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Shareware Author Tips - Dealing with Refunds
(this article is part of a series)
If you sell a couple thousand copies of your product - it's inevitable someone is going to want their money back at some point.
The request may catch you off guard, or you may see it coming. Often the request comes from someone who asked a series of confused-sounding questions via email either prior to purchasing, or shortly after it.
I'd estimate about 20% of refund requests come from people who don't understand the concept of a spam blocker application. Even with the free 21-day trial, they proceeded directly to the purchase page, put their credit card number in - thinking their spam would go away. If anyone knows how to engineer that product - let me know!
Refunds are a real bummer. Usually the software author gets stuck paying transaction fees, and has certainly lost any time spent supporting the customer. That is to say it might cost $34 to refund a $30 product.
The good news is that you have a number of options to both minimize the number of refunds you end up issuing, and the pain involved with deciding when to issue a refund. If you "spin" things right, you might even increase your sales in the process.
In the early days SpamButcher didn't have any official policy regarding refunds.
"I bought SpamButcher 8 months ago, but I found another anti-spam utility that works better for me. Please give me my money back."
"SpamButcher doesn't work with my new AOL account (which SpamButcher doesn't support). Please either tell me how to get it working - or refund my money. "
Once or twice I issued refunds to cases like the above. Then it occurred to me - almost no other businesses have open-ended refund policies. Why should an independent software vendor?
A 30-day refund period seemed like a fair limit. For that matter, those 30-days are in addition to a 21-day free trial period.
With software that includes a trial period, I think a good case can be made for just about any policy including "we don't do refunds." If you publish your policy on your purchase page - you'll be in a much better position to avoid getting into arguments over it.
"30-day Money Back Guarantee"
So, I've put a time limit on the period for which refunds can be obtained - and it's now a selling point!
Users can purchase with confidence, and I don't have to spend a lot of time asking myself if a refund is warranted in a particular situation. If it's been under 30-days, and they are willing to stop using the product - they get their money back.
Dealing with would-be freeloaders...
I would like to think it's rare - but certainly a number of refund requests are not "wholesome." A few people hope to recoup their money - but still use the application. A relatively simple process has allowed me to almost entirely eliminated this concern.
When a user asks for their money back, they need to perform an easy task that permanently disables SpamButcher on their computer first. When the user disables the product - they are issued a "refund code" - which they need to send via email in order to get their refund.
Like any other refund process requires, they in effect need to "return" SpamButcher electronically to get their money back. I won't mention numbers - but not all refund requesters opt to proceed with this process once they realize they can't have their cake and eat it.