A former community discussing the business of software, from the smallest shareware operation to Microsoft. A part of Joel on Software.
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Doug Nebeker ("Doug")
A guy buys from me only to ask for refund 2 days later on " I didn't like it" excuse....
Well we all have trial periods and demos, don't we?
Traditionaly I refund without questioning if any polite reason is given ( like: it doesn't work, I made a mistake, need money for food...)
But I didn't like it? C'mon...
Been discussed here to death.
Refund and move on. Anything else is not worth your time.
Friday, February 15, 2013
I actually disagree with "refund and move on". You should have a clear refund policy. If it says you will refund no matter what, then refund. Otherwise see if the case meets what your policy says. Ours for example clearly states that a refund will be given ONLY if the software does not work and we cannot provide a solution within 2 weeks, and provided the customer has actually deactivated the software and tried to follow our recommendations at fixing the problem (the actual policy is a bit more precise and lengthy of course).
If all business would operate by that motto "refund and move on", they would all be bankrupt in days, and making better product would not solve a thing, because there will always be a small percentage of people who will demand refunds no matter what, though this percentage may be high enough to turn you from profit into loss.
Chances are it will not damage your reputation, as surely: 1) you are following you policy which was available for review BEFORE purchase, and 2) there are plenty of happy users who would support you with testimonials, and 3) if you have a good/unique product.
And a note on support. Many people have rightfully stated that supporting such customers is a headache and better to just refund. But again it depends on your policy. If you do include free support for lifetime or a year and that includes bugging you with any question imaginable every day, then yes perhaps it's cheaper to refund. On the other had if support is limited to only fixing a clear defect/problem with software and only once, then I would not be so fast on refunds.
There is a question of charge back too. That depends if the payment was by credit card, in which case if it is small amount, it is not likely customer will go through the hassle. In addition certainly some banks need prove that the good was not delivered or does not work. If it's PayPal, bank transfer or other form of payment, there are different things to consider, but the logic is still the same.
And one last thing to re-emphasize is that if you have no way of proving that the customer will no longer be using your full version of the product in the future (your product has no (de)activation mechanism built-in), you may think more carefully about issuing a refund.
Here's actual example of a Refund Policy:
We do give the industry-standard 30-Day Money-Back Guarantee under the below terms.
We promise to refund the full amount for the purchase of the product (and any other related products/services purchased together with it) on your request, only in the following 2 cases:
1. You are not able to use certain advertised product feature(s) or functionality, where it is not a result of not following compatibility requirements of any sort including, but not limited to: running the product on an unsupported, damaged, or malware-infected (Operating) System, trying to use the product in a way it was not designed, etc.; providing you reported the problem within 30 days of your purchase and our support team has failed to fix it within 15 days from the time the problem was reported even though all the necessary information directly related to the problem was provided by you to our support team and you have precisely followed all its recommendations.
2. The delivery (and where applicable activation) information for the product(s) purchased has not been made available to you within 48 hours of the processing of your order; or such information was either incomplete or invalid (i.e. non-functioning download link) and we failed to provide a solution within 48 hours of you contacting us. This does not apply to cases where the order confirmation e-mail containing the delivery and activation information was sent but has been blocked by your anti-spam protection or if you mistyped/mispasted the download link or the serial number. It only applies to cases where the above is a result of a server failure or some other failure on our end.
Any other reasons for seeking a refund including, but not limited to: disliking the product, inability to achieve certain results with the help of the product that have not been explicitly advertised, disagreeing with the terms of the End User License Agreement or the terms of the Licensing and Activation Policy, etc. are not to be taken as valid reasons for seeking a refund; and thus no refund will be issued in such cases.
In addition, before a refund can be is issued: provided the product has been downloaded/delivered, the product must be uninstalled from all devices where it was installed, and properly deactivated on all devices where it was activated (in cases where activation was necessary to start using the product); downloadable setup removed from all storage media; and Optical Disc(s) destroyed in cases where the product was physically delivered on an Optical Disc(s). This statement also applies to any additional free bonus product(s) that came with the main product (i.e. as part of a special offer).
Note that the above Money-Back Guarantee is void and no refund will be issued if the End User License Agreement (EULA) that comes with the product and governs your use of it has been violated in any way.
I have not included clarifications for , , etc.
George, do you really expect your buyers to read that document prior to purchase?
Dmitry Leskov @Home
Friday, February 15, 2013
@Dmitry. I think this is more of a rhetorical question. Of course they should, and in fact all buyers always should at least try to tread all the ToUs, EULAs, and so on, just as they should do that when signing up for a credit agreement, jobs contract (perhaps not as carefully depending ion the sum involved). After all, I am sure even software devs do read various legal text when they sign up for some service like AdWords, or buy a domain name via some registrar.
The important thing is that such policies should be easily available (via links, checkmarks, disclaimers, or in other form) on all order pages, so that customers are fully aware of the legal policies governing their purchases and software use, and this should really be normal practice.
As Joel has pointed out, the customer can do a charge back on their credit card and you'll be out the money anyhow. So, you might as well be a nice guy and just refund yourself. Even better, advertise that you're a nice guy and will refund anybody for any reason and then you'll get more sales.
Friday, February 15, 2013
Give the refund.
If I do not like something and am forced to pay for it, I will likely slag it whenever it comes up in conversation. Were I to get my refund, I would say something like, "I tried it. I did not like it. You might though. They did not give any hassle about a refund."
George: You would have me jump through various hoops? What would you accept as proof that I had done so? Are you prepared to compensate me for my lost time should it turn out that I have done so and your software is at fault? I have my doubts. There is usually more than one product in an area so I usually have the option of dropping from consideration products with onerous requirements. You can be totally right legally and totally wrong w.r.t. customer relations.
Instead of worrying about one particular refund I think you should be looking at your refund rate, sales process and general user experience.
How often are you asked for a refund?
Looking at my stats the refund rate is < 1% and has been for the last 3 years.
If it moved up to say 5% I would consider changing my policy.
Incidentally my policy is : "30 days, no questions asked".
Refund and move on.
Most customers don't read all the contracts and expectations you have of them that they are required to download a trial or what not.
So he bought it without testing it first and hates it. Give him the money back politely.
By telling him off you now have someone who can share his experience with you as a toxic merchant in web forums.
We all lose our shit from time to time, but we should endeavor not to.
Go home and kick your dog if you are frustrated, not the customer.
(Don't kick the dog, that's a bad joke.)
Racky, if going to that extreme, wouldn't it just be easier to acquire a large arsenal and publish a manifesto on facebook outlining your grievances against the customer who returned the product, threatening to wage asymmetrical warfare until he admits the product met with his complete satisfaction?
Elon Musk seems to have taken that approach this week from a bad review, looks like all the big names are doing it.
heh, I had a guy once ask for a refund after using the software for almost a full year, because it did not work on his wife's phone. I said sorry , 90-days only (paypal policy) and he accepted that.
Friday, February 15, 2013
>in fact all buyers always should at least try to tread all the ToUs, EULAs, and so on
Some of my customers won't even read a 2 sentence error message that describes exactly what the problem is and what they can do about it. So good luck with that!
Friday, February 15, 2013
Well they really should read it - if I noticed George's ToS there I'd never in a million years touch any product he produced under those terms. Not to mention they violate the Uniform Commercial Code, meaning the terms are invalid in most states. Of course there invalidity is irrelevant, what's relevant is the vendor is plainly acting in bad faith regarding his goods.
I've yet to make a sale but I would refund without question. You don't want to make enemies on the web, and besides, they can (and will) do a chargeback with their credit card company, even if it's just for $4.95.
I also have an old saying that I personally made up: "The longer something is explained, the more likely it's BS." (It's actually a version of "let your yes, be yes; and no, be no"). Now look at the length of George's replies.
Agreed. There seems to be a TOS arms race to see who can have the longest TOS.
Look at how much legal analysis has been done on the meaning of each of the ten amendments in the US Bill of Rights. Each of those amendments is only a few lines of code.
Now compare to the length of TOS agreements. How much more complex it is to interpret them.
Any TOS longer than a few sentences is going to be impossible to legally interpret. So why have all that. Because the lawyers say. The same lawyers that charge $400/hr to write that TOS. That's like asking a dog if you should buy more dog food.
Just a couple of points:
1. You can make enemies on the web regardless of how you deal with customer service. Your competitors might post fake complaints for example... it need not be a customer. In addition, it depends on how unique or good your product is whether or not others will look into those complaints and decide they do not want buy it.
2. Actually the terms I provided as an example say very basic thing that if the product does not work and cannot be fixed, or if it was no delivered promptly a refund will be given. How is that different from any deal you make every day when you buy something from the store? And given that it is software and not a physical good, it only makes sense that here the terms may be even a bit stricter because once it's out - it's out.
3. An attitude "refund no matter what" really invites everyone, myself including, to buy software from vendors like that and then immediately ask for a refund saying I had a mistake or don;t like the product, and then I can secretly continue using it in many cases completely undetected. Yes, it's illegal, but what can you as the average small vendor can do about it? I guess not much; whereas had you implemented a certain policy and activation scheme, you will be protected!
4. Finally as for the customers not reading ToUs, well, I don;t think it's "good luck to vendors with that", rather it's "good luck to customers with that approach", because if they don;t read that stuff or at least understand the consequences of what it says, they are totally unprotected against any sort of possible adverse situations.
5. Oh and it's not about the longest ToU. Rather it's about properly protecting the buyer and the seller by listing all the nuances of the order process, agreement, etc. It's quite normal. Would you enter into a shady agreement with some company where little if anything is clearly stated, or would you rather enter into business with a company which clearly lists all its policies so there are no questions. I prefer the later, even though the policies themselves might not be to my liking, I at least have an idea of what they are!
George, temporary licenses enforce your refund policy. Just ask Wyatt (where is he btw?)
Dmitry Leskov @Home
Saturday, February 16, 2013
>> "Just ask Wyatt (where is he btw?)"
Working hard on an upcoming release and a major marketing overhaul.
>> "George, temporary licenses enforce your refund policy."
You don't even need temporary licenses. Just use regular licenses. If a customer wants a refund then give it to them, revoke the key, and move on.
Revoking keys is standard functionality in all well made 3rd party licensing (e.g. http://wyday.com/limelm/#revoke ). If you've built your licensing in house ... well, then you need to build the revoking functionality in-house too (or you could try LimeLM :) ).
But back on topic, there's nothing to be gained by bad mouthing a customer that didn't like your product. You're probably asking yourself, Alex, why didn't the customer just download the trial and see if they liked that before wasting your time and merchant fees on the full version? A couple of possibilities:
1. Maybe your software is cheap enough that it was an impulse buy. Try raising your prices.
2. Maybe it's not clear that your trial is a full, time-limited versions of your app.
It's hard to know what the problem is (maybe it *is* just the customer's fault, but this "customer buys instead of trying first" is a recurring theme in your posts, Alex). Post a link to your website and you might get some help.
Saturday, February 16, 2013
Yesterday I discovered that a plugin for a software i use for my hobby was on sale, -51%.
I was not sure to buy it, but had only 2 hours left before the sale end.
So I went to the live chat and talked with a rep. I asked several questions but what really made me buy it was: "the software does what you ask, buy it, you have 30 days to test it and if you don't like or it doesn't fit your needs, we will give your money back, no question asked".
10 minutes later I received the serial numbers...:-)
Now I have 29 days to test it.
For the record, returns are less than 1% of sales.
George's ranting is from a paranoid guy that imagines his customers are out to get him, so he works extra hard to thwart what he considers their devious plans.
All that happens though is honest customers get caught in the cross fire of the battle with imaginary ghosts.
The fact is that your enemies are not placing fake orders, nor are people ordering and returning to get it for free. If they want it for free, they will download the cracked version.
"If they want it for free, they will download the cracked version." - Why would someone download a potentially dangerous cracked version when he/she can get one for free from the vendor who screams "We issue refunds within 30 days for any reason!"? They would prefer to get a legitimate version and ask for a refund.
>> "But how many actually implement such deactivation [...]?"
Many, many companies both large and small.
>> "[...] especially if the software does not need Internet to run and function?!"
Well designed "online activation" does not need a continual internet connection. A connection is only needed during the actual activation. (Of course, not even then if the customer does "offline activation"). Then, optionally every N months to verify the activation (we recommend every 90 days, but it's entirely up to our customers -- other software businesses).
Plus, you can exclude end-users that initially "offline activate" from this "re-verification".
There are grace periods and other tools to make this as seamless as possible for the end-user.
Sunday, February 17, 2013
Totally agree Wyatt! But that requires manual deactivation by the customer when he/she requests a refund, otherwise the software will remain activated and can still be used. This deactivation requirement, in turn, should be included in the refund policy, so I still don't get all the fuz about "crazy" refund policies like the sample one I provided that ask customers to provide proof they removed the software prior to issuing refund. It's quite normal and should be done; otherwise how do you know they are not continuing to use your product?
First I agree with the just refund it. Have a clear refund policy but refund anyway. Written policies are for people who don't want to interact directly with people. Regarding returns either virtual on the internet or in person if someone really wants to return a product they will try regardless of the TOS.
As for who will try and get a cracked version versus buy and return to get back for free. Well a whole lot of people. I'm went back to school not to long ago and listening to other students of all ages talk about software has changed some of my thinking a little bit.
Doing any transaction that requires something to be purchased either pay pal or credit card is in itself a deterrent to someone looking to get something for free. It's even surprising to me how many people balk at just being asked for an email address before downloading. I'd guess 98% of people use fake email addresses to download a free product or trial.
There's a lot of software that have student versions free or reduced greatly in cost. But people would still get a cracked version because it's the 'full version' and the got it for free. There's a whole mentality to getting a 'free' copy that goes beyond trying to get the vendor to give it away free through a return.
George, if I ever use one of your products, it will be by accident. I do not want to have anything to do with you and products.
This does protect you from being ripped off by me, but it may be that you are missing a point about being in business.
@Gene That's absolutely your right! Though to the contrary, it is you who is missing the point, as business is a profit making enterprise, not a charity, which a lot of people here seem to advocate.
Although, I would be curious to know, what specifically in the policy I provided set you off so much - inability to fully test the software and if you don;t like it ask for a refund? Well there are lite/trial versions for that as was already mentioned. Other than that it simply says that a refund will be given if it does not work or was not delivered timely. If it works as advertised, and you did have opportunity to test trail version, why would you still want a refund? I guess to simply get it free, like a lot of people nowadays.
@George: I wonder what does your software do that you get so many refund requests? We have not got any for more than a year, 20 months to be precise, except for one case where I wished the customer has read the EULA prior to purchase. ;) (Third-party license was prohibiting their use case.)
George: Some people download a trial, install it, run it once, then Real Life gets in the way and they can't use it for another 14 days or whatever. Their trial runs out, so they buy. Then they find it's not suited to their needs. They ask for a refund. What happens next? Look:
(1) You refuse. They bitch about you on every forum they can, saying how you got ripped off. They mention it on Facebook for all their friends to see. They, in turn, might share or retweet, just to help their poor friend out. They will NEVER buy another product from you again.
(2) You refund. They love what you did and sing your praises. Someone mentions your company one day, and they recommend you highly for acting so nicely to them. Heck, they will probably buy your next product!
It's your choice.
@Dmitry Nothing special. We have different software products, and hardly get more than 1 refund request every 3 or 4 months, and we process more than 100 orders per month. So you are wrong in thinking we get many refund requests and hence have such a policy. The reason we have such a policy though is to prevent the behavior I explained multiple times. That's all.
@Harry Good points! But all that depends on the software (market, competition, marketing, pricing, etc.), hence the decision regarding a particular refund policy.
Of course if you are running a B2C product which relies heavily on social network marketing, then you may have to consider your options more carefully.
I was simply making a point that always refunding and moving on no matter what is a bit silly attitude, and it just depends on many factors, so there is no rule that fits all cases.
It seems like George is being painted as either as totally out of touch or something of a little business monster. Although I definitely see good arguments on the side of "refund anyway", George's take seems to me really not *that* wrongheaded.
After all, it's just what all retail stores do, isn't it? My Sansa Clip mp3 player ate it--totally unusable--a bit after the 1 year warranty had expired. I wrote Sansa and asked if they might see their way clear to getting me a replacement anyway. They refused, citing the expiration of the warranty. I was not pleased but they're selling those things like hotcakes anyway.
Guitar Center also has a 30 day trial period for mics and whatnot. They give you a chance to try it out and see if it will work for your musical needs. After that, that's it.
I think it is about in the zone, reasonableness-wise.
@Racky: Physical goods have cost per copy. Virtual goods, such as software, don't.
@George: As most people don't read any policies or EULAs, I do not see how having such a policy helps to *prevent* such behavior. It certainly helps to annoy and offend those few people who do ask for a refund, and it does not matter what *you* think of their behavior - if you refuse, what they will tell others is *their* story, not yours.
Have you posted your own policy above, by the way?
Racky, too bad you don't live in Australia. Here, if something dies and it's outside the warranty period, you can still usually get a replacement or repair, because goods have a "consumer guarantee" that merchants cannot override. For example, a TV is expected to last at least 5 years, so even if it comes with a 1-year warranty, and dies 2 years later, they have to fix it for free. You might need to argue to get them to do it, but if you stand firm and ignore their "warranty's over" attitude, you'll get it fixed.
Also Racky, you've just proved what I said to George about customers bitching to others about bad service. I, for one, will never buy a Sansa product now. :)
This discussion is just bound to continue :) At least I have to respond to my part.
1. Do not confuse repairs with refunds. As the policy I provided above clearly indicates, if the product cannot be "repaired" a refund will be given, and we certainly do provide free support in such cases, i.e. fix the product for free.
2. "Physical goods have cost per copy. Virtual goods, such as software, don't." Wow! That needs no comment. Learning something new every day :) But, please do tell us where you find developers that don't have to pay for their apartments, food clothing, etc. I would like to "hire" a few of them! If you don;t understand, let me just say that a cost per license would be something like [total dev cost per version (fixed)]/number of copies sold per version + variable costs (hosting, etc.)
3. The policy I provided is part of refund policy of a company I helped develop a few products for.
I stand corrected. What I meant to say is that physical goods have non-zero manufacturing, storage, shipping, etc., costs proportional to the number of units. Virtual don't.
It therefore does not make much sense to _directly_ compare physical and virtual goods in the context of _this discussion_.
Now, there are virtual goods, such as MP3s, for which allowing returns does not make sense either. There are some border cases in software too - I would not want to refund the purchase of a single/rare use product, such as a data recovery utility, on the basis that the customer "does not like" it. George, perhaps your products fall into this category?
Dmitry Leskov @Home
Wednesday, February 20, 2013
@Dmitry Exactly! Though I am of the opinion that not some but most software products do require some sort of explicit refund policy that is not as simple as "we'll refund in 30 days no matter what" - it just does not make sense in my view and I am not convinced by those arguments at all. Yes, some of the products that I am involved with certainly do fall into single/rare use category.
@George It makes more sense to me now, but I still insist it's a border case.
It is indeed psychologically difficult to justify the purchase of a $20 utility that you would use only once.
I was in a situation just like that myself, when friend's Windows 7 happily ejected a DVD-R with my vacation photos before writing the directory. I had only discovered that at home, and found a $20 or so utility the trial version of which had found the photos on the disk, but refused to save them. However, for me it was "pay $20 and get my photos now" vs "wait a few month for a common friend's visit", and I opted for the latter. (It all happened before broadband, so it would have costed us way more than $20 to send the photos over the Net.)
Back then, I thought that I would have happily paid one or two dollars for that particular single use. Maybe it would have been possible to build a business around that idea.
These days that same $20 (let's pretend for a moment that inflation is non-existent) can buy you a handful of mobile apps you could potentially use over and over, so it only became worse.
But all this does not apply to most other types of apps.
Dmitry Leskov @Home
Thursday, February 21, 2013
I give them their money back, tell them I'm sorry it didn't meet their needs, gather as much info about why they didn't like it as they are willing to provide. Then I make a "no hard feelings" gesture by allowing them to continue using the software if they wish to.
I gain nothing by being a jerk, and an upset customer will consume time and energy from me; it's cheaper just to give them their money back and move on.
That's how I learned to do it, based on 7 years of experience selling through my uISV. It's helped me turn a few highly volatile people into advocates (not always, but sometimes... which is still better than never).
Thursday, February 21, 2013
Dmitry Leskov: "I stand corrected. What I meant to say is that physical goods have non-zero manufacturing, storage, shipping, etc., costs proportional to the number of units. Virtual don't."
Oh? How are you going get the virtual goods to the customer? Could it be bandwidth proportional to the number of units?
@Gene: change your hosting provider.
Dmitry Leskov @Home
Thursday, February 21, 2013
@Darren Of course it makes sense to ask them what went wrong and what can you do to help them! You should always collect that sort of statistic. In addition, you might provide a more complete edition or develop a free fix (which will become a feature later on) to solve their problem - without issuing a refund. It has worked many times with me. And it does not contradict anything I said previously. The point is that you do not refund, but instead fix the issue by: providing a more complete version of your software (if your software comes in several editions) or suggesting an upgrade, fixing the problem or implementing a new feature for the customer (provided customer is willing to wait) that will later become part of the regular product, etc.
Having advocates is of course helpful. However, do this too often and soon you may find yourself refunding more than half of all the orders, once enough people here that you are such a nice guy and give your software for free on first request as long as they say why they are dissatisfied. You might then as well become an open source or freeware developer.
Oh, and another small point to add is that a refund generally costs you a small amount, depending on the order processor it may be around 1 or 2 USD. Yes, it's much less than a chargeback fee one might end up paying in rare cases when not refunding, but that is still something you should keep in mind.
"If all business would operate by that motto "refund and move on", they would all be bankrupt in days"
This argument is so wrong it's not worth trying to convince you that your policy is nonsensical.
Of course, it's your business. If it works for you, by all means carry on.
On the other hand, I've returned software that I bought to evaluate and didn't like (yes, I didn't *like* it.) The only reason I did this was because they stated in giant letters "try for 30 days or get your money back, no questions asked." It was a painless experience for me, and thanks to this newfangled things named computers, it was also painless for them.
My point being, I will *never* buy anything online that I'm not sure I'll be able to get a refund if I don't *like* it.
(Gee, does this topic get into you, or what?)
When I was younger, I bought a Dr Who game from a shop that looked really good on the packaging. The gameplay itself, however, was absolute rubbish. It was slow to move from level to level, laggy, and poor graphics. It was obviously just cashing in on the Dr Who name. I took it back to the shop and meekly said I didn't like it for the reasons given, and to my shock, the owner refunded me on the spot without question.
I continued giving that shop my business and recommendations for years after. (Computer Affair in Willoughby. There you go, Mario -- still pimping your store to this very day, all due to a refund over 20 years ago).
That's what you want your customers to do after a refund.
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