Refunding customers that are wrong for efficiency - Is it unfair to other customers?

[Maxwell83]

Okay, weird question but its been bothering me lately.

I serve about 1,200 unique customers a month through my website, and around 1 in 500 will be a customer with an unjustifiable complaint - like blaming a user error on the product and demanding a refund. Its not a physical product I sell, its an electronic download - once they have it, it can't be returned and I can't prevent them using it. So by giving a refund, they keep the benefit of the product but for free.

It would be easier to refund them rather than enter into back and forth email exchanges, the time I spend on it is not worth the cost of the item. The number of transactions it happens with is miniscule and refunding all of them wouldn't make a noticeable difference to profit.

BUT I weirdly feel like its unfair to all of the other 'good' customers that have paid their money for the same product if I just give away the product to every scammer or fool that demands a refund.

If I don't refund them, some go on to raise a merchant dispute but I always win them (7.5 years operating,130,000 customers, 82 total disputes, 40 "product not acceptable" disputes - all won.) This only serves to validate my feeling that I should stand my ground, but giving in at the first demand of a refund is the easier and more efficient option.

For context, justifiable refund requests are about 1 in 200 but I refund those quickly and move on - as I say its easier this way.

So how would/do you handle the chancers/idiots, and do you ever feel like you need to be fair to your good customers by not giving in to the bad ones?

 

[StevensOnln1]

What sort of download is the product? Can you build in some method of disabling access if the purchase is cancelled/refunded?

 

[Paul Kelly ICHYB]

Sometimes, just getting rid of them (by refunding) can save a lot of time and stress.

If you are prepared to fight and the costs associated, keep fighting.

You do need to ensure that you have good T&C's and the ability to switch off the product would also be good.

 

[Ozzy]

It would be easier to refund them rather than enter into back and forth email exchanges, the time I spend on it is not worth the cost of the item.

This is a very valid reason just to be done with it, so carry one.

However, as mentioned above, I would seriously considering implementing something in the software that means it can be remote locked for people who have been refunded. Yes some will find hacks around this but the majority won't.

 

[Maxwell83]

What sort of download is the product? Can you build in some method of disabling access if the purchase is cancelled/refunded?

Its bundles of PDF documents. The biggest issue being that anything I would need to do to add a remote 'kill switch' or similar would add time to every single sale, when the idea is a fast turnover with as little work as possible.

Sometimes, just getting rid of them (by refunding) can save a lot of time and stress.

If you are prepared to fight and the costs associated, keep fighting.

You do need to ensure that you have good T&C's and the ability to switch off the product would also be good.

This is a very valid reason just to be done with it, so carry one.

However, as mentioned above, I would seriously considering implementing something in the software that means it can be remote locked for people who have been refunded. Yes some will find hacks around this but the majority won't.

I do agree. Its just easier, and therefore cheaper (time is money and all that). It just doesn't seem fair that everyone else pays their money and these jokers get the freebies. But the issue is purely psychological on my part - I need to find a way to get over "fairness" element and also to put my pride aside and be purely £££ focused!

 

[fisicx]

I’m struggling a bit to understand what these unjustifiable complaints are. They know exactly what they are downloading so what issues are they having.

And whilst it does shut them up I’d fight them on principle. I do so with my clients. I point out the agreement they signed that details what they are paying for and that normally ends the complaint.

 

[Maxwell83]

I’m struggling a bit to understand what these unjustifiable complaints are. They know exactly what they are downloading so what issues are they having.

And whilst it does shut them up I’d fight them on principle. I do so with my clients. I point out the agreement they signed that details what they are paying for and that normally ends the complaint.

Real life example - just under the product selection dropdown box on the order form, it says something to the effect of "if you are looking for XYZ, order product 2 because product 1 doesn't provide XYZ".

That same statement is repeated in the T&C's, in the FAQ's, I even have a special warning that pops up dynamically when certain things are typed by the customer in the comments box! There are so many warnings.

Customer orders product 1 anyway (its cheaper than product 2) and then complains that product 1 doesn't provide XYZ. This is not an exageration, this is exactly what I have seen.

Its almost as if some people just won't read information thats there to guide them, they just land on the site and bang out an order as quickly as possible.

 

[Newchodge]

I’m struggling a bit to understand what these unjustifiable complaints are. They know exactly what they are downloading so what issues are they having.

And whilst it does shut them up I’d fight them on principle. I do so with my clients. I point out the agreement they signed that details what they are paying for and that normally ends the complaint.

To give you an example that has nothing to do with the OP. A while back I downloaded (bought) a legal template. It was worse than useless, it was not legally compliant it did not achieve its primary purpose and it was a waste of money. However, technically, it met the description on the website. Did I have a justifiable complaint, according to the provider?

 

[Maxwell83]

To give you an example that has nothing to do with the OP. A while back I downloaded (bought) a legal template. It was worse than useless, it was not legally compliant it did not achieve its primary purpose and it was a waste of money. However, technically, it met the description on the website. Did I have a justifiable complaint, according to the provider?

For me, thats the type that I would refund without issue - not compliant, doesn't achieve the advertised goal. Its justified IMO.

My own example above, where the website specifically says "it doesn't do XYZ!!", are the type I deem unjustified.

 

[fisicx]

Its almost as if some people just won't read information thats there to guide them, they just land on the site and bang out an order as quickly as possible.

They don't. Which could mean changing the dropdown. Or having different pages for each bundle.

What they do is look at the options in the dropdown and then go to pay. I'd probably do the same. But changing the actual words in the dropdown could make a difference.

Or you could replace the dropdown with buttons each of which has a label describing the content of the bundle. I've recently done something similar for a client. In their case you have a multistep form with conditional questions that gave them the correct product at the end of the form. It resulted in more people buying the more expensive product.

 

[Paul Kelly ICHYB]

Add.that comment to the description and ensure it is visible on the order form, invoice etc.

 

[Fagin2021]

Real life example - just under the product selection dropdown box on the order form, it says something to the effect of "if you are looking for XYZ, order product 2 because product 1 doesn't provide XYZ".

That same statement is repeated in the T&C's, in the FAQ's, I even have a special warning that pops up dynamically when certain things are typed by the customer in the comments box! There are so many warnings.

Customer orders product 1 anyway (its cheaper than product 2) and then complains that product 1 doesn't provide XYZ. This is not an exageration, this is exactly what I have seen.

Its almost as if some people just won't read information thats there to guide them, they just land on the site and bang out an order as quickly as possible.

Then it's their problem - not yours. Don't encourage bad behaviour by giving a refund. Just point out to them the sections on the site that say Product 1 doesn't do XYZ and tell them that, like all software vendors, it's your policy not to refund downloaded products.

If they want to take it further with a losing case that's up to them.