Money back guarantees

[Tom]

I've just written a post about money-back guarantees on my blog.

Does anyone have any experience of these, in relation to selling products online? I'm considering offering one on my latest AIS, but am wondering whether it's a good promotional tool or a dangerous thing to offer - i.e. what's to stop everyone asking for one?

Would be interested to hear your thoughts.

Cheers

Tom

[Aitch]

Originally posted by Tom@Mar 28 2006, 03:28 AM
I've just written a post about money-back guarantees on my blog.

Does anyone have any experience of these, in relation to selling products online?Â* I'm considering offering one on my latest AIS, but am wondering whether it's a good promotional tool or a dangerous thing to offer - i.e. what's to stop everyone asking for one?

Would be interested to hear your thoughts.

Cheers

Tom

[snapback]603[/snapback]

Should be interesting Tom. I hope you get some feedback on this one.

Aitch

I think its good to offer. As seller you must be 100% behind the quality of your product. Buyers will think that it will be a top product because only idiots would over money back on sucky products. And as i understand from this post you cant't make much losses out of it. I would say go for it!

ps. cool name btw :P

[Yaro]

Definitely go for it - it's been statistically proven to work as a selling/copywriting rule and generally has little to no impact on returns. Those people who would return your product would do so anyway regardless of the guarantee or not.

Just make sure your product is good and the intended audience is finding it.

[Chris H]

Tom, I don't think you have any option on this, go for it!

It's too big a selling plus not to have.

[burty]

I have never given a refund, and I have never offered a money back guarantee on my downloadable products. It's pointless and fruitless for run of the mill downloadable products.

You would be better off to create a "time limited" or "limited functionality" product and give away for free, than to offer a money-back on a full product.

Anyone who says otherwise has either;

1. No experience in selling virtual products
or
2. Are inundated with "money back" requests

With respect to #2, this is something you need to take into consideration when buying products from those awful long sales pages. Sure the seller might have made $20000 overnight, but how much of that went back to the buyers?

No, I will never again offer a money-back guarantee on any of my products. If the buyer does not like that, then "buy elsewhere".

I once made the mistake of offering a 50% money-back thing after 3 months *if the purchaser could not see any value in AIS*. One person claimed the refund, and guess what...he is still running AIS and making a success of it. That is the sort of person you need to avoid.

[Aitch]

Originally posted by burty@Mar 28 2006, 09:06 PM
I have never given a refund, and I have never offered a money back guarantee on my downloadable products.Â* It's pointless and fruitless for run of the mill downloadable products.

You make some good points Burty but there does seem to be an increase on money back purchases should the buyer not be satisfied with the product within say a 30 day period.

I'm just guessing here, but it seems like this ‘Money back guarantee’ is being tried, tested, and shared somewhere due to the increase in its use.

You would be better off to create a "time limited" or "limited functionality" product and give away for free, than to offer a money-back on a full product.

And there are a lot of offers using the above methods too which I personally prefer to see.

Even some of these free products have a 'Make a Donation' link build in and many also have the options of the paid version visible, but when clicked, the user is informed that the requested function is available in the full product only with an accompanying link explaining the benefits of upgrading.

All I know is that I don’t know, but some 'real' stats or a few shared experiences would make for an interesting read.

Aitch

[Tom]

Thanks everyone for your responses.

Interesting to hear the differing viewpoints which have come out of this.

While I can see Gary's point about people who are not happy "buying elsewhere", I do feel that someone like myself who is just starting out in this game needs to give himself every opportunity to turn a website viewer into a 'customer' - and offering a money-back guarantee might be the way to do this. Yaro is right in saying that it's a well known marketing tool - you see it all over the place.

Having said that, you don't want to be attracting the wrong type of customer (i.e. someone who will ask for a refund, regardless of their real thoughts).

Furthermore, the thing I'm intending to sell isn't exactly a tangible "it didn't work" type of product (like the claims someone made about Gary's ready-made AIS site) so I'm not exactly sure on what basis a customer could be 'unsatisfied', if you see what I mean. That probably doesn't make much sense but it will be more obvious once the site is online.

I'll keep thinking and let you know if I make a decision

[Blaine Moore]

I wound tend to say go for it, but the real answer is to split test it.

Try writing copy that makes the 100% guarentee and copy that does not. See which does better, and how many refunds you get requested for from each one.

In general (but not always) I would say it is a good idea because most people are too lazy to ask for a refund, especially if you can get them to consume your product through post-sale autoresponders and such. If they open the box, they are that much more likely to keep the product.

I would also put a limit on how long you will refund for. Give them 30 - 60 days to request the refund, and keep them busy by pointing out different features and advantages of your product during that time so that they will be less inclined to ask for a refund and more inclined to purchase another product from you in the future.

[Yaro]

Spot on Blaine - split test is the only answer. Even if people chime in with stories of a gaurantee working really well or really bad it doesn't matter because the results are going to be unique for your product. Test it, if it improves conversions keep it, if it doesn't don't.