Thursday, April 19, 2018

Rethinking My Money Back Guarantee

Since day one, I've had a simple money-back guarantee. I want my customers to be happy. I want them to come back again and again.

But now I need to put some limits on that, and I need your feedback.

My no-questions-asked guarantee was based on two things:

1) I always try to give more value than the cost of the product/service.

2) I assume buyers are good, honest people who are sincerely trying to improve their businesses.

I also try to make sure that people don't feel ripped off when I release a new product. When I release a new edition of a book, I give the new edition to people for free if they bought the old edition within the last several months. In other words, I do business the way I would want to be treated.

Every once in awhile, someone will contact me and say that a product is too simple or too advanced for them. Generally, these folks have purchased a book or a class. And of course I am happy to refund their money.

But on rare occasions I have someone who just plain wants to rip me off. This normally takes a simple form: They buy a huge bundle, log on, download everything, and immediately ask for a refund. This all takes place within an hour and involves over 1,000 pages of downloads.

In my opinion, these people are just plain thieves. They clearly see value in the products but have not had the time to evaluate or implement anything.

Recently, I had someone request a refund after five months. They took two classes, downloaded thousands of pages of downloads, and then waited five months and asked for their money back. This is probably someone who is failing at their business and has not implemented any advice. So the good news (if there is any) is that they are not able to get value from the materials. In that sense, a refund is legitimate, if not timely.

This is particularly irritating for me because I've already paid taxes on this sale from last year.

You may have heard that LL Bean had to rethink their return policy because people abused it. Well, in the last year I have felt very abused. I don't think my products have gone down hill. But abusive returns have certainly gone up.

What Do You Think?

I really want to be fair. But what's fair? I don't want to create a complicated set of rules. I really do want to allow refunds where people simply don't find value in my products. But I have been ripped off several times in the last month - to the tune of several thousand dollars.

Maybe I should feel grateful that my material is worth stealing. :-)

Here are some things I am considering:

1) All returns must be within _____30_____ days of purchase.

2) Physical books must be returned in good, resellable condition. Buyer pays for return shipping.

3) Once the downloadable content of a product has been downloaded, the merchandise is not returnable.

4) Online classes are refundable until the last day of class.

As always, I appreciate your feedback.

Thank you for your support!



  1. When my father was a boy, my grandmother gave him money for a haircut. He and his friend, who had also been given money for a haircut, went to the movies with the money instead. They then headed off to the barber, reasoning that if they got their haircuts, the barber couldn't take the haircuts back again when they couldn't pay. Well, my Dad's friend was still in the barber's chair when the barber discovered the boys had no money. The barber ran his clippers up and over the friend's head, shaving a stripe of bald spot from front to back. My Dad's friend then had to explain this stripe of baldness to his parents, telephones rang between parents, and the jig was up for both of them.

    Some of your products, being either intangible or at least easily copied and retained after purchase, are really returnable. People won't forget what they learned. On the other hand, the buyer is also at some small risk - when you buy an intangible or non-refundable product you are always taking a chance you won't get what you expected. You could get a bad haircut with no recourse if you pay in advance.

    I think in the end, you likely have to adjust your prices to allow for pilferage and shady customers, like we all do when it comes to bad debt. Presumably you've already done that, but if the problems are increasing faster than your revenues, you might fine tune your sales and return processes to minimize it, or need to increase your prices to pay for the losses.

  2. Anonymous7:03 AM

    Karl, I think you have to weight the value your guarantee policy brings to your products and the cost of these few outliers vs taking that value away. In other words, do 100 people choose to purchase your product/service because they see a minimal risk with the offered guarantee? And is the profit margin for your product/service appropriate so that the cost of the 5 outliers who return it (for whatever reason) basically cost you nothing because the others have paid for it?

    I buy many products on Costco because my confidence is boosted that if I have made a bad choice they will give me a refund, and that is the way they choose to do business. I am sure they have made enough off my "experiments" (and continued repurchasing of some of those items) to cover the statistical "rip-offs"

  3. Thanks for the comments! David - it makes me a little sad that honest people have to pay more because dishonest people take advantage. But that's probably just a reality I have to live with.

    Anon - I will still have a very good guarantee. But when someone suddenly can't make their rent, I don't want them to be able to turn to me and ask for a refund on a purchase they made a year ago and probably never implemented. :-)

  4. Anonymous5:54 AM

    I think the changes you are considering are reasonable and fair Karl. You have plenty of resources available for free (free downloads, your videos, your blog posts, and so on) that people have plenty of chances to understand your thought processes, what you are promoting, teaching, etc., to know ahead of time whether they will get anything useful out of your courses or materials. I've always found your stuff very, very reasonably priced for the value you offer. Sadly, too many in our current culture would rather blame someone else on their failures than blame themselves and have someone else do it for them instead of putting in their own hard work.

  5. Thanks, Anon. I appreciate the feedback and positive comments.


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