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?
In the supply chain business, refunds are a constant pain. How do you verify the goods are OK, and able to be put back in for resale? It's really important to minimise the desire for refunds.
Now, although this question is for a product, let me answer how I manage the refund question for a service.
Supposing I'm working with someone offering business coaching for several weeks, I'll say something like: "If, during the course of the project, you're not happy with the quality of my work/advice or my ability as a consultant, I'll gladly refund any payments you've made."
Seems generous, but in fact, I'm only guaranteeing the quality of my advice and professionalism. If they decide to ignore my advice, or do something else that is going to undermine their own business, I can't guarantee success.
Also, the guarantee is only during the course of the project, which gives me and them a chance to be very open as we go along, to make sure that I am addressing any concerns early on.
It's a question of showing the client what the next step is, so that they can see what they have to do now, while also keeping in mind the grand vision for their business or lifestyle.