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Andy Brice
Successful Software

Doug Nebeker ("Doug")

Jonathan Matthews
Creator of DeepTrawl, CloudTrawl, and LeapDoc

Nicholas Hebb
BreezeTree Software

Bob Walsh
host, Startup Success Podcast author of The Web Startup Success Guide and Micro-ISV: From Vision To Reality

Patrick McKenzie
Bingo Card Creator

Refunds and idiocy

I offer a no questions asked money back guarantee which I always honor but sometimes I just wish people would not tell me why they want a refund, really.

I just made a price discounted sale and 10 minutes later this guy emails me to request a pretty complex feature or a refund. How insolent is that, really? I honestly don't feel like refunding him.
Or the other one who I refunded 2 weeks earlier and few days ago he came back and fell into my "product crack" honeypot page. Did he change his mind or what?
Or another one who I almost had to refund because he had no idea how to interpret DPI numbers.

It would feel awkward to add any conditions to my money back guarantee, but these stupid or insolent ones make me feel compelled to do it. Any ideas? How do you handle guarantee (if you have one)?
Zka Send private email
Monday, August 11, 2014
 
 
I don't like "no questions asked" guarantees. They attract exactly the kind of idiots you are talking about. At least we want to know why they want a refund.

Recently someone asked for refund explaining that he tested several products and decided in favor of another one (cheaper script from Codecanyon). I refunded him but explained that vendors pay fees for these refunds. This is true, FastSpring charges 3.5% or so. And I told him he shouldn't buy products just to evaluate (especially that we have fully functional online demo). Looks like he felt for his action and compensated by leaving a good review for us.

As a contrary to what almost everyone would recommend, I don't think pushing big "No questions asked money back guarantee" does good for your business. We removed any such texts from our sites and put the "60 days money-back guarantee" lower down to stop making it look like our main benefit. And guess what, there is no drop in the conversion rate, but I no longer see insane customers like the one you describe.
handzhiev Send private email
Monday, August 11, 2014
 
 
None of my competitors offer any kind of guarantee so I probably benefit if I do. Actually, the nature of the product makes it a bit risky to offer a guarantee. The product is heuristic, meaning that results cannot be guaranteed and also it's of limited use: most users only use it for a short period and then it's no longer useful. It's easy to finish your stuff and ask for a refund after that.

I want to keep the guarantee, but make it conditional. I'm not sure how to word my guarantee in a way that the guarantee still seems like a solid offer, but discourages stupid behaviour at the same time.
Zka Send private email
Monday, August 11, 2014
 
 
Slightly off topic, but I'd like to hear more about your crack honeypot.  How did you set that up?
Matt Hovey Send private email
Monday, August 11, 2014
 
 
Matt, there is currently no working crack for my software. But there is a page of my website that is not linked anywhere, therefore unaccessible without directly typing the URL. This URL is included in the sitemap.xml and submitted to Google. People searching for "MyProduct Crack" or similar queries will end up here. It's not 100% effective (not everyone will click on the honeypot link) but anyone ending up on the page was CERTAINLY looking for a crack and I can see that.
For better results, the honeypot can be hosted under several different URLs, but I wasn't willing to go that far :)
Zka Send private email
Monday, August 11, 2014
 
 
My money back guarantee requires that they email me:
1. why they were unhappy with the product
2. that they have uninstalled the software and won't use it in future.
I will then make the refund, usually on the same day.

1. Is to help me improve the product.

2. Is so that it is absolutely clear in their own mind that they are a lying scumbag if they carry on using the product. Read Ariely's "predictably irrational" book if you want to know why that us important (summary, most people are dishonest only to the extent that they can justify to themself that they aren't really being dishonest).
Andy Brice Send private email
Monday, August 11, 2014
 
 
Feedback from people asking for refunds is usually useless. Not always, just usually.

There's definitely people who abuse it. They want a free license so they buy it, then they ask for a refund. I give them the refund. Then they continue to use it, or they post their license key on a site somewhere. So, you have to have a blacklist, or machine lock everything with net checks. The invasive stuff harms my good customers, so I have a black list. The guys on the black list will sometimes come back later and try to get a copy with some elaborate story. I never tell them what I really think. I say, "Your license is not valid since you asked for a refund. If you wish to purchase it, we will get you set up with an update/customer service." Of course sometimes they'll come back with a fake name and elaborate reasons why they need a free copy or whatever.

Fortunately these are only a very small number of transactions, less than 1%. But I can tell you it's frustrating and annoying when you see it.

Also, in our experience, it's been common for the people that pull these scams to be affiliated with institutions, such as schools.
Scott Send private email
Monday, August 11, 2014
 
 
Oh and we have "no questions asked". It's the scammers who are more likely to give reasons, unsolicited. It's always some BS they spent time looking for. Like they found a spelling error on page 561 of the documentation.
Scott Send private email
Monday, August 11, 2014
 
 
By the way, I started a conversation with the "new feature or refund" guy, trying to lead him to the conclusion that his request is technically pointless. It actually is. It's gonna be interesting to see how this pans out.
Zka Send private email
Monday, August 11, 2014
 
 
What's the point of your honeypot for crack searchers? i.e. what you gain from knowing someone searched for a crack of your product?

The fact that there is no actual crack yet, I believe means that your product is not popular enough [yet] ;)
exim Send private email
Monday, August 11, 2014
 
 
>By the way, I started a conversation with the "new feature or refund" guy

You might learn something.

But if he/she is an a**hole, you are better off refunding their money and forgetting about them. You can't reason with unreasonable people.
Andy Brice Send private email
Monday, August 11, 2014
 
 
> trying to lead him to the conclusion that his request is technically pointless

It is not pointless since you have "no questions asked" policy... Why bother with this case? Just give shim a refund and forget about it.
exim Send private email
Monday, August 11, 2014
 
 
"The fact that there is no actual crack yet, I believe means that your product is not popular enough [yet]"

This common claim is absurd gibberish only said by people who don't know what they are talking about.
Scott Send private email
Monday, August 11, 2014
 
 
I had to issue 4 refunds to the same person in one day.  They'd bought  the software 5 times in one day.  The reason?  "There wasn't a feature I was looking for so I thought if I bought it again it would work correctly".  It amazes me how some people are issued with credit cards at all.
Mark Nemtsas Send private email
Monday, August 11, 2014
 
 
> It amazes me how some people are issued with credit cards at all.

Lack of good (or any) judgement fuels the entire credit industry.
Racky Send private email
Monday, August 11, 2014
 
 
I would not spend more time on the person requesting a complex feature than is required to type "Please fill in this form and we'll refund your purchase right away", attach a PDF and hit Send. (We ask a customer requesting a refund to fill in, sign and scan/email or fax to us a formal Letter of Destruction confirming that they have no copies of our product left in their possession.)

I too wrote a honeypot blog post explaining the danger of installing a cracked version, which is usually just a 10-20MB shitload of malware, whereas the actual product binaries are 80-110MB.
Dmitry Leskov Send private email
Tuesday, August 12, 2014
 
 
exim, I bother with this case because refunding this would bruise my ego. I don't care about that $15, really.

The crack honeypot helps convince people to stay away from piracy and register. At the moment piracy isn't an option, but it may change anytime. I also have a rough measurement on how many people looking for a crack are willing to pay (not many).
The product is "not popular" of course, it's a niche product. Very few people would ever need it. The crack topic would merit its own thread, honestly.

I also had my share of crazy refunders. A guy bought the software and ~1 week later he asked for a refund, because he "bought it for her elderly mother who could not use the software"... OK, refunded. Then he purchased again and instantly requested a refund because of "accidental purchase". About 1 week later he purchased for the third time "accidentally" again and forced a refund. That was comical.
Zka Send private email
Tuesday, August 12, 2014
 
 
Like Andy, I have a policy to ask for the reason when people want refunds. In general I have found it useful.

On a few occasions the reason was "Competitor product X has a better version of feature Y" so now I can go check it out and work out if it is better.

Other times I get bug reports like "I couldn't do action X with data Y". Now it's either a bug or they didn't understand the UI/manual and I give them support. I reply to their refund request to say "Sure, there is no problem doing the refund but can you give me a chance to try to fix the problem ?"

If someone is being an idiot, just refund and move on.
koan Send private email
Tuesday, August 12, 2014
 
 
We're making audio editing software and our dumbest refund request was: "The app doesn't edit text."

I don't even want to try to understand what is going on in such a brain ...
Jeremy Morassi Send private email
Tuesday, August 12, 2014
 
 
>because refunding this would bruise my ego

You will soon develop a thicker skin. ;0)

I took the first few refunds personally. Now I barely bat an eyelid.
Andy Brice Send private email
Tuesday, August 12, 2014
 
 
It does worth to add " We do not provide repeated money-backs to the same customer" to money back policy.

Once I had a customer  from Brazil who asked for refund. I issued his refund and added his license key to the black list. And 6 months later asked if he will be able to ask for another refund if he purchases software again.
MatrixFailure Send private email
Tuesday, August 12, 2014
 
 
"This common claim is absurd gibberish only said by people who don't know what they are talking about.
Scott"

Care to elaborate (provide some arguments) besides your personal opinions?
exim Send private email
Tuesday, August 12, 2014
 
 
Lets keep it civil.
Andy Brice Send private email
Wednesday, August 13, 2014
 
 
Back on the topic, today I've got an interesting one. He downloaded one of our products from crackers forum. Yesterday bought additional module for it to receive some support. The next day he is asking for refund for no reason.

I wonder what to do with him - should I tell him I know he's using pirated version and is trying to get the additional module for free? Should I tell him that I can expose his personality on internet marketing forums (he pretends to teach internet marketing)?

I know most would say "refund and move on", but when doing so don't we encourage such jerks to keep doing the same thing? It reflects back on all of us.
handzhiev Send private email
Tuesday, August 19, 2014
 
 
That does sound frustrating - but yeah, just refund and concentrate on your customers.

That idiot isn't a customer, see?




AC
Reluctantlyregistered Send private email
Tuesday, August 19, 2014
 
 
If this seriously irritates you, consider adding a "restocking fee" to your T&C so that you don't lose money on refunds.

Otherwise, just think of the damage those people are doing to their karma, and then don't spend your time and energy on making their lives worse. Spend them on making your paying customers' lives better.
Dmitry Leskov Send private email
Tuesday, August 19, 2014
 
 

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