In this episode, we are going to deal with the icky topic of what to do when someone says, “give me back my money!” When you get refund requests from customers or people wanting to drop out of your coaching packages – How do you handle it? What do you do? Have you completely failed?
No you haven’t.
We’re going to deal with all of this in today’s episode.
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Ugh, I can already feel your discomfort right now.
It is so “ick” – that feeling, even just the fear of having it happen. Someone’s asking for a refund or wanting to drop out of working with you, or they don’t feel like they got value and are telling you it was horrible. And they demand they get their money back.
Oh my goodness, it is so icky.
Now for all of you tappers out there, feel free to do some EFT as you’re following along to this if any of those feelings are coming up for you!
I totally understand as an entrepreneur and business owner, especially for those of us who have personal brands where we put our heart and soul into our business – having someone say something wasn’t good enough or they don’t want that anymore – It can feel like they’re saying you as a person are not good enough, or that you as a person have failed.
There’s a lot of emotion tied up in someone not wanting to work with you anymore, or them wanting their money back. So I want us to take an objective step back for a moment.
I’ve got three things you can do when it happens.
But first let’s take that objective step back, and think about our own experiences. Not only as the seller, but also as a buyer, because we can have both good and bad experiences with refunds and people dropping out as both the seller and as the buyer, and I have plenty of examples of these.
I was working with a VIP mentor once and after a couple of sessions together, I started to feel like we weren’t a great match. One of the key reasons was that the business and marketing strategies that they were trying to get me to use didn’t really feel like they were aligned with my values. And I also felt like I got very overloaded in the first couple of weeks and then kind of left high and dry for a little while.
So I reached out to that person and expressed how I was feeling, with the intention of us having a conversation and working out how we could continue working together, but in a way that was better suited to my needs.
I instantly received back an email that basically blamed me and told me that it was all my mindset that was the problem, and gave me a list of all the reasons why the provider was doing the right thing, and suggesting that it was me as the client who was doing all the wrong things.
Wow, this left such a bad taste in my mouth!
I truly didn’t know how I was going to continue working with that person, after the way they had reacted to my initial inquiries about maybe adjusting the way that we work together.
It became a really interesting experience for me as a buyer, to experience the backlash while not even asking for a refund, but just looking to pivot the way that we were working together.
I’ve also had times where I tried to get a refund from a course or program because what was on the inside did not match what was advertised, and I had to jump through a bunch of hoops to access that refund – it felt really gross.
In one course I did, the promotional webinars and sales page showed a “30-day, no questions asked, money back guarantee.”
I had felt very safe in buying that because I knew that I could jump in, give it a go, see what it was like, and decide whether it was actually the right fit for me.
But “silly me,” I didn’t read the “terms and conditions” when I purchased that course. I will never make that mistake again. Nowadays, I always read the Terms and Conditions very specifically when I buy courses!
So I jumped into that program, but sent an email just five days after joining and said, ‘Actually, I would like to access the 30-day, no questions, Money Back Guarantee.’ I did this because after watching the first two modules, I could see it wasn’t in alignment with the way I wanted to grow and market my business.
Some of the strategies being taught felt pushy and aggressive to me. And I didn’t want to engage in that way. The strategies weren’t what I was expecting. I didn’t feel like what was promised in the promotion matched the quality of the program on the inside. In particular, there had been the promise of lots of connection, but when I got inside the program, the calls weren’t run as Q&A calls, they were run as teaching calls, so you couldn’t even ask questions. It was just not the way I like to learn. But I didn’t say all of that in my email – I just said it didn’t feel like a good fit.
So when I sent through my refund request, I got a canned response that said, “this is a digital product and there are no refunds.”
I emailed back and said, “well, actually on the webinar, there was a promise of a 30-day, no questions asked, money back guarantee. So I’d like to access that refund, please.”
I then got another email back saying that I needed to read the terms and conditions of the course, and there was a link to a PDF.
And in the terms and conditions, it said you get access to a 30-day refund so long as you do the work. And “doing the work” involved completing at least five modules, and investing at least $500 in Facebook ads using the strategies that were taught.
So what they required for me to get the refund was to actually take a screenshot of my Facebook ads account to show that I had spent $500 on Facebook ads. But I had never run Facebook ads up until that point, and didn’t have the evidence to provide to get that refund!
Now, through a lot of back and forth emails, I eventually was able to get a 50% refund on the program. But I would never recommend that program to anyone, nor will I ever follow that person again, and it has left a really bad taste in my mouth. So as a buyer, I know what it’s like to ask for a refund and then be forced to jump through hoops or be told that it’s my fault.
Another example that’s not with an online business was when I bought one of those NutriBullet things. On the box it said it was dishwasher safe on the top shelf.
At the time, I was getting into smoothies, so I totally fell in love with it. One day I popped the two cups into the top shelf of the dishwasher as instructed, but when the dishwasher was finished, both of my cups had melted and completely deformed.
I got in contact with the company and checked the instruction manual, checked on the box, checked everywhere that said it’s completely dishwasher safe as long as it’s on the top shelf and that is exactly what I did.
When I called the customer service line, I had to speak to three different people and all three of those people accused me of putting it in the wrong spot in the dishwasher. I had to tell them, “I can assure you, it was definitely on the top shelf, and it has melted.”
Then they tried to get me to give them my dishwasher model and all sorts of things. They just kept saying it was my fault, and acting like I’d done something wrong.
They made me wait for the regional manager to give me a call, and she said, “well actually it’s not guaranteed dishwasher safe. If you read the instructions, it says it’s better to hand-wash but you can put them on the top shelf of the dishwasher.” And I told her that I had put it on the top shelf of the dishwasher.
It can become this crazy space when I’m asking for refunds of being like a dog with a bone – feeling like it would have been easier for me to just purchase a completely new machine with all the new cups for $125, but it’s the principle of the thing, right?
I’ve done consumer law as part of my degree, and I’m into a lot of psychology and Consumer Affairs sorts of things, so I’m very clear on my rights.
And I just imagine all of the other people who aren’t clear on their rights, who just take it as they’re told, and accept it as fine. They just take the blame and walk away. So I feel like my little win is a win for everyone.
Because I know what it feels like to be a buyer, when I am acting as a seller I want to make sure that I provide a really amazing experience for people, even when they are asking for a refund.
I find that the energetic and emotional feelings I have about refunds are way more manageable than many other people who may be still feeling scared about them.
As a seller, I’ve had good and bad experiences in giving refunds.
When I have been deeply invested in that person staying or their person’s business results, or I’ve crossed a boundary into the real trouble of needing them to be successful because I’ve attached it to my identity or my value, then that’s when I have tricky experiences with refund requests.
But when I have that clear boundary that this person’s business, or them staying or not staying with me, actually doesn’t reflect upon who I am as a person. It doesn’t impact my value, or my worth as a human being, and that boundary really helps me to experience refunds in a positive way.
So here are my three tips for when people ask for their money back or inquire about dropping work with you as a client.
1. Keep it classy
We each have so many horror stories! And people are more willing to share the horror stories than the positive stories.
If I have a refund experience that is really positive, I am conscious of sharing the great experience and continuing to support that person because they’ve kept it classy.
Unfortunately a lot of people don’t consider this. But if you don’t stay classy in that experience, it is going to be bad. We want to make sure we always keep it classy, and treat that person the way you would like to be treated if you were requesting a refund.
Remember, we’ve all been through those horrible situations, so don’t be someone who perpetuates those horrible situations for others.
Please take note that even the passive aggressive post on Facebook is not classy. It has happened to me where I requested a refund from someone, and they were totally classy about it to my face, no questions asked, and gave me my money back. But then they went on their Facebook page the next day, and complained about what a terrible client I was.
They would talk about how this is why we weren’t meant to work together, and basically celebrated my refund request and us not working together anymore. They’ve had a passive aggressive message that it was my fault something went wrong, and that it was because I wasn’t their ideal client, and that their life is so much better because I’ve disappeared from it.
That is so not classy! I know that you’re not actually calling someone out by name, but when I see other service providers sharing any of that passive aggressive, gross stuff on their Facebook page, it says way more about the person posting it than it does about the person who’s left and asked for a refund.
So just check in with yourself. Sometimes we want to go out there and celebrate in a safe space for ourselves, or convince ourselves that it’s totally okay and it doesn’t mean anything about us. But you need to be really mindful of the audience you choose for sharing that kind of post.
Instead, I suggest getting yourself a lady posse wolf pack of just a few people that provide you with a safe space to go and have that debrief without necessarily downloading on your entire audience.
There have been people I’ve gone to work with, and then seen these passive aggressive style posts, whether in courses we’ve done together, or in free Facebook groups, or on their Facebook page or Instagram. And that has turned me off working with them! Because I can’t help but think about who is that poor person that’s being referred to? What did they do, and what if I end up being that person if I opt to work with this service provider?
So please be sure that that you keep it classy!
2. There are some big positives from refund requests
If someone has signed up to work with you for a six month package, and after a month they decide it isn’t the right fit or they aren’t getting the outcomes, that’s actually really good information for you.
If they aren’t the ideal client, and they don’t see themselves getting great results from staying with you for six months, wouldn’t you rather them articulate that early? Rather than just staying with you, going through the motions, and then after six months becoming someone who hasn’t had great results or the best experience?
You don’t want to force someone to stay working with you if they don’t feel like it’s a great fit or like they’re getting great value.
My goal for everyone who joins one of my programs, like TakeOff or the Heart-Centred Business Academy, or who works with me one on one, is that when they end that time together, if it’s not a 100%, heck yes “loved it,” then I want to know as soon as possible. I want to know what it is they don’t love, and if there’s a good reason why it’s not a fit for them. I would much rather give them a refund and clear that space for someone else that will be the right fit.
You also want to make sure you’re not creating really weird standards for yourself. One of the positives about refund requests is that there are industry norms. There is a normal refund rate of between 3 and 5% of people who buy online courses. There’s a normal dropout rate between 3 and 5% of people who sign up for your VIP work.
If you are trying to keep a zero percent refund rate, then chances are you’re going to fail at that.
For a lot of people, the positive of getting a refund request is that it’s actually still well below industry average. So it’s totally brilliant to celebrate that someone has opted out. Someone who isn’t the right fit and isn’t going to get great value from it.
Another positive that comes from getting a refund request is that it’s a rite of passage. When you get that first refund request, I want you to celebrate it because baby, you made it! Every business has refund requests – every business – and you cannot have a multi-million dollar online business without some refund requests.
Instead of avoiding them, if we aim to stay around or below industry averages, and we celebrate those refund requests as the people for whom it’s not the right fit dropping out, then suddenly refunds just feel like a normal part of business – a totally positive part of business.
3. Look for the opportunity
When you get a refund request, there’s often an opportunity in that refund request for review.
Do you have good refund systems in place?
When people request a refund for my programs, I don’t actually know about it anymore. My customer service team takes care of that for me. They refund the person, and the person can tell us why, or they don’t have to tell us why. The only time I know about refunds is if we have a big spike in them and it’s something we need to actually deal with. As long as it stays under our normal average of under 2%, I don’t even need to know about it.
My system makes it easy for that person to get their refund, and the system makes it easy for me to not get bogged down in worrying about the refunds. And the system also means those refund requests are recorded and reported appropriately so I can pay attention to the refund rate to see if there’s a spike or anything I need to be worried about. But if there’s nothing I need to be worried about, I’m not worried about it.
Refund requests also present a chance for you to review your policies. For a lot of people, the reason why refunds feel really awkward is they don’t actually have a clear and concise refund policy in place – it’s a bit of a gray area. Then you’re left with needing to make a decision about whether that person is entitled to a refund or not, without having clear guidelines and policies that will give you a straightforward answer.
If you haven’t got refund policies in place, you don’t have terms and conditions in place. You don’t necessarily have clear guidelines on what to do if someone is looking for a refund or if something’s not the right fit for them.
That refund request is your opportunity to review those policies, get them in place, and think about various scenarios that might happen.
When it comes to working with VIP clients, the completely risk averse approach would be to have people sign a contract. And in that contract, you would have very clear terms and conditions about refunds, about dropping out, about failed payments on payment plans, etc, and it’s completely written to the letter.
The opposite end of the spectrum would be to not even talk about it. We don’t want to be at that end of the spectrum. Usually somewhere between the middle and the very risk adverse space is ideal when it comes to a refund policy for people working with you as a VIP.
I really want to focus down on this one because I have heard some horror stories. I’ve also heard of people using the contract as a way of basically separating themselves from needing to deliver good services to their customers.
I had a client who had previously been working with someone else. She had been working on a six month VIP package with this person at a negotiated price, and paying on a monthly basis. After three months of working together, she realised she was not getting the level of support she expected to get in that package. She was not getting enough detail in the execution of the strategy she was learning. Therefore she was finding she wasn’t getting any results from the process, and was feeling more and more overwhelmed, being told she needed to hire more and more and more team members, which was never discussed when they first started working together.
So she reached out to me for some advice on how to approach this. It wasn’t through the lens of wanting a refund or wanting to drop out at first, but just wanting to really clarify the deliverables, and how much more money she would need to invest to get the results. Truth be told, she had invested her last bit of money in working with this person, thinking that if she invested in this coaching, she should be able to put those strategies in place and get return on investment.
She didn’t realise – and there had been no initial conversation – that there would be another 10 to $15,000 worth of hiring needed in order to scale the business and get the intended results.
And so I helped her draft up a little email indicating maybe she wasn’t quite exceeding the expectations, and requesting a conversation about where to go from here. The provider wrote back and said, “If at any time you don’t think it’s the right fit, you can just stop working with me. However, as per the contract, you need to complete your payment plan.”
Instantly after sending that email, the client was essentially told, “well, I don’t really want to work with you either. But you still have to keep paying me.” This service provider was using that contract as a means of saying, the law is the law, you still have to pay me.
Ultimately, that is not how I want to show up as a provider online. It would be interesting for you to reflect on how you want to show up as a provider online?
Yes, your rights as the seller need to be protected. But you also have an obligation as the provider to deliver on what you promise and to be upfront at the start of the process about what it’s going to look like and what people can expect.
I’m not saying you shouldn’t have contracts, or you that should. But I do think no matter what it is that you are selling, no matter how you deliver those products or services, no matter how risk averse or risk friendly you are, you want to make sure at the start of any engagement that you’re really clear on what your rights and responsibilities are, what your buyers’ rights and responsibilities are, and what you’re going to do.
If either party feels like it’s not a great fit anymore, then you don’t need to necessarily have a detailed contract that covers those things off. I personally cover that off in a very informal confirmation email. For some industries, you do need to have it in writing, such as handling someone’s finances or if you’re doing something in health, sometimes you do need to actually have a contract.
But for me, I actually have an informal confirmation email that talks about those core things. It very clearly says that we are two grown adults, and if at any point in this arrangement either of us feels it’s not a fit anymore, we’re going to talk about it and see if we can adjust what is being delivered to make sure it fits both parties needs. If the person decides they don’t want to do it anymore, here’s how the refund or payment would be renegotiated or adjusted to reflect the level of service that had already been provided. And also, here’s what to do if you’re not happy with that. It’s a simple way of just being really clear.
Developing this approach came through a specific experience with a refund request where I realised I hadn’t made that 100% clear. The person had been a little bit unhappy with the level of stretch I was giving – they wanted to be stretched and pushed further – but I was still working on the basics with their business because their foundations needed some work.
So the person wasn’t happy they weren’t doing the more advanced style strategies. But for two months – four sessions – they hadn’t said anything because they didn’t know how to raise it. And so it ended up escalating for them behind the scenes and kind of blowing up because they hadn’t been happy for three months, and it all came out at once.
I took a day. I read the email several times and then I recognised that I hadn’t been upfront about what to do if someone didn’t feel like it was meeting their needs. So that person got a partial refund, and we stopped working together. I sent them to a friend of mine who I thought would be able to help them with more advanced stuff, and it actually ended up working out really well.
As a result of that experience, I included an extra part in my confirmation email when we first start working together on what to do in that situation.
It’s important that you look at this through the lens of “it’s all a practice,” and sometimes you don’t know what people are going to want or how they’ll want you to deal with things, or what boundaries people are going to be pushing, until those boundaries are pushed.
All you can do is set yourself up with some systems and basic policies, or get advice from a legal representative to set yourself up in a way that feels good for you.
Know that you might have to make some adjustments on the way – you don’t need to get it perfect from the very start.
Now, the final opportunity that I want to talk about from a refund request is the learning opportunity.
It might be that your sales processes aren’t clearly articulating how your services are delivered, or your sales processes are promising things that aren’t clearly delivered in your services. It might be that your marketing is attracting people who aren’t the right fit because of the way you talk about something or the audience you’re advertising to.
There are many reasons why it might not be working.
Refund requests are great opportunities to look at where there might be a disconnect. Don’t be afraid of asking people, after reassuring them of their refund, to share why it’s not a fit to what they expected.
I only ever ask that question after I’ve given the refund. We just ask for any feedback that may have been able to prevent this issue. And that is a really beautiful learning opportunity as well. It helps me to get clearer with my offers, and ensures I am getting clear on who my ideal clients are. Then when I’m putting my courses together, it speaks to the level of information and detail people need to make an empowered decision, without making assumptions about what’s included.
So just to recap – Stay classy, look for those positives, and look at all the amazing opportunities the refund request will give you.
Now, I also just want to say in closing this podcast episode, that refund requests are all part of scaling your business. The larger your business becomes, the more clients you have, the more likely you are to get some of those refund requests.
So please, please, please, if I can leave you with one thing, it’s the understanding that a refund request is not a reflection of your value as a human being!
A refund request does not mean that you are a failure at business.
A refund request is simply a part of your business scaling. And it’s a sign that you are on your way to bigger and better things.
Thank you so much for joining me for this episode of the Heart Centered Business Podcast. If you’ve got any questions or lightbulb moments as a result of this episode, come on into the Heart-Centred Soul Driven Entrepreneurs Facebook Community, use the #podcastaha and let me know that you’ve been listening to episode number 208. And let me know any “aha” moments, light bulbs or questions you might have in relation to refunds.
Until next time, I cannot WAIT to see you SHINE.