How do you handle refund requests in your business? One thing I’ve learned when it comes to building a business is you’re consistently growing. And, growth will come with a lot of new unexpected things.
One of them is refund requests.
This is why in today’s podcast episode, I’ve decided to give some of the tips that I’ve used when handling refund requests. And a fun fact about today’s episode, I’m going to share about the most awkward refund request I ever had.
So, if this interests you, go ahead and press PLAY on the podcast. Or, you can continue to scroll down to read more about my experience!
How to Protect Yourself From Refund Requests
This is one of the most commonly forgotten aspects of building a business. So many people get into a business without fully thinking and acting like a CEO.
You need to invest in solid terms and conditions contract on your website. I know a lot of new coaches might not have a solid T&C contract, and I understand why. Especially if you are still working with clients for free, it’s easy to ignore the importance of a contract.
When I started working with clients for free, I didn’t have contracts yet. For me at that time, it didn’t make sense to have contracts. Because I thought my business was only on social media.
But I quickly realized that this is some serious business and I needed them. When I made my first $500, that was the moment when I knew I had to invest in solid contracts.
Investing in Contracts
Every business needs to invest in contracts. I will never understand people who want to build 6 to 7 figure businesses but don’t act like a CEO.
If your target is to make $10k a month or even $5k a month, you need to stop cheaping out on essential services like this. Investing in a solid contract will help you handle refund requests like a boss.
Yes, contracts can cost you a few hundred bucks. Yes, it can even cost you a few thousand.
But it’s also one of those things that can save you thousands and even millions of dollars in the long-term. Imagine if you have made 7 figures and suddenly something goes south, you will be protected. But if someone sues you and you don’t have contracts, you will lose all of your money.
All simply because you would not spend a few hundred dollars on a solid contract.
Start Acting Like a CEO
If this is a business you want to have for a very long time, you need to have contracts in place. The most basic you need is terms and conditions.
You can easily put T&C on your website. Within those terms and conditions, you should also have your refund policy. This is important for when you are dealing with refund requests.
If you are thinking of scaling your business and start selling courses, you need to have a proper application form. A vetting process will help you to differ serious people and the ones that will probably cause you hard times.
But if you don’t have an application form, I recommend you contacting a lawyer to get custom-made contracts.
You should never take someone else’s terms and conditions that they have paid for to get for themselves. That’s copyright infringement. Make sure you avoid this rookie mistake because it’s important.
My Most Embarrassing Experience
The reason why I know this is because it was a rookie mistake that I made when I was a new coach.
So, I’m calling myself out here.
Then, I put it on my website. A few days later that person’s lawyer contacted me via email and said, “Hey, you have stolen this person’s terms and conditions. That’s copyright infringement.”
It scarred me for such a long time. That’s when I realized I needed a lawyer.
Dealing with Refund Requests
Even if you are working with 1-on-1 clients, you should have contracts to protect you from refund requests. Beyond that, it also protects you from managing expectations with your clients too. This will be something I might discuss in the next podcast episode.
For example, if you have a 4-week program, it doesn’t make sense to have a refund policy of 60 days. It’s the same with payment plans as well. This whole blog post will be about me calling out my own rookie mistake that I made when I first launched Bossgram Academy.
BGA used to be a 6-week closed program. Only a handful of students were able to get in. I had like 200-300 students at that time and I would be delivering content every week. But because I had money mindset issues, I was drip-feeding it.
I wanted to make the program as accessible as possible. So, what I did was I offered a 6-month payment plan. Now, why doesn’t this make sense?
It doesn’t make sense because, by 6 weeks, everyone has gotten all the content. By a month and a half, everyone already knows what is inside. What I realized next was after the 6 weeks, I started seeing a huge uptake in payment failures. I started getting emails from people asking to pull out their credit cards.
When I said “pull out their cards”, I meant them disputing charges with their banks. It was a ridiculous experience and affected me. I was really angry I had a handful of students who did me dirty just like that.
Payment Plans Strategy
After consuming all of my content and now know everything, they didn’t pay what they owed me. After all the hard work I had done for them, I was left with nothing. So, this taught me a lesson around how to be more strategic about my payment plans.
I started listing down how to properly handle refund requests, setting policies, and having solid T&C. I worked with my lawyer and explained how my program works. This is why you need to have strategic payment plans and solid contracts.
You need to ask yourself about your program.
- Is it being drip-fed?
- Is it an evergreen style?
- Will the person gets all of the content in one go?
- Or will you need to deliver content every week to teach them?
You need to be transparent with your lawyer about the whole curriculum. It’s so important to have these terms and conditions in place. Most importantly, make sure that your prospects re acknowledging these terms and conditions.
Understanding Terms and Conditions
It’s on them to do that due diligence and to look through the terms and conditions. It’s their responsibility to understand what they are buying into by having.
It helps to protect you as a business owner. If you do get refund requests, make sure you or your team handles your customer support carefully.
This is why we’re no longer granting people refund requests as they wish. If they feel like they deserve a refund, we have processes in place that they need to follow. There are works that they need to submit to prove they qualify for the refund.
Outsourcing Customer Support
One of the most common questions I get asked is “Who should I hire first?”
Personally for me, one of the best things I have outsourced is customer support. Yes, I still try my best to be close to my prospects. But with customer support help, everything related to refund requests and payment failures run smoothly.
It’s a lot of energy dealing with payment-related questions.
Outsourcing customer support is one of the best things you can do for your business. That’s why it’s smart to outsource it because you don’t want your negative energy to affect the transaction.
Because the other girls on my team won’t take things personally as I do. They can see things objectively. Whereas I, as the creator, I can’t do that. This is why customer support is needed in every business. It helps you see the bigger picture.
Protecting Your Content
Yes, you’ll have 95% of people who love you, rave about you, and obsessed with your work. These are amazing people.
But naturally, you will get 5% of people who are going to shit on you. These are the people who are going to call you names, disagree with your philosophy and just want to bring you down.
The truth is that even though we are so grateful for 95% of the positive people, that 5% of negative people are the ones who will end up ruining your day. They are the ones that end up affecting the way that you run your business and how you see yourself.
For our comment sections and emails, my team filters through them first. The moment they see some sort of hate or something that would negatively affect my energy, they address it. They try their best. But in the worst-case scenario, they’ll just delete it.
Understand The Difference Between Being Fair vs Being Right
Oftentimes when you’re battling people in your emails, it’s easy to think you are right all the time. You might think you what is best and you didn’t do all of that stuff.
But at the end of the day, it’s better to be fair versus being right. It’s important to realize that you don’t always have to be right when you’re dealing with refund requests. But what is important is that you’re fair. You’re fair to the customer. You’re fair to yourself and you’re fair to your team and your business.
With all the things that I mentioned to you, you also want to just have customer experience in mind. Let’s say you are in a position where you don’t want to grant the refund requests. You don’t think that it is valid. You don’t think that it is fair. You don’t think that it pertains to your terms and conditions.
Then ask yourself this question: “Are there any other alternatives where you can turn the situation around?”
So even though you are rejecting a refund request, you can still offer a solution for the customer.
For example, can you offer an extended payment plan? If you have multiple products, are you able to give them access to another product of yours? Instead versus giving them the refund versus and breaching your terms and conditions.
In a Nutshell
As you grow your business, you’re going to take a lot of data and you’re going to make your sales pages better. You’re gonna make your webinar better. You’re going to make your program better. Maybe you’ll even niche down so that you can make sure your course is for the right person.
We ended up modifying our terms and conditions where now you can’t use our refund request as a reason to not pay me. We learned from our mistakes.
I hope that it’s helpful because now as you grow, it just comes with the territory. You just have to deal with it. And again, I don’t know any successful entrepreneur who has never come across refund requests.
HERE'S THE KEY TAKEAWAYS OF THIS EPISODE:
[10:27] A rookie mistake that I made in my business related to terms and conditions.
[27.12] One case when someone wasn’t happy with BGA program and they submitted all the work.
[32:44]A story about a refund request from a person that took my program because she lost a client using our method.
[37:05] A bizarre experience when an ex-student stole my student testimonials and still asked for a refund request.
[40:09] Understanding the difference between being fair and being right.
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