We are selling online. We want to give a money back guarantee if the customer does not like our product. However, we're afraid that we may get many returns due to customers misusing our promise. Then, we will lose money for the shipping cost and other charges. How can we avoid this?
Yes, a small % of people will take advantage of it, but the increase in sales you'll have due to the money back guarantee will more than make up for those cheaters.
Note: Don't make it 100% incredibly easy for people to get their money back. Require them to at least write to you about what they didn't like about the product. That will both serve to lower the 'cheater' %, and will also let you intelligently iterate your product design if you see consistent trends in what people say they didn't like.
Also, keep track of the contact info of all the people that requested refunds. If you see that they consistently order products and ask for refunds stop selling to them.