Time To Boast About Your High Refund Rate

I learned a long time ago that if you have too small a refund rate this must mean that you are underselling your product. I’ve seen a ton of discussion on marketing forums about how online vendors, especially of digital download products, hate refunds. I can’t say that I love to know that a customer can get back their money and I cannot get back my ebook either, but it’s a cost of doing business online. Or is it?

Are there any ways that you can use your refund rate in order to make more money?

Let’s return to the idea that if your refund is too small then you must be underselling your product. This simply means that you must ‘oversell’ your products to the extent that even people who may not need your product will be convinced that they need it. The idea is akin to making a pie crust—there will be some dough left over from the trimmings to get that perfect circular shape. If you use too little dough then your circle will not be complete.

To use another analogy, the only way you can be sure that your cup is full is if it is overflowing.

It’s the same with selling online—if you are not persuasive enough then you will lose some sales that could have been in your pocket. But if you do a really good job then some people would buy who would then ask for a refund. So it turns out that it’s better to have a modestly high refund rate than to have a very low refund rate—at least that’s how the theory goes.
Now the question is how can you use this refund rate to make more sales? Well, you simply state in your marketing message that your refund rate for this product is, say 7%. What this does is that assures your prospects that you do live up to refund requests and then you can ‘boast’ that 93% of your customers find value in your product.

This makes your product exclusive to the point that you can further say that your product is not for everyone—of course those who asks for a refund were those who your product was not for.

You can build exclusivity into your product by simply stating that your product is not for everyone—which of course will be true for just about any product.
So instead of being embarrassed about your refund rate and buying into the myth that a 0% refund rate is a great thing, use your refund rate to build confidence in more prospects and make more sales.

2 Responses to “Time To Boast About Your High Refund Rate”

  1. I thought someone should let you know that the last three paragraphs were repeated. I know you’ll want to make the necessary adjustments.

    You’ve made a very interesting analogy that gives a positive view of refunds. Thanks for sharing this valuable insight.

  2. Thanks Judith for your keen eyes.

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