How to Deal with Serial Refunders

How do you deal with serial refunders? I know it’s hurtful, it’s painful and I know it’s insulting.

So I’m gonna show you how you can deal with serial refunders and other negative people.

A couple of days go I received an email from a subscriber who feels like he wants to quit because their refund rate is higher than he expected.

He said that it feels  soul-destroying and he doesn’t think its fair.

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And now he is unsure if wants to continue on the entrepreneurial path as a result.

Listen, I’ve been there too and I know what it feels like when you help someone out, you give them your time, and it feels like they are just taking advantage of your good nature when they ask for a refund.

I know how soul-destroying that feels, and I know how unfair that can be.

But refunds are just part of the business.

And we have to accept them, we see them as an opportunity to learn.

I’m going to walk you through some of what I’ve learned in the last ten years, since I started selling digital products.

Refunds are a Sign of Success

First of all refunds are a sign of success.

It’s a sign that people are buying your stuff.

But f you are adamant that you do not want to issue refunds (which I strongly advise against) you can fight them by showing evidence that your product has been downloaded.

However it’s going to be up to your payment processor to decide if they take your side or if they side with the buyer.

Personally, I would advise against going down that road.

If you offer a guarantee on your sales page then you will increase your conversion rate.

Of course a small number of the people who buy from you will do so with the intention of stealing the product.

Refunds are an Opportunity

I think its best to just accept that it’s a cost of doing business, and I also think you need to actually feel the pain of issuing refunds – at least for a little while.

When you feel the pain of refunding you have an opportunity use that pain to improve your product.

Once you feel completely happy with your product, and you’ve experienced the pain and used it to improve your offer its smart to have a system in place to deal with the refunds, for the longterm.

But why do people refund from us in the first place?

Why do People ask for Refunds?

Thankfully only a small percentage will refund, and an even smaller percentage of those are serial refunders.

Basically most people are honest.

Most people are happy to buy something of value at a reasonable price, and be happy that the deal is done.

But of course there is a small percentage that won’t be happy with that.

  • They’re not be happy with the product
  • It might not match their needs
  • They might feel like they’ve been oversold
  • Or you’ve under-delivered
  • They could be suffering from buyer’s remorse
  • Or they’re just being a dick

When it comes to refunds by industry, digital marketing and weight loss products seem to have the highest refund rates.

And that might be because people’s expectations are too high.

Usually that is our fault. Sometimes we hype things and set unrealistic exceptions.

You’ve seen those outlandish claims and promises, right?

So of course customers are gonna refund if they feel like they’ve been lied to. So they’re perfectly within their right, and I completely support refunds in those kind of instances.

But it is going to have to be your decision, if you decide to issue a refund and then decide if the request is legitimate or not.

Two Types of Refunder

Most people will have a legitimate issue.

But some people will just want to steal from you, consume your time and take your energy.

I’m going to show you how to deal with those negative people in a second, but you have to make a decision about what type of refunder you’re dealing with.

Remain Professional

Remember to be professional in you dealings with them at all times.

Acknowledge the request, and then respond after it’s been processed.

Ask how it the Product could be Improved

If you think they have a legitimate gripe, then ask how the product could be improved.

This will help you find flaws, and give you the opportunity to make a better product.

If you don’t think it’s legitimate, then have a system in place to deal with those people.

Remove Serial Refunders from the Sales Funnel

Take immediate action to remove serial refunders from your entire sales funnel.

That means removing them from your email list, and any other way that they might receive sales messages.

An effective method is to block them from making future purchases.

Industry Block Lists

Before 2011 block lists did not exist.

Block lists prevent serial refunders from purchasing any vendor on their network, using the same block list.

There are of course ways to game the system but it’s a good deterrent and it puts a lot of people off because they know that they will be blacklisted and prevented from buying products from other people who use the same block list.

You’ve Dodged a Bullet

A positive way to look at refunders it to remind yourself that you’ve probably dodged a bullet.

If someone asks for a refund remind yourself that you’re effectively paying them to go away.

Remember that you only have a responsibility only to paying customers, not to the refunders.

So once you’ve issued the refund, they’ve been removed from your funnel, cease contact with them forget about them and move on.

I like to see it like a weight has been lifted that allows you to focus more on the people who do matter – the ones that value you content, your time and value your knowledge.

Use refunds as an excuse to give extra value to your existing customers.

It’s a way to turn that negative energy into something positive for your customer base.

I’m going to call it a day, if you’ve found this useful share it with your network.

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