates.

Conditional guarantees depress orders.

Here?s one interesting thing to consider?.

A year or so ago, I began selling e-books online.

With a physical book, the guarantee is: if you don?t like it, return the book, and we will refund your money.

But you can?t really return an e-book.

I thought about eliminating the guarantee, but realized this is absurd.

So instead, I stress the fact that they can get a refund without returning the product in my guarantee, rather than downplay it.

My standard e-book guarantee reads:

?If you are not 100% satisfied for any reason ? or for no reason at all ? just let me know within 90 days.

?I?ll refund your $29 payment in full. No questions asked. And you can keep the e-book FREE, with my compliments. That way, you risk nothing.?

Result: my refund rate on e-books is lower than for any other information product I sell, including CDs and hard copy books.

In fact, I get very few refund requests on e-books, though one could say my guarantee openly invites people to take advantage of me.

My conclusion?

Yes, there are a few con artists out there.

But most people ? especially when you are open and fair with them ? are honest, and will be fair with you in return.

So, follow my advice on refunds in your business. Then watch your sales volume ? and profits ? soar.

I guarantee it ? or your money back!


This entry was posted on Saturday, June 11th, 2011 at 9:32 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

846 responses about “4 Things You Need to Know About Refunds”

  1. Ben Settle said:

    I stopped offering guarantees on my high ticket products and sales increased, with none of the refund headaches, and customers who tend to be of a higher quality than usual.

    Cold prospects I do offer guarantees to, though.


  2. Darren said:

    Interesting post. A book I’ve been reading mentions the effectiveness of refunds as well.

    I think the psychology behind this is that since you’re offering a risk-free product first, most customers will like that and reciprocate by buying.

  3. OddGrooves Drum Loops said:

    I couldn’t agree more with your post. My products are all downloadable, and since I started offering a 30-day guarantee my sales have increased by well over 50%. I get VERY few refund requests. At that time our biggest competitor did the exact opposite and revoked their guarantee.

    I’ll definitely consider extending the guarantee to 90 days and see what happens.

    Thanks for a great blog post,

  4. Brian Croner said:

    I have used a 1 Year Guarantee on books and have found almost zero returns. I found that it put my customers at ease about the purchase and they weren’t in any hurry to pour over the material… and thus, forgot about the guarantee. To Bob: Isn’t a 15% or lower return rate still considered profitable for most mail order operations?

  5. Katherine said:

    I’ve bought a number of your products, Bob. I even returned one once, because it wasn’t what I was looking for. But you’ve always been so considerate and generous that I really think before I buy from you now because I don’t want to return anything. I think it’s a little tacky.

    My blog is I don’t sell anything there yet. I’m just trying to get regular traffic — minimum 20 visitors a day. My last blog is Be Healthy Online — for Internet Entrepreneurs. I think as online professionals we face our own set of health challenges — and I address some of these today on my blog. You’re welcome to stop by — you may read something very helpful and free too! To Our Health!

  6. Bodybuilding Diets said:

    I find it risky to refund e-books. People might already have copied everything and then decide to refund the e-book and sell the content as their own. By the way, how do you stop e-book owners from selling their copy of the e-book?

  7. What to Invest In said:

    I agree with Bodybuilding Diets. There are too many dishonest people in this world who would stop at nothing to copy an e-book, change the cover, change the title, rewrite everything and sell them as their own.

  8. invest in gold said:

    Great information, also.. If you are an active trader, make sure that
    you have ways to access your account even if you are not
    near your computer or the site is down. Most online trading companies give you
    the option of calling or faxing trades. Remember that there may be additional fees associated with these alternate trading methods, however.

  9. local florists surprise someone with fresh said:

    Do you mind if I quote a couple of your articles as long as I provide credit and sources
    back to your site? My blog is in the very same area
    of interest as yours and my visitors would really benefit from a lot of the information you provide here.
    Please let me know if this ok with you. Thanks a lot!

  10. back stretcher infomercial said:

    Write more, thats all I have to say. Literally, it seems as though you relied on the video to make
    your point. You definitely know what youre talking about, why waste your intelligence on just posting videos
    to your site when you could be giving us something enlightening to read?

  11. medicinal marijuana merchant account said:

    In this article, we will briefly outline the health effects of merchant account for medicinal marijuana dispensary.
    Contrary to popular belief – that marijuana merchant account is harmful for you – newer and emerging studies are demonstrating that the there are nontoxic
    ways of using the medicine, and that it can provide substantial results for patients
    without any feared complications, drug interactions or adverse reactions.

    You really can learn a lot by looking into the deeper, symbolic
    meaning your dreams have.

  12. said:

    It’s in point of fact a

    great and helpful piece of info. I’m

    satisfied that you simply shared

    this useful information with us. Please keep us

    up to date like this. Thank you for sharing.

  13. Progenpeptides.Com said:

    That is definitely actually engaging, You happen to be a very expert blog writer. I have joined ones feed and search ahead of time so that you can seeking extra of the great post. Additionally, I have provided your blog inside my web sites

  14. Laura said:

    Greetings! My spouse and I often publish guest articles for
    other blog owners to help increase exposure to our work, as well as provide good content to website owners.
    It truly is a win win situation! If you’re interested feel free to contact me at: so we can communicate further. Thank you!

  15. myofascial pain syndrome said:

    hello there and thank you for your information – I’ve certainly picked up anything new from right here. I did however expertise some technical issues using this website, since I experienced to reload the website many times previous to I could get it to load properly. I had been wondering if your web hosting is OK? Not that I am complaining, but slow loading instances times will often affect your placement in google and can damage your quality score if advertising and marketing with Adwords. Well I am adding this RSS to my email and could look out for much more of your respective exciting content. Make sure you update this again soon.

  16. Rosario said:

    It’s not my first time to go to see this web page, i am visiting this web site dailly and obtain good facts from here every day.

  17. large appliance repair said:

    Write more, thats all I have to say. Literally, it seems
    as though you relied on the video to make your point.
    You obviously know what youre talking about, why waste your intelligence on
    just posting videos to your blog when you could be giving us something informative to read?

  18. Micki Pollutro said:

    Hello there! I could have sworn I’ve been to your blog before but after going through many of the posts I realized it’s new to me. Anyways, I’m definitely happy I discovered it and I’ll be bookmarking it and checking back often!

  19. Edmund said:

    I think this is one of the most significant info for me.
    And i’m glad reading your article. But wanna remark on few general
    things, The web site style is perfect, the articles
    is really nice : D. Good job, cheers

  20. Maximilian said:

    Its such as you read my mind! You seem to
    know a lot approximately this, such as you wrote the e book in it
    or something. I believe that you just could do with a
    few % to power the message home a little bit, but instead
    of that, that is great blog. A great read. I will
    definitely be back.

  21. Sheldon said:

    Thanks , I have recently been searching for information about this subject for a
    while and yours is the best I’ve came upon so far.
    But, what concerning the bottom line? Are you positive about the source?

Leave a Reply