Is offering a refund a bad thing?

[~ServerPoint~]

I believe that almost all web hosting providers offer money back guarantee.
It can be suitable for web masters to choose appropriate hosting service.

 

[Eric_HE]

Provide money refund guarantee which may further polish your hosting.

 

[pageSpot]

I can't understand how a money-back guarantee or free trial could scare people away. I think a satisfaction guarantee is a normal part of this competitive business so it couldn't hurt you to offer one. I'm trying to think as a potential customer.. 7 days might not be enough time to test out a server, or it might not be worth the trouble of moving my domain/DNS/etc to a new server for that short period of time.

 

[deeplist]

We don't provide "trials" because then you just get a bunch of idiots that move from server to server and just survive on as many trials as they can find. We do offer a money back guarantee. To date, nobody has demanded their money back from us, but the policy is there nonetheless. I personally believe a money back gurantee of some sorts is important to most consumers.

 

[HostMantis]

Everytime I offer a "7-day" trial, people avoid the offer. I offer 100% money back for the product, and people avoid the offer. I don't know why people wouldn't want that.

I give full refunds...and people avoid my services because of it. Any idea why? I've been around for almost three years now. And every year, this gets worse.

People usually look for money back guarantees, not avoid them. Perhaps it has something to do with your website, pricing, terms of service or something else?

 

[M Bacon]

A refund policy is a must in any business.

 

[The Crasher]

well , i got a bit of comment about it

in 1 case i agree about a refund policy
but in the other case , if a host provide a refund policy then it means that there is a risk that they need to refund

and that is not something that always happends


from my past experiance with differend company's can i say that 95% gives big problems when you ask a refund

to provide a example
i buy a webhosting package , and after a few days it was still crashing and freezing all the time

so i asked a refund , took them about 2 months and a paypal claim to get it back (goes about a few dollar then ... )

same happends with dedicated servers that i buyed from a company
as it happends to with differend things

on the other side
a trial is nice to , but it get abused a lot (i dit it to before , switching from hosts after trials , or using hosts to test things until trial expire , and with testing i mean bringing it down as fast as possible ^^ )

the thing i do now is what i feel that is the best , it does not have bad results and it does keep my clients happy

i offer a 7 days full refund no questions option
but it is not public , it is more like a personal agreement that is made betwean the clients ( users ask for it if they are not sure about it )

the users who ask only for a trial get instand denied , as you know that they will abuse it ( 95% will abuse it )

so from my experiance , you do not need to put those things on your site , but it is nice that you offer it in the background

on that way the users can see that you are willing to offer a refund , but that it is not needed to promote that you give refunds

it gives a better feeling of your services , its like saying
"you wont find a better place , i do not even need to provide refunds as you wont ever leave ..."

when you provide a refund or a trial then you say more something like
"give it a try as i am not sure that i can keep you happy , so here is my best solution at this moment ..."

on the other side , you need to provide a refund as not every client can be happy , and there can always be problems , and you do not want to have bad commercials so a refund is the minimum to offer ( in my case 7 days , and then pro rated)

but it is definaly not a bad thing , it depends how you offer it and if you do it right then you will gain clients

but please note , offering a refund is not something that will attract clients , as basicly every1 do it
and only a few provide the real refunds , most company's that offers a refund does not even provide a refund when asked for it

hopely this can help you

Greets from PowerChaos

 

[hostcolor]

This is the first ever thread in which someone says that the money back guarantee make any customer not to sign up. I believe that a sign up depends of the credibility of the seller.

 

[The Crasher]

I believe that a sign up depends of the credibility of the seller.

it depends how you look at it
but it is like you say

a client always looks at things that a host is missing
and as it is just not possible that all the clients knows who you are does it depends on differend things

to provide a example
i first check the tos and if i do not like the tos then i wont even try to sign up
then i check the livechat ( if there is a livechat) to ask a few questions (depends from host or what i need)
then i check for the refund policy (why they provide it , dit it provided problems before , what terms falls under refund and so on )

a client is a strange persone
they always find someting that you are missing , trusting some1 those days is hard for every1
but it is not excluded that a refund policy can do damage

to provide a exelent example

my first hosting package was for 1$ for a great package ( 10GB space ) as i was just reselling from a reseller
but the clients just refused to sign up as they dit not trust the price/offer (its to mutch to be true , confirmed with a lot of friends that even refused to sign up because of it )

on the other side , i sell basicly the same thing but for 5$ (10GB space ) but in my case from a dedicated webserver
and now i got a lot more clients that are willing to pay 5$ instead 1$

reason they do is because 5$ seems more real then 1$ for the same package

so it is not only the refund policy , but basicly everything in general
the refund policy depends to on what price the refund policy count
if you are providing a refund policy for 1$ ?? then i will ask a lot of questions to (who cares about 1$ ??)

so if you ask me , if you want to ignore my other post and want to post the refund public , then it realy depends where the refund policy is counting for
make it that it is trusted , so a user know that you provide refunds when something goes bad but that they mostly does not need it

if they ask me if i provide refunds then i say that they got 7 days full refund with out questions , and then pro rated depending on the reason (need a valid reason)
as if a user is happy after 7 days , why not after 2 years ??

so my final post
it realy depends where it is used for , how it is used , when it is used , what rules it has and a lot of other things that are involved and makes it looks strange
let it looks like just a extra service (and not just a need to have ) then i am sure it will even give more clients then clients that leave

hopely this explained my vision about your post Fcolor

Greets From PowerChaos

 

[azoundria]

Currently, refunds are considered standard. So much so, that many people consider them a requirement or even believe that they are legally required, when in fact there is no such stipulation.

As such, it doesn't set you ahead of the competition at all. So there's no real advantage seen from the standpoint of a consumer to see that.

However, as of late, there is this very strong anti-consumerist movement. People have some strange ideas, about avoiding marketing altogether. They are tired of receiving calls at dinner time, having advertising on their browser (install ad blockers), pop-ups, spam emails and even legitimate marketing emails, etc... So they push back hard against this barrage. Marketers respond by being even more 'in your face'. This causes an even stronger push back.

We are at a point today where people will avoid a purchase BECAUSE it is in an advertisement. The link may have exactly what they need, but they would rather click the link that ISN'T the advertisement. Something similar is happening as a result of people being charged later for services they didn't want but forgot to unsubscribe from. (Even Google AdWords is now a prime example.)

I think, people may feel pressure from the guarantee and so they push back against it. If you offer a free trial, maybe there is something to be worried about? With refunds, of course it's more hassle in most places to get them than they are worth.

Unfortunately I provided a problem, but not a solution.

 

[TaoPhoenix]

I might know the difference.

"Refund back" requires effort and "confrontation" to ask for the refund and possibly endure a response of "I already answered your question". I'd run it in reverse as an expiring free trial *with no info needed* to see if someone likes the service, then it just expires gracefully unless someone does a full signup.

I am very sensitive to the issue of the data typically required for a paid host, so except for a scam abuser, I'd be more inclined to try for a lark for free with no commitment. I also agree with the note elsewhere about 30 day trial, not 7, because one crappy week and your 7 day trial is up, it might take the prospect 3 weeks to figure out what they want to ask themselves / bosses / life.

Azoundria has a fine tuned point above. Don't make it "opt out to avoid charges", make it "opt in to accept charges". I also feel this will weed out many customer support issues.

 

[Seraphim]

I've been maintaining my policy of my paying clients getting their month's service free if my service quality is below what I believe it should be.

In a year and a half of operation, I have only ever had to actually honor that clause twice. Once due to a hard drive failure, and a second time during an extended outage caused by other circumstances.

So far I haven't had anyone attempt to demand that I pay it out, in fact every time I've done it my clients found it something of a pleasant surprise when I let them know their account had been credited for the month.

Tao probably is right, it needs to be portrayed more positively. Instead of "If you don't like us we'll give you your money back" represent it as "Here, take a test drive and see if we can do what you need. We'll worry about the costs once you've figured out what you like."

 

[tlchosting]

We found that if a client has had a refund, they some times come back. If a client comes back it makes them exempt from the refund as they have used our services before. Also we started a 1 month trial. If you pick the one months trial and don't like it in the second month you are not entitled to a refund.

 

[The Crasher]

the 30 days trial depends what you are offering

if you are selling webhosting then a 30 days trial is not bad (you wont lose any money because of it )
but if you are selling vps servers like i do (dedicated vps servers) and then need to offer a 30 days trial ... then i lose a lot

for that reason is there a refund policy , and are 7 days good enouf (if you cant get it up and running in 7 days , why would you be able to do it in 3 weeks ?? )

in most cases the users who buy a vps use it for private gaming or as a proxy (or other related stuff )
so 7 days is enouf time to test the speed , the uptime and what it can handle in that package

unlike webhosting , webhosting need visitors , takes time to test the cpu load and how stable it is

so to make a choise betwean refund policy or free trial depends on what you are offering

personal i preffer a refund policy , as you get paid before they can use the refund policy (you do not have trouble with clients that does not have any money )
unlike a trial , thats where they do not need money in the first place

it all depends on the reason you have if you offer a refund or a trial , but the end result stays the same
it depends what you are offering and how likely the amount seems , to high trials just ask for problems

its like offering a dedicated server with 30 days trial ... who will ever use that ?? (they wont )

Greets From PowerChaos

 

[sarmth]

Schmarvin, Do you have any feedback stating that, "I will not use your services because you have a refund policy" ?