Blog Friday Q&A

Friday Q&A: Should SaaS companies offer refunds?

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Every Friday, we’re answering your questions about business, startups, customer success and more.

Happy Friday!

This week’s question is:

I’ll answer this question in two parts.

First, we do do refunds, within reason, and probably a bit beyond.

As a customer service software company, we commit to doing support really, really well.

If we screwed up, a refund is a small price to pay for the long-term benefits of making a customer happy and demonstrating a deep commitment to getting things right.

And if we didn’t screw up but a customer decides that the product isn’t for them, we’re still likely to refund them if they ask nicely. Doing the right thing, even for someone on their way out the door, will pay you back in the long-term.

With that said, let’s assume this question is about customers who are asking for unreasonable refunds.

In that case, while this approach may be different from what others would do, here’s my advice:

  1. Simply tell them: “Sorry, the clearly stated refund policy is that only customers who cancel within 30 days [or whatever your terms are] are eligible for a refund.”
  2. If they give you trouble, hound you with lots of emails, or complain about it on social? Give them the refund.

Yes, I know.

It’s giving in. Giving up. Letting the “bad guy” win.

But you know what?

You’re building a business.

You have more important things to worry about than this one customer’s complaints.

If dealing with them is going to continue taking up more of your valuable time, then issue the refund and get rid of them.

Forget about the money you just lost, and focus on dedicating that freed-up time and energy to making it back ten-fold.

I’m curious: what would you do in this situation? Let me know in the comments!

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About the Author

Alex Turnbull is the CEO & Founder of Groove (simple helpdesk software for small businesses) who loves to build startups and surf.

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