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Why You Need a Money Back Guarantee

April 16, 2013 by ListGuy

If you don’t already offer one, it is important that you offer a money back guarantee for most products that you sell. The one big exception is when you customize a product for a customer. So for example, if you sell engraved mugs, you should not offer a money back guarantee unless there was a mistake on your part. However, products which are mass produced should include a money back guarantee. This is especially true for software products where you essentially lose nothing by asking the customer to delete the product (you can also deactivate their copy remotely by using a remote activation requirement). So why is a money back guarantee so important? Read on to find out.

Nobody Wants to Be Played for a Fool

The fact is that one of the biggest fears that people have today is being played for a fool. Even if there was no money involved, we don’t want to feel embarrassed that someone else was able to take advantage of our gullibility so that we would lose out while they gained at our expense. Especially when you consider that there are so many scammers online today, people tend to be more and more careful when making a purchase online. They don’t want to take any chances on the possibility that they could be tricked.

One of the best ways to allay your customer’s fears is to offer a no questions asked money back guarantee. At the bare minimum though, a guarantee where people can get their money back if the product is defective or doesn’t work as advertised is essential to keep people buying. One study estimated that you could easily double your customer base by offering a money back guarantee. The more liberal the guarantee, the more likely you are to get more customers.

But Won’t People Take Advantage of Me?

This is the great fear amongst marketers – that while they want to offer a money back guarantee to legitimate customers, they also don’t want to be played for a fool by those who would take advantage of them. This is a legitimate concern, especially when you sell things like courses or software. There are a small number of so called serial refunders who will constantly buy products and then demand a refund five minutes later. They have no intention of actually paying for it. They simply buy it so they can share it with thousands of their closest “friends” on torrent sites.

While this is a legitimate concern, most marketers who offer a money back guarantee find that the value far outweighs the costs involved. The serial refunders will likely just file a credit card chargeback complaint in order to get their money back anyway. The legitimate customers will very rarely take advantage of these kinds of guarantees though. For whatever reason, it is human nature that while most people do want to see that they have the option to ask for a refund, they very rarely actually take advantage of that option.

Bottom Line

The bottom line is that a money back guarantee is in your best interests as an Internet marketer. There are few downsides and many upsides. Again, the one exception is when it’s custom work. In these cases alone, you have a legitimate reason to refuse a money back guarantee unless the problem is your fault.

Filed Under: Blog

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