If you sell products either online or in a brick-and-mortar store, it’s just a matter of time before your customer knocks at your door requesting a refund. And instead of shutting that door tightly, consider using another strategy.
Denying a request for a refund isn’t that easy, especially if you care for your company’s reputation as well as customer retention. And the classic “no, we won't give you your money back” might not be the best answer.
In this post, we’ll guide you through the effective tactics to decline a money-back request and retain each customer. Your refund denial letters will sound more natural and free of cliches after reading this article. So, let’s jump right in
Why refund policy matters
Allowing customers to issue refunds is a great practice aimed to offer them a better shopping experience and a safety net. However, many people might want to game the system, and that’s where problems crop up.
To stave off refund abuse, you should have enough authority to decline money-back requests. And an incredibly detailed return and refund policy or a separate clause in your terms and conditions agreement is just what the doctor ordered. Even though none of these documents is required by law, they are your shield against dishonest consumers. By displaying the rules on the website, you’ll be able to restrict refunds legally and save your business from monetary losses.
What scenarios you should include in your refund policy
Start developing a sound refund policy by including the following scenarios:
The final sale or non-refundable items
If you need to get rid of excess stock or often returned merchandise, mark those products as a final sale. Items on sale are usually automatically non-refundable, but you'd better inform your clients about that. You can display that detail on the product page and in your return and refund policy.
Damaged goods
To keep your business safe from money losses in the long run, clearly explain to your buyers that you don’t accept damaged goods. The exception is when they are under warranty which covers the defects a customer is applying to.
Make sure to describe in detail what kind of damages aren’t subject to refund. That will be your valid reason to decline money-back requests without hurting your business image.
Perishable goods
Refunding products that have already expired is a big no-no unless you want to burn a huge hole in your store’s budget. To avoid such unfortunate situations, you should clearly state in your refund policy that you aren’t eligible to give money back when the expiration date has passed. That is also the case of a warranty date or return deadline.
Discontinued merchandise
Even if the warranty covers the damaged item, you won’t be able to replace it as it’s no longer in production. So, make sure to protect yourself from refunding discontinued goods by including the clause that makes them non-refundable. Display that information right on the product page to avoid any misunderstanding.
5 need-to-know tips to craft a sound refund policy
When working on your return and refund policy, make sure to cover all the details, even the smallest ones. You never know which nuance will cost you money. The good news is that we know, so here you go.
Tip №1: Create deadlines
If you don’t set deadlines, there is a high risk of refunding items long after the factual purchase. The reasonable deadlines are 14 to 30 days. Make your customers stick to them to avoid paying for well-used goods.
Tip №2: Specify the conditions an item must be in
We’ve already discussed that refunding damaged items is okay if a warranty covers the defects and the product isn’t discontinued. But don’t gloss over other nuances because they can cost you money. Depending on what you sell, define what other rules your clients should follow to return products.
For example, it’s a standard practice to accept items only in their original condition and unopened. You can mention that in your policy.
Tip №3: Define who will pay for return shipping
If you don’t specify who is covering shipping charges, the chances are you’ll have a long, tough talk with a disappointed customer. Whether you’re going to pay for delivery or not, provide your clients with this information.
Tip №4: Clearly state what kind of refund you offer
Imagine the situation when a client is returning a product hoping to get their money back, and you give them your store credits. They might not be thrilled with such a deal. To avoid unpleasant surprises for customers and exhausting arguments for yourself, add this information to your policy. Your clients should know whether they’ll receive money, coupons or anything else.
Tip №5: Craft a policy you’d like to experience yourself
When working on your policy, don’t go over the top. Keep it strict but reasonable. If you post a policy that denies everything and aims to prevent even the slightest effort to return the money, you’ll just put yourself in an invidious position. Imagine the customer who is already disappointed with the product, so why fuel the fire? Make your policy fair and well-thought-out leaving some space for manoeuvres and consistent enforcement.
How to say no without actually saying it
Saying no to customers isn’t a piece of cake for sure. You can do that by phone, messenger or email – the choice is yours. No matter what means of communication you pick, you should be firm and polite. Use active language in your communication. Instead of saying “Your case has been investigated” and “The refund can’t be provided”, go for “I have carefully looked into your situation” and “We can’t issue a refund according to our policy”.
Make sure to show your customer that you’ve really investigated the case. Inform them why exactly you came up with this decision. It’s easier to accept the negative outcome when the customer knows you’ve spent some time looking into their case.
You can use the following templates to decline a refund nicely and reasonably:
Hello Mr Jonson, Unfortunately, I have to refuse your request on the following grounds:
I am writing to you in regard to your recent call. We have looked into your case carefully, considering the condition of the product you want to be refunded and the deadlines specified in our refund policy.
- your item shows signs of heavy use, and we refund only products in like-new condition;
- we accept products within 14 days from the moment of purchase, and your blender was bought a month ago;
You can take a look at our refund policy by following this link: [INSERT LINK]. Sorry for any inconveniences you had. Please, let us provide you with an in-store credit at 15% off the initial value of your blender. I appreciate your understanding,
Lora from Customer Service Support
You can also dig deeper into the customer’s case and see what you can do about it to help them out. Even though you refuse the refund, you can still do something good for the person who has chosen your store. Here is an example:
Hello Elizabeth, I understand that you might be sad about this situation, but it seems to me that your chair is still fixable. I’ve found this tutorial on the official website. I hope it will be useful. Take care,
I am really sorry to inform you that we can’t exchange the product or refund it. After a careful investigation, we’ve come up to the conclusion that it was damaged while being used.
Justin from the Customer Care Department.
One last thing
The most important thing you should keep in mind when working on the refund refusal is that you’re talking to your existing customers. They’ve already bought from you, and you should do whatever it takes to retain them. Even if you can’t give them their money back, look for other solutions like discounts, money-off coupons or at least a polite answer.
Hope this article will come in handy. If you want to accept online payments from your customers fast and securely, we can help you out. Tranzzo is a reliable payment provider. We comply with the highest security standard PCI DSS level 1 and offer various payment solutions – from Apple Pay/Google Pay to recurring billing.
Get in touch with us if you need more information.
