If you offer money back guarantees (like we do on our PMPro and Managed Hosting memberships), you’ll sometimes have people ask for refunds after becoming a member of your site. A small percentage of these refunds might be from people who never intended to pay at all (they were doing some kind of hit and run on your content), but most will be from people who just didn’t know what they were buying or honestly didn’t benefit from membership.

You can’t really do much about that first group of “refunders”, but you can do something about the second group.

I just ran across some great advice at WarriorForum.com for how to decrease your refund rate. Praveen Kumar says on a Warrior Forum thread:

To decrease your refund rate follow these 3 steps.

1. Provide what you offered

This is the main and important backbone of your business you really need to provide what you are over-hype talked about in your sales page.

2. Be a trusted guy

Trusting is all about building relationship with your customers though you really need to provide your real information.

3. Over Deliver

This is a new strategy. Over deliver means give something extra than what offered in the sales page

That third one in particular has me thinking. What can I “toss in” with our memberships here at PMPro to make people feel better about their purchase? The folks at Grasshopper are fond of sending home-baked cookies to their customers. I don’t know if I can pull that one off well (though Kim can bake like a beast). I’ll have to think of something.

This entry was posted by Jason Coleman in Business and tagged . Bookmark the permalink. Last updated: October 29, 2011. Titled Great Advice for Decreasing Refund Rates

I have a question in terms of refunds. Say a member chooses a 3 month plan at 14.99 (4.99 x month), and the person deletes their buddypress profile (delete not cancel membership), does that person receive an automatic proration refund? Is that up to my merchant (stripe) or does the plugin take care of that?

Thank you!

[…] If refunds are more than 10% of sales, that means there is a disconnect with our marketing and the product we are actually delivering. The product really isn’t working for a large percentage of people buying… or people just aren’t feeling like the value they are receiving is worth the price we’re charging. We might need to lower our price, but more likely we just need to make sure we aren’t over promising on our sales pages and in our marketing. For those of you struggling with high refund rates, I wrote up some tips to lower your refund rates here. […]

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