Is The “Customer Always Right”? - Caleb Jones

You’ve heard it many times:

The customer is always right.

This is probably one of the most well-known pieces of business advice there is.

But is it accurate? Is the customer always right?

From a technical standpoint, obviously the answer is no. My first real job was calling back angry customers to calm them down and help resolve their technical issues. I did that for three years and made thousands of phone calls.

I estimate that only 30% of these angry customers actually had a valid point. The other 70% did not. They were either idiots doing very simple things incorrectly, overly-anal people who were easily annoyed or frustrated at the tiniest little things, or just assholes. Regardless, I was instructed that the customer is always right, so I did what I was told, regardless of if the customer was actually right or not.

But the saying, “the customer is always right” is not literal. It means you need to treat the customer as if he’s always right.

Okay. Is this good business advice?

The answer depends on your business structure.

If you have the type of business where you are selling to thousands of customers (like a B2C business), then yes, you need to treat the customer as if he’s always right even if he is not. In my Blackdragon business (for example), if someone wants a refund for a product they purchased, they get it, even if it’s quite obvious that they’re just ripping me off (which happens) or even if the reasons they stated they want the refund are obviously factually incorrect (which happens a lot). Doesn’t matter. The customer is always right, so I always give them their refund and I’m very nice about it. The only time I’m not nice about it is if they continue to bitch at me after I give them the refund, or if I spent an extra amount of personal time with them during their purchase. But thankfully these instances are rare.

However, if you have the type of business where you sell to a small number of big clients, such as a consulting business, social media business, and so on, then no, the customer is not always right. In these scenarios, it’s almost the exact opposite. You tell your clients exactly how you do business, and if they complain or make demands, you nicely tell them you aren’t going to do that, and that they probably need to go elsewhere.

Years ago, I had a very big, very profitable consulting client which was a company of about 200 employees with several locations. One of the key vice presidents in this company complained at a management meeting (when I was not present) that he had to wait two hours to get a call back from me when he had a problem and needed my help.

For some extra context, he called me on a Sunday afternoon. I was at the movies with my kids because, you know, it was a Sunday. Most people wouldn’t have called back until Monday. I called back in two hours on a Sunday afternoon, which I thought was pretty good customer service.

This individual thought it was bullshit he had to wait two whole hours to get a return call on a Sunday afternoon.

Later that week, I was informed by another manager that as of then, I was going to guarantee a response time of 10 minutes any time a manager or VP called me.

“I already call back within 10 minutes,” I said, “During the normal 8-5 workday.”

“Yeah,” he said, “But sometimes we need your help on weekends and evenings too.”

“I know,” I said, “I’m happy to call people back on evenings and weekends too. They’ll just have to wait a little longer.”

“Yeah, yeah,” he said sheepishly, “But we really need that 10 minute response time on weekends and evenings too.”

“You’re kidding,” I said.

“No, not kidding.

“Whenever they call me?” I asked.

“Yep,” he said.

“For any reason whatsoever?”

“Yep.”

“So you want me to basically be ‘on call’ 24/7 for your guys all the time? With a 10 minute response time? Even if I’m having dinner with my family or seeing a movie with my kids and so on?”

“Yep.”

So was the customer always right? No. I told him, nicely, that I don’t work that way, and if they seriously wanted that level of service, they either needed to look elsewhere for a consultant, or we could possibly discuss jacking up my monthly retainer fees to them by a lot.

Two months later, they said goodbye. We ended a 12-year business relationship. And I had no regrets whatsoever. When you have a business with a small amount of large clients that take up your time, you are in charge. You tell the client how it’s going to be, and if they don’t like it, tough shit. Very different than “the customer is always right.”

By the way, this also applies a little when you have a business selling to lots of people. A while back, I really jacked up my coaching rates in my Blackdragon business, and even stipulated that men needed to join the SMIC Program at the Diamond or higher level to even get access to me at all. Some people really got upset about this.

Tough. While the customer is always right in a scaled business, you still need to draw a line and be clear about your limits.

While always being very nice, of course.

28 Comments on “Is The “Customer Always Right”?

  1. Caleb,when you were a consultant have you offered money back guarantee in one on one meetings?
    If you offered money back guarantee,how you reacted when you helped somebody on some issue and they said that they are not going to pay for your service?

  2. Caleb,when you were a consultant have you offered money back guarantee in one on one meetings?

    No. It’s very difficult to offer a money-back guarantee with something like personal coaching or consulting that takes your personal time away from everything else. Very different than having a money-back guarantee on something like a book.

  3. FWIW, although your reaction is perfectly reasonable (in the ten minute callback situation) I don’t know if it is what I would have done. I might have just agreed assuming there were no contractual penalties. Often times when people say stuff like that it is just a temper tantrum, and next time they call on Sunday and expect a ten minute response a “sorry I was watching a movie with my kids” is enough that they get pissed but not enough for it to really matter. If they are truly in a screwed up situation they’ll be happy you called at all. Part of business is dealing with people as people who do and say stupid stuff and make unreasonable demands. The old epithet that it is easier to ask forgiveness than permission applies in business too.

    Plus it is also possible to weasel the agreement too: “I commit to a ten minute response time reasonable exceptions applying.”

    Of course it also depends on the broader context. If you have an abundance of business then you have a bit more flexibility. And even if you can do it, a 10 minute response time, unless you have a full time staff is basically a form of slavery, and more importantly an indication of a poorly run business (on the part of the client of course.) Perhaps a better approach would be “Perhaps we need to work on your business processes to find out why you could possibly need such urgent responses: perhaps you need to put better and more proactive systems in place.” I wonder if this self important popinjay of a VP actually had a good reason to need such urgency?

    I know you have a personal code thing about “lies”, whatever “lie” exactly means. But I am happy to be as flexible in my interpretation of instructions as the US Supreme Court.

     

  4. This was originally such a great motivational phrase. It is too bad the customers got a hold of it.

    Telling this to employees prevents things like waiters saying:  “Sorry, not my table” instead of finding out what the customer wants and telling their waiter or getting it for them.

    It has now been internalized by the general public to such a degree that people feel they are the customer and they are always right, even when they aren’t paying for something, which I am sure you already know better than most.

     

    I once worked at a place where you literally weren’t allowed to say ‘no’ to a customer.  If you couldn’t do something, you were supposed to say, “What I CAN do is . . .”

    For a customer who just wants a yes or no answer, it was like living in crazy land.

    I am not anti-business, but if you create a culture that concentrates so heavily on markets, it is not a surprise that people become irrational, erratic, and spoiled when they don’t get their way.

     

    It is like the opposite of behaviorism. Constantly rewarding bad behavior.

     

    It was fine on the wall of the office, but became a nightmare when it got out among the customers.

  5. BTW, Caleb, I am curious to know… I lived in the UK for a while and that “customer is always right” culture is not nearly as prevalent, perhaps the word is “audacious” as it is here in the USA.

    Have you, in your dealings, noticed a difference in this area between the USA and other countries? Do you find customers from outside the USA to be less demanding, and less asshole-ish?

     

  6. This was originally such a great motivational phrase. It is too bad the customers got a hold of it.

    Haha. Yes!

    Have you, in your dealings, noticed a difference in this area between the USA and other countries? Do you find customers from outside the USA to be less demanding, and less asshole-ish?

    Yes. Customers in other countries tend to feel less entitled than Americans.

    However, a lot of that is because life in other countries is just flat out worse in many ways, so more non-Americans are accustomed to more chaos.

  7. Yes. Customers in other countries tend to feel less entitled than Americans.

    Agreed. Worked in sales/customer service at a Canadian internet retailer. Served Canada, USA, Australia and New Zealand. New Zealand is most friendly and chill, followed by Australians (but they had more instances to be pissed compared to NZ because we didn’t clearly list if their insurance provider was a partner with us…so they might be a tie with Kiwis), Canadians were friendly but more entitled that NZ and AU….prob because we are more similar to Americans than to them. Within America itself, lots of diversity based on what part of the USA they are in. Americans were always pissed at delivery time…even though they got product in 2-3 days. Or with overnight shipping, think that if they order at 11pm that FedEx would deliver to them by the next morning in 8 hours. An Aussies would call in and we’d say its 2-3 weeks in transportation and they’d be like “Oh OK mate. No worries. Cheers. Cya”

    I’m in slight disagreement with customer is always right. If you run a consulting practice and have 3 clients, then one might consider bending over to service them. If one client drops you, then that is one third of your revenue. If you sell to thousands online, then telling one prick to piss off won’t really hurt you.

  8. If you run a consulting practice and have 3 clients, then one might consider bending over to service them.

    I agree with Caleb that it’s exactly the other way round. Either your business model is that you sell something simple to a large crowd, or it’s tailor-made for only a few select customers. In the first case, if you raise customer satisfaction by 5%, then you increase your revenue correspondingly as those extra 5% now prefer your shawarma house to a hot dog stand that’s your main competitor.

    If you only have three clients though, it’s imperative that either you can easily find replacement clients or they can’t easily find replacement providers, otherwise it’s just bad business model. Raising customer satisfaction by a small amount is going to change nothing at all, but it’s going to cost you much, assuming you’ve already made sensible commitments and making more commitments will only result in diminishing returns.

  9. This is interesting because it makes me think how that translates to working a normal job for an employer. Of course most would do obediently what the employer says but I always had attitude I just have my way to of doing things and thats that and if they don’t like that’s theyre problem not mine. Many employers did have issues with that but many learned in the past to work with it as they saw I am not a standard employee and give out of the box results and perspectives. Now I find myself in a special situation where these are my last days at work but they will still have to pay me for months which I will use to kick start my own business. I am in this situation now precisely because I had this attitude. I have seen that being dominant and confident with both coworkers and managers has resulted often in them not liking what I do but putting up with it because they were afraid to tell me. Seriously. Not only that they thought I must be super smart and they simply don’t understand my way of working.

  10. This post comes at the right time.

    Was curious how you deal with refunds as you said previously also that you just refund no questions asked.

    But here is the thing: Most of the customers do not have valid points and do not read your refund policy. Then you have those who are just ripping you off(even if it’s small %). Then you have those who purchase from you, ask for refund without a valid point then return back purchase again and do it all over. I’m all about helping the customers if they have valid/grey area points and treat them like they are kings/queens, but if I sell high ticket items and they blatantly rip me off or have childish demands I don’t really play “the customer is always right” game.

    Also you have the chargebacks who have a fee on top. These are all costs that might damage a business if you take the “refund no matter what” path.

    Isn’t it better to fight the whiners and get them off your business once and for all without losing money than just refunding them and losing them anyway(or giving them a reason to continue doing what they do?)?

  11. Was curious how you deal with refunds as you said previously also that you just refund no questions asked.

    But here is the thing: Most of the customers do not have valid points and do not read your refund policy. Then you have those who are just ripping you off(even if it’s small %). Then you have those who purchase from you, ask for refund without a valid point then return back purchase again and do it all over. I’m all about helping the customers if they have valid/grey area points and treat them like they are kings/queens, but if I sell high ticket items and they blatantly rip me off or have childish demands I don’t really play “the customer is always right” game.

    Also you have the chargebacks who have a fee on top. These are all costs that might damage a business if you take the “refund no matter what” path.

    Isn’t it better to fight the whiners and get them off your business once and for all without losing money than just refunding them and losing them anyway(or giving them a reason to continue doing what they do?)?

    Amazon has extremely liberal refund policy. You could abuse that a lot of if you wanted to and many probably do but they are making millions and continue to grow and push other business out. So I guess it works. I have used the refund option of Amazon being so easy about it quite a lot. I would not say I abused it but I def was making full use of it and I order and return all the time. I am basically using the policy to just try stuff out without having to go to shops or read reviews. On the other hand because I know I am so secure with Amazon I buy almost everything except for clothes and food there. They are so easy with returns to the point that often they make policy exceptions for me and also whenever I contact them the person I communicate with is fully empowered to make that exception for me, which results in outstanding customer experience for me and a feeling of safety when purchasing there.

    On the other hand I have had experience with online shops where I was not satisfied with the product I got and it was because it was not properly advertised and these shops refused to refund me or expected me to pay expensive return postage myself saying that they had some conditions somewhere in small print on the website that I apparently didnt read. Needless to say in these cases my credit card company always has taken my side and I got full refund (I just tell my credit card that it was badly advertised/described and that I have requested return and they refused, usually thats enough). The shop then probably had to deal with chargback costs and of course I never bought anything from them again. Though there were cases where they have changed theyre mind and issued a refund when I told them what I am planning to do and that I wish them good luck dealing with Mastercard.

    I totally get that not everyone can do what Amazon is doing it depends on the size of the shop but these two stories tell enough to help you decide which approach to follow.

  12. Caleb,when you were a consultant have you offered money back guarantee in one on one meetings?

    No. It’s very difficult to offer a money-back guarantee with something like personal coaching or consulting that takes your personal time away from everything else. Very different than having a money-back guarantee on something like a book.

    Do you still offer some kind of guarantee or not at all? I want to start consulting business and I would like to lure prospective clients with some guarantees but I obviously don’t want to offer money back guarantee either.

  13. @Investor: Yes but we are not all Amazon. I’m sure Amazon didn’t have such a refund policy when it started.

    I’m not attacking you but your attitude is wrong and I’ll make that point. You are responsible for what you are buying online and a business shop is not a kindergarten in which a customer can order at will just to try the products. The “item not as described” is abused to the point that is ridiculous. Paypal/Ebay says this means SIGNIFICANTLY not as described. The shop is also not responsible to argue with each customer for trivial claims. That’s why there are refund policies in place and you should read them.

    Now if what you bought is defective or SIGNIFICANTLY not as described item, I get your point. But other than that you are abusing. There will be a time when Card companies will not be able to refund that easily because of people like you that are forcing big stores to sue Card companies(and chargeback claims will become stricter). Big stores are losing huge revenues from people who are abusing the system.

    A small store will not fight you on chargeback but a big store will fight and sue the card company on the larger scale of things. Of course in the end that’s none of your business. But there is a big abuse with the chargebacks and eventually the system will become stricter.

    If you are not satisfied with a product or claim that is not properly advertised, it’s your problem. If that product sells thousands of pieces each day and 99% of customers are satisfied, then you are just using trivial claims and you are in the wrong. Otherwise if the product was crap the market will force it to stop selling.

  14. I see it differently: I am paying the credit card company for having such a purchasing protection insurance. The rest is between the store and the card company.

  15. The protection insurance should be for legit claims of unauthorized transactions, undelivered products(in the rare case the store refuses to refund), defective items(in the rare cases that the stores refuse to refund) and SIGNIFICANTLY not as described items(in the rare cases that the stores refuse to refund).

    The rest of the cases are just anal customers, or frauds(you know the term friendly fraud) who deserved to get sued(and companies/stores CAN sue you regardless of the card companies).

    In which category do you think you fall into? From your description I know that you are simply abusing the system.

  16. But here is the thing: Most of the customers do not have valid points and do not read your refund policy. Then you have those who are just ripping you off(even if it’s small %). Then you have those who purchase from you, ask for refund without a valid point then return back purchase again and do it all over. I’m all about helping the customers if they have valid/grey area points and treat them like they are kings/queens, but if I sell high ticket items and they blatantly rip me off or have childish demands I don’t really play “the customer is always right” game.

    Also you have the chargebacks who have a fee on top. These are all costs that might damage a business if you take the “refund no matter what” path.

    Isn’t it better to fight the whiners and get them off your business once and for all without losing money than just refunding them and losing them anyway(or giving them a reason to continue doing what they do?)?

    Offering an amazing money back guarantee will always increase sales more than the number of refunds, including the scammers who ask for their money back just because they want a free product. So while it might be emotionally difficult to see a small handful of customers clearly rip you off, you’re making a good profit by offering refunds regardless.

    You can also ban customers who continually ask for refunds over and over again. I’ve certainly done that in the past (but again, it’s very rare).

    Do you still offer some kind of guarantee or not at all? I want to start consulting business and I would like to lure prospective clients with some guarantees but I obviously don’t want to offer money back guarantee either.

    Yes. For things like consulting or speaking, I guarantee the quality of my work but nothing else. I guarantee that I will do what I say I will do in terms of activity (abide by deadlines, return phone calls, show up for scheduled meetings/events, and so on). If I fail to do that stuff, of course they get their money back (though it has never happened). I also do not guarantee results, since I can’t control all the variables (what if your employees don’t do what I recommend?).

    But if the client just decides they want their money back just because they want it or because they change their minds, no, they don’t get it. You’ve already consumed my time.

  17. If you only have three clients though, it’s imperative that either you can easily find replacement clients or they can’t easily find replacement providers, otherwise it’s just bad business model. Raising customer satisfaction by a small amount is going to change nothing at all, but it’s going to cost you much, assuming you’ve already made sensible commitments and making more commitments will only result in diminishing returns.

    Correct, but still  depends on the assumptions. If you have lines of clients begging to work with you, then you can tell a current client to piss off or play by your rules. If one does not have that luxury to instantly replace a client, then some accommodations might be considered. All depends on the balance of power and the cost/benefit.

  18. The protection insurance should be for legit claims of unauthorized transactions, undelivered products(in the rare case the store refuses to refund), defective items(in the rare cases that the stores refuse to refund) and SIGNIFICANTLY not as described items(in the rare cases that the stores refuse to refund).

    The rest of the cases are just anal customers, or frauds(you know the term friendly fraud) who deserved to get sued(and companies/stores CAN sue you regardless of the card companies).

    In which category do you think you fall into? From your description I know that you are simply abusing the system.

    I think you are either trolling, have no idea what you are talking or completely misunderstood what I was saying. So, I will explain in more detail.

    I am not talking about the standard (compulsory) protection for online purchases. I am talking about supplementary insurance against “dispute with the merchant”. This is what I pay for extra and it means that if I and the merchant dont agree then the insurance is here to intervene. Of course, there are limits and conditions. The way it works is I have to first try to resolve it with the seller and explain clearly what my arguments are. Then if me and the seller don’t reach an argument I can ask for the insurance to cover it and I have to provide evidence that I contacted the seller and attempted to resolve it. They will then look at what my arguments were and what was the response of the seller (or in case of no response the amount of time that has passed). Then they will make a decision whether I get a refund or not.

    I am not talking about finding some small detail on the product which was slightly different or I changed my mind and despite the clear refund policy of the merchant I want my money back and keep the product. No, nothing like that. I will give some examples where I argued with the merchant to make it more clear:
    1. I ordered some clothes and it was a bad quality material despite claiming its a good fabric. Also the label (brand) on the garment was different than on the picture. I asked for returns and they did not reply. I contact the credit card company showing that I contacted them and they did not reply. I got the money back.
    2. I order a mug which was supposed to be like the one in one video game. It was claiming in the description the colour of the font was gold. It looked yellowish on the picture but I thought thats just the way they took the picture. I ordered it and the colour was beige-yellow. Furthermore there was a part of the mug which had some copyright notices and text which I didn’t like to have on the mug and I haven’t seen on any of the photos that there was this nonsense on it. I contacted them asking for returns and they wanted me to pay expensive postage to send it back. I argued with the points above that it was clearly badly advertised and that they should cover the postage in this case. They still disagreed and I was about to contact my credit card company but then they sent me another email they reconsidered and that they will give the money back and I don’t have to send the mug back, that they admitted it was badly pictures on the website. I replied to them I am happy with the level of customer service and have a good opinion of the company and would buy from them again.
    3. I ordered a video game for PS4. It was a game I had previously but sold but still kept the saves but now wanted to play it again but bought the full edition with extra things. It turns out this works with the saves provided its from the same language region. I bought it on a website that was in the same language as the country where I bought the previous game and even the web address looked like its from that country but it was actually a British company. But who cares? Anyway they sent me the game and it was the British version and it did not work with the saves. Now, I know normally returns are not accepted by merchants once you open the video game, so I contacted the studio that made the game and they told that I can return it via merchant and get a different version. So I contact the merchant and they make problems saying I opened it and that its in theyre conditions and that somewhere on theyre website I could have seen its a British company and they are in UK. I told them what the manufacturer said and that they can get a refund form manufacturer and they still insisted that I cant return it. Then I told them I have this purchase protection and they said that would be fraud and if I do it they will go to the police. Then I said no thats not what I meant I have this insurance on the card and basically then its between them and mastercard. Then they wrote to me apologising and saying they misunderstood and that I can return the item and get the money back and dont even have to pay postage.
    I literally don’t remember any other case when I had a dispute with seller where I asked or considered to ask the credit card company to interfere. And I buy a lot of stuff online. Also, if you are a merchant it is your responsibility to manage customer expectations and make your conditions clear.

    Regarding which kind of customer category I fall in to lets look at my history with Amazon. I literally spent thousands upon thousands there. Sure I sent lots of stuff back and sure I did ask for money back when something I purchased had a performance issue within some specified period of time, but I don’t know the exact numbers but I think even with a large number of times its still a small percentage of my total purchases both in volume and in value. I have bought things like TV, home cinema speakers and mechanical swiss watch on Amazon, and most of the books and video games ive played/read in the last 10+ years. Most of these things I have kept. Do you think they are happy or unhappy with me?

    So you see the thing Caleb says about having a good returns policy giving you much more sales than bad refunds… it works even within the same customer.

    In fact I am wondering sometimes if they’re refund policy is always so easy or if they were so easy with me because they can see my purchase history. That would be very smart if they operated that way and I would be surprised if they did not have some scale of how easy they are with refunds depending on customer history for such a big high tech retailer.

  19. Do you still offer some kind of guarantee or not at all? I want to start consulting business and I would like to lure prospective clients with some guarantees but I obviously don’t want to offer money back guarantee either.

    Yes. For things like consulting or speaking, I guarantee the quality of my work but nothing else. I guarantee that I will do what I say I will do in terms of activity (abide by deadlines, return phone calls, show up for scheduled meetings/events, and so on). If I fail to do that stuff, of course they get their money back (though it has never happened). I also do not guarantee results, since I can’t control all the variables (what if your employees don’t do what I recommend?).

    Do you explicitly say in your copywriting that you offer money back guarantee to the client in these cases? What if they abuse that asking for money back if you didn’t show up to a meeting when it wasn’t your fault – like sickness or traffic jam? Also not meeting a deadline could be outside of your control – for example, like you said because the employees did not collaborate?

    Of course if it is one off consulting / coaching and you don’t show up then they dont need to pay but if you work with a client for example on a 3 months contract but there are delays out of your control its very tricky because sometimes who decides if it was in your control or not. So I have a problem with offering such guarantees also…

    Offering an amazing money back guarantee will always increase sales more than the number of refunds, including the scammers who ask for their money back just because they want a free product. So while it might be emotionally difficult to see a small handful of customers clearly rip you off, you’re making a good profit by offering refunds regardless.

    How do you know if they try to rip you off. These claims can be legitimate – maybe they did not like the content / felt they could not use it. Again I think this has to do with managing expectations. If you advertise something like in this course/consulting session/ebook you will get this and this info on exactly how to do this and that and then what the customer gets is either stuff they already know or is they consider it very basic info but your stuff was expensive they can feel cross about it. Whether that is legitimate or not to ask for refund then depends on what your claims were and what your refund policy was. So if you say in this book I will learn exactly how to do this or that and then the I read it and I dont feel I got the info I needed and your refund policy is “no question asked 100% money back guarantee” then I will refund. I dont feel its abusing it because maybe I was hesitant: should I buy this or not? Ah this kind of guarantee, ok, so if I don’t like it I will just send it back. I completely agree though that if it was consulting session you cannot give the money back if they didnt like the information.

  20. @Investor: The way you described it the first time is that you buy stuff and if you don’t find them at your liking you return them back. That can be easy within Amazon but not for small/medium stores and can’t have this in their policy “no matter what”.

    By your examples you are in the right and if this is the way you go on about it I agree with you. Those also are SIGNIFICANTLY not as described cases. I’m talking about minor things.

    But you have no idea probably how customers behave when they don’t like something.

    “I want refund” without further explanation, or “I don’t like the product, I want refund” or “It’s not exactly how the model in the advertisement presents it, I want a refund” are some of the common claims  of refunds you get.

    Refunds in general are rare if you have good products/service. But out of this rare %, there is even rare % of legitimate claims. Most of them are anal customers or scammers. There are even those who do chargebacks without contacting you at all. Still the bank sides with them. These are things I’m talking about.

    I am not talking about the standard (compulsory) protection for online purchases. I am talking about supplementary insurance against “dispute with the merchant”. This is what I pay for extra and it means that if I and the merchant dont agree then the insurance is here to intervene. Of course, there are limits and conditions. The way it works is I have to first try to resolve it with the seller and explain clearly what my arguments are. Then if me and the seller don’t reach an argument I can ask for the insurance to cover it and I have to provide evidence that I contacted the seller and attempted to resolve it. They will then look at what my arguments were and what was the response of the seller (or in case of no response the amount of time that has passed). Then they will make a decision whether I get a refund or not.

    Would you go to all that trouble for products under $50 for reasons like “I just don’t like it so I want to return it back?”. This shows to me you are a ripoff(not you, I mean in general If I get cases like this). And I don’t want you to return back an item that you used, it has no reselling value. These are the cases I’m talking about.

    The huge majority of customers are pleasant. Those who have legitimate cases of refunds are mostly pleasant too. So you approximately know who are the ripoffs from their first interaction.

    Offering an amazing money back guarantee will alwaysincrease salesmorethan the number of refunds, including the scammers who ask for their money back just because they want a free product. So while it might be emotionally difficult to see a small handful of customers clearly rip you off, you’re making a good profit by offering refunds regardless.

    Of course a MBG is always a must. But in some cases since this is in the beginning of the funnel and if you have certain conditions in your refund policy that nobody reads(like debt contracts) your sales do not increase by that. So at the end you have few customers that are ripoffs. Fighting their cases or not doesn’t affect you so why just refund them no matter what in those cases? I’m not talking about digital products like in your case in which you have very low costs. Someone might be making 1k extra(or even more) each month from fighting this cases without affecting the business.

  21. “I want refund” without further explanation, or “I don’t like the product, I want refund” or “It’s not exactly how the model in the advertisement presents it, I want a refund” are some of the common claims  of refunds you get.

    I literally never do that. I always give explanation, unless there was a clear policy that I can refund it for any reason within a specified time like Amazon does for example, and they don’t care why then I dont give a reason because they probably won’t even read it.

    There are even those who do chargebacks without contacting you at all. Still the bank sides with them. These are things I’m talking about.

    Then it is the banks fault and then the merchant has the right to sue the bank like you suggested earlier. My credit card company explicitly requires to show proof of attempting to solve it first and give reasons. There can be rare special exceptions to this, like when a vending machine took more money from my credit card then it should have they refunded me no questions asked, but that was a small amount and they see I purchase like crazy and this is stuff is rare.

    Would you go to all that trouble for products under $50 for reasons like “I just don’t like it so I want to return it back?”.

    I only do that with Amazon because I know they are ok with and because I and they know that I purchase a lot of stuff from them (that I keep) that more than compensates it. When I do it its not one product under 50 but lots of them and I put them in the same box to save amazon on postage costs when returning it.

  22. The customer is always right, so I always give them their refund and I’m very nice about it. The only time I’m not nice about it is if they continue to bitch at me afterI give them the refund, or if I spent an extra amount of personal time with them during their purchase.

    Well, if he doesn’t pay he isn’t a customer in the first place, is he? You got to be nice if they actually give you money. Same with the consulting problem you had with the “10 min response time” thing, they were paying you, but not for this level of service.

    The customer is always right but he isn’t a customer until he buys something. Prospective customers may be wrong or misunderstand what your product or service does or is, and it is a necessary practice to correct them and inform them as to what they would they actually be paying for.

  23. Offering an amazing money back guarantee will always increase sales more than the number of refunds, including the scammers who ask for their money back just because they want a free product.

    Way less painful for digital products than for physical products though.

    If one does not have that luxury to instantly replace a client, then some accommodations might be considered.

    Then one has to work towards obtaining such a “luxury”.

  24. Do you explicitly say in your copywriting that you offer money back guarantee to the client in these cases?

    No.

    What if they abuse that asking for money back if you didn’t show up to a meeting when it wasn’t your fault – like sickness or traffic jam?

    That would be my fault. (Traffic is never an excuse for lateness. That’s your fuckin’ fault.)

    Also not meeting a deadline could be outside of your control – for example, like you said because the employees did not collaborate?

    Then that wouldn’t apply to the refund policy. You only get a consulting refund if it was my fault, not your fault.

    Of course if it is one off consulting / coaching and you don’t show up then they dont need to pay but if you work with a client for example on a 3 months contract but there are delays out of your control its very tricky because sometimes who decides if it was in your control or not.

    No it’s not. It’s always quite clear.

    How do you know if they try to rip you off.

    You can guess from what they say or don’t say when asking for a refund and also base that on your overall refund rate. For example, if you have a refund rate of 3% on something and have sold thousands of them to thousands of happy customers, and one guy says your thing is absolutely terrible and wants a refund, he’s likely full of shit. Same goes for if a guy buys a bundle of books from you and instantly asks for a refund a few hours later (you seriously read three books in a few hours?). And so on.

    But it’s always a just a guess on your part.

    As long as my refund rate is low (and it always is), I really don’t care why they’re asking for a refund. Give them their money and move on. Outcome independence.

    Again I think this has to do with managing expectations. If you advertise something like in this course/consulting session/ebook you will get this and this info on exactly how to do this and that and then what the customer gets is either stuff they already know or is they consider it very basic info but your stuff was expensive they can feel cross about it. Whether that is legitimate or not to ask for refund then depends on what your claims were and what your refund policy was. So if you say in this book I will learn exactly how to do this or that and then the I read it and I dont feel I got the info I needed and your refund policy is “no question asked 100% money back guarantee” then I will refund. I dont feel its abusing it because maybe I was hesitant: should I buy this or not? Ah this kind of guarantee, ok, so if I don’t like it I will just send it back. I completely agree though that if it was consulting session you cannot give the money back if they didnt like the information.

    You’re overthinking this. Just calm down, produce the absolute best products/services you can, offer the best money-back guarantee you possibly can, and then sell the shit out of it. As long as the overall refund rate is low (and it should be), don’t worry about it; you’re making money.

  25. Well, if he doesn’t pay he isn’t a customer in the first place, is he?

    Incorrect. He still might be if he’s a regular customer and has purchased many other products from you over a prolonged period in the past. Just because he didn’t follow through on this particular transaction doesn’t necessary mean he’s not a customer.

    It’s always about the lifetime value of a customer, not a single transaction.

    Way less painful for digital products than for physical products though.

    Irrelevant. Include an easy-to-use return postage sticker in your shipments, factor in return shipping costs at around a 3-5% return rate into your budget, and move forward. Not a problem.

  26. “You want me to get back to you in 10 minutes?  I understand that there are specific business needs that might warrant such quick replies.  Lets review my contract and make this requirement very specific.”

    And then the manager starts to back off.

Leave a Reply

To leave a comment, enter your comment below. PLEASE make sure to read the commenting rules before commenting, since failure to follow these rules means your comment may be deleted. Also please do not use the username “Anonymous” or “Anon” or any variation thereof (makes things too confusing).

Off-topic comments are allowed, but Caleb will ignore those.

Caleb responds to comments in person, but he only does so on the two most current blog articles.

Related Posts

Begin typing your search term above and press enter to search.