How to handle a refund request

Posted On 14/9/2022

Refunds are no fun. You get that email, or a call, or worse yet, a public shout out on twitter or facebook that reads, “I’d like a refund.” Those four words can send any small business or solopreneur into a tailspin of self-doubt. But it doesn’t have to be this way.

Here’s how to handle a refund request and use it to boost your business, make a better product and not let “I’d like a refund” get you down.

Take Action…Fast

The refund request has come in. The first thing you want to do is immediately acknowledge the request. Even if you need to figure out how to give a refund, don’t wait until you do, email or call your customer right away. Let them know you heard them, you care about them and you want to make things right for them.

Fast action doesn’t necessarily mean jumping on that “refund” button and leaving it at that. Instead, get a conversation going, this is where the power of a refund is super.

Offer free shipping on returns

A recent study conducted in 11 European countries with more than 5,000 respondents shows that 53% of consumers won’t even consider buying online unless returns are free, so it can be a huge sales block to potential customers.

Often shoppers who process regular refunds can actually be your best customers and the ones spending the most money. Our study shows that customers buying the most expensive items actually have a 50% return rate. And it makes sense that if a customer has confidence in your returns policy they would be inclined to shop more frequently and spend more money, all safe in the knowledge that they can easily get their money back should they need to.

If you are already offering free returns then don’t forget to shout about it.

Get feedback

When you email or call to let them know you are working on their request, now is the time to ask questions and get feedback. Use this horrible, no-good feeling of a refund as a way to do some serious target market research. After all, this person found your store, liked what they saw in your store and purchased!

Ask open ended questions. For example “While I work on your refund, can you share a bit more on why you are unhappy with our product? Any and all feedback would be greatly appreciated so that we can make this the best possible product for our customers.”

31% of the people returning products do so because they didn’t understand how to use it or even what it really was, before they bought. In this case it wasn’t the product that failed it was your marketing. Asking questions like the one above can really help you in making sure your marketing is on point.

No questions asked

There is a very big distinction between asking for feedback and questioning why someone is returning.

Asking for feedback is coming from a place of wanting to make your goods the best it can be and actually letting that customer have a say and share their story. There is a lot to be learned from listening and really wanting this feedback.

Questioning a customer, on the other hand, comes off as a lack of trust, a confrontation and does nothing for maintaining a good reputation or relationship and it can turn really bad, really fast, especially in the world of social media.

It’s good to have refund policies stated clearly on your site or receipt. But also treat each request on a case by case basis. You can sense if a customer is disgruntled and if they just missed that 30 day refund period, let them have a break. After all, you are the boss.

Finishing up nicely

As you are having the above dialogue, issue that refund. Let the customer know that you have processed it and when they can expect to see the money back in their account. It can take anywhere from immediately to 5 or 7 days sometimes for money to be transferred. 29% of customers say that if they are not given a precise date for their refund they will automatically assume that it will be done immediately and feel disappointed if it ends up taking more time.

Maintaining a good relationship

There have been plenty of times where a customer who returns one product goes back and buys another. Good customer service can make even an at-one-time disgruntled customer or client, a fan for life.

Remember, you are not just selling a product or service but mostly you are creating relationships. Handle a refund with class and come from a place of wanting to know their experience so that you can make a better product and you’ll soon realise that a refund can be a little pot of gold for your company’s growth!