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Thread: refund policy

  1. #1
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    refund policy

    I have a problem with a client asking refund for a script product that he purchased and that he later changed his mind about using it. in our order page we clearly say that we do not accept refunds, but he warned me he will call his credit card company and ask for refund.

    I would like to know what is the best way to solve this issue, does a product licence covers these demands not based on product features, but simply on changing his mind? should I reject or approvide the refund with the risk of having to respond to legal actions?

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    In theory if the product was not faulty, he has no grounds for a refund, not unless you have some kind of money back guarantee. You'd hope that the credit card company see it the same way, but it depends on the reason he gives them for the chargeback - if he lies and says he never received the product or it didn't fit the description on your site, you may find yourself on the end of a chargeback.

    The best way to solve the issue is to try reasoning with the customer. If there's no reasoning with him and he's insistant that he's entitled to a refund just because he changed his mind, keep all evidence (emails, transaction receipts, IP address, delivery signatures for tangible goods etc, etc) and try to fight your case should the chargeback come through. I guess it depends on the amount of money being talked about.

    I'd also keep an eye on his site to see if he's using your script on it.

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    SitePoint Wizard LiquidReflex's Avatar
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    I've run across this with a couple people purchasing my script. Besides your return policy you'll also want to factor in a couple other things:

    Is your script encrypted? Do you have a licensing system built into it? Basically, if you do give them a refund, would they still be able to use your script? If they can, then I would have a hard time providing a refund as who is to say they're not just going to use it anyway or re-sell it without even paying for it to begin with?

    You say that they changed their mind ... did they say why they changed their minds? Was there a problem with the script? How long did they have it before asking for a refund?

    If you do have the ability to "turn off" the script and it hasn't been very long that they've had the script, I would probably avoid the chargeback possibility and provide the refund. If not only for the chargeback, but for buisness appearance. You don't want to come off looking like a business that just wants your money, basically one that thinks: "I have your money, I don't care anymore".

    However, if they waiting a month or you can't turn it off (and they can use it freely after the refund) I would definitely save all communication, reference your website return policy and hopefully the chargeback will be found in your favor ... unfortunately that's the danger of selling scripts online.
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    Non-Member demosfen's Avatar
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    Somebody on this forum previously suggested this. Assuming you have his mailing address, burn a CD and send him the script via certified mail, signiture required. That way if there is a chargeback, you'll have proof of delivery.

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    If your experience is anything like mine, you'll get a letter from the credit card company telling you that the customer has applied for a chargeback. They'll also tell you that unless you have a signed sales slip, there's no point trying to query or defend it, just accept it. IMO it's terribly unfair on the honest sellers out there, but I don't know what to do about it.

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    Quote Originally Posted by demosfen
    Somebody on this forum previously suggested this. Assuming you have his mailing address, burn a CD and send him the script via certified mail, signiture required. That way if there is a chargeback, you'll have proof of delivery.
    And the buyer can just claim that the script didn't deliver on what it promised to and still win the chargeback.

    Refunds are a fact of life in the online world, easier to refund people than to eat chargeback fees most times.

  7. #7
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    One thing I've learned through years of doing business online is that you can save yourself a lot of headache by adopting a lenient refund policy and pricing the loss of revenues into your products or services. Sometimes it's hard to give into a demand when you know that you're being taken advantage of, but that's just the price of dealing with a lot of different people whom you've never met.

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    Life is short. Be happy today! silver trophybronze trophy Sagewing's Avatar
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    I agree. I offer a 100% guarantee to my clients and it's worth it. Easier to stand by my work then to bicker with unsatisfied clients.
    The fewer our wants, the nearer we resemble the gods. Socrates

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  9. #9
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    I finally refunded: the script was 50$. We clearly state no refund policy on our site, client simply had no valid reason, he was just so stupid he was not aware what he purchased, even if I can not see how this could happen. I had few clients asking for refunds, but this was because their server was not fit for my products. I accepted this reason, even if we offer free demos and they could test. But this guy was not the case.

    I also decided to ask clients to download and install demo first and removed the order link from my site. I will ask each client particulary if he installed demo and is happy with it and also will let him know via individual email that we do not offer refunds.

    It appears to me that most clients push the order button without even reading the terms and conditions and the licence of the product. Indeed higher prices I think is the best solution. I would rather go for the no refund/lower price/no support option but it simply appears impossible in todays web.

    I know a site that sells 5$ scripts and offers no support, which is probably the best solution considering the headache you get from clients in the scripts business. But I simply can not go so far as to sell scripts that I work hard and put a lot of effort into them to sell for 5$.

  10. #10
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    Quote Originally Posted by roger21
    I also decided to ask clients to download and install demo first and removed the order link from my site. I will ask each client particulary if he installed demo and is happy with it and also will let him know via individual email that we do not offer refunds.
    Tempting as this may seem, I'd advise against this. Never punish the many for the sake of the few - it may seem like every customer is a potential fraudster, but this isn't the case. How many orders have you had, and how many were fraudulant?

    By making it so ridiculously difficult to order your products, you'll lose a massive proportion of sales. The golden rule of ecommerce is to make it easy as possible for the customer to buy, not remove all purchasing functionality because you lost out on 1 chargeback! How many people do you think will be bothered to email you and wait around for you to get back to them with ordering details?

    Put it in perspective - how much did that refund cost you - it's a digital product, no stock, no shipping costs - your only loss were card charges and time - sure there's the idea that someone got away with your product for free (although he's probably telling the truth in that he cannot use it). I'm not being blasse here as I have several sites selling digital products and unfortunately this kind of thing happens every so often - but it really doesn't happen that often for it to be considered a major problem, not when you look at thr massive benefits of selling digital products over tangible goods.


    It appears to me that most clients push the order button without even reading the terms and conditions and the licence of the product.
    You bet - put a tracking script on your terms to see how many of your customers read it. I find on my sites, it's less than 2%, on my forum, it's less than 1%. You could put a script on your terms/license page that flags your orders table in the database to prove that the customer really did read that page (well, it would prove whether they opened the link or not) - if they don't read it, refuse to let them proceed (I believe the forum software Vanilla has a similar system).

    I know a site that sells 5$ scripts and offers no support, which is probably the best solution considering the headache you get from clients in the scripts business. But I simply can not go so far as to sell scripts that I work hard and put a lot of effort into them to sell for 5$.
    To be honest if you are only wanting to sell for $5, I think the best solution is to not sell software at all - give it away for free, build a community around the script and then you have a nice big community to advertise other services and products to (e.g. books, development services etc) or just sell ad space. It's much easier to promote free scripts (especially good ones - people will promote them for you in blogs and forums). Say for example, you wrote a book about Dreamweaver - you could bet a large % of the people visiting your free script site would be interested in that book. Sell the book - much less hassle. Plus with a good open source script, people will be begging to contribute to the project, making plugins, skins, add-ons, extensions, etc - it wont be long before you've got a tastey project on your hands and you're getting some good, targeted traffic to sell other products to.

  11. #11
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    Quote Originally Posted by shadowbox
    Tempting as this may seem, I'd advise against this. Never punish the many for the sake of the few - it may seem like every customer is a potential fraudster, but this isn't the case. How many orders have you had, and how many were fraudulant?
    I'd agree with this - I sell a subscription-based service and had thought of making all new subscriptions one month instead of twelve, then those that didn't want a refund could continue downloading, and those that did would at least be unable to use the software after the first month. But in the end I considered that this would just put people off so much that we'd be better off just taking the loss from time to time.


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