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Refunds

For the first time in a year and a half in business, I have had a customer request a refund because he isn't able to get the software to cooperate with his system.  He bought the software nearly 6 months ago.

I feel very abused by this situation.  There is a 30-day trial of the software which could have been used to determine whether there were any compatibility issues.  Plus, 6 months after the purchase is simply too long.

Now, as I have no refund policy in place, I have no real reason not to give this customer his requested refund, and I am going to give it to him.  However, I refuse to get burned twice, and so I've decided to institute a published refund policy.  I want the opinions of the JOS readership on this matter.

I am inclined to say that, since there is a 30-day trial of the software available for free, no refunds will be provided whatsoever.

On the other hand, I realise that this may put some buyers off, and that a 30 or 90 day refund policy would be a little softer.

Keep in mind, as you answer, that most retailers will not accept returns of software once the shrinkwrap has been opened.  By purchasing a license to trialware, you are effectively opening the shrinkwrap.

What do you think?

JT
Thursday, July 15, 2004

Since you're selling software I would look at other software company refund policies and adjust yours accordingly.

Personally, I think 30 days is enough.

Yoey
Thursday, July 15, 2004

"I am inclined to say that, since there is a 30-day trial of the software available for free, no refunds will be provided whatsoever."

I wouldn't do that...  it discourages people from purchasing your software until just at the end of the trial.  If I'm impulse buying, I might buy it in a week.

I'd give 30 days from the purchase date.

Almost Anonymous
Thursday, July 15, 2004

For the first time in a year and a half?  Then you are doing really well - give them 90 days and if the requests are as infrequent as you say as a gesture of good will I would still give them a refund after that period (if you can afford it that is).

Chris Peacock
Thursday, July 15, 2004

Do you know why the customer bought your software 6 months ago and still can't make it work with his system? Maybe you could figure this out, and make him happy, and thus keep his money.

Exception guy
Thursday, July 15, 2004

Money back guarantee will help you more than it hurts you.

And having it in writing would actually give you the leverage to NOT give this guy back his money.

However, I'd probably be inclinded to follow the advice above: find out what the situation is. You may have other customers in a similar situation.  In the end, try to make him happy.


I've finally learned, after 9 years, that you can sacrifice 1% of the profit and cut out 50% of the aggravation.  Got a problem customer, give'm a refund. The exception is the one lady that SCREAMED at me over the phone before I could say a word. Needless to say, I didn't give her a refund (she was past the 30 days).  Hey, 1 out of 4,000 isn't bad.

Mr. Analogy
Thursday, July 15, 2004

> Now, as I have no refund policy in place, I have no real
> reason not to give this customer his requested refund

If you have no refund policy in place, you surely have no reason to give the requested refund.  Unless you think the goodwill makes it worthwhile.

Joe
Thursday, July 15, 2004

"For the first time in a year and a half? "

Read that question again. If this is the only time it's come up in a year and a half, give him the money back and forget about it, you don't need a written policy.

Accept the fact that a certain percentage of your customers will be jerks, don't let it keep you up at night.

Tom H
Thursday, July 15, 2004

JT,

Did the customer simply wait 6 months before contacting you? 

Did the customer upgrade his OS recently from say Windows 98 to Windows XP? If so, does your web page explain which operating systems are supported?

From what I have read so far it doesn't sound like your customer is entitled to a refund. I would just send him/her a nice email explaining why you won't be sending him/her a refund.

One Programmer's Opinion
Thursday, July 15, 2004

The reason stores don't give refunds for opened shrinkwrap is that customers would simply buy the software, install it, and then return it.  Joel's situation is very different because his software is so important to his customers that they likely will want to pay for support if they are actually using it.  And, if they don't get all that much value, who cares if they're stealing it without support?  It's not like a college student would have paid $2K for FogBugz to track his Senior project. 

If the cost of selling the software is minimal (no sales calls, etc.), who cares if 1 in 20 request refunds as long as sales increase more than 5% because of a liberal return policy?  I would be unlikely to purchase software from a small company if the return policy was especially restrictive.

Steve
Thursday, July 15, 2004

How long would it take to say, before refund, to try to troubleshoot it? if possible, make and offer a patch or upgrade? Yes, you may likely spend money on that that you could have just refunded them, but that problem could also be typical stemming from recent upgrades, and you may have more customers with similar problems.

Besides,  even if it costs to you the same or a bit more, there is value in the customer's good will.

"Product X didn't work so I got my money back."

"Product Y didn't work at first, but they were gracious
about fixing it."

(and a lot more in between -- but what's the monetary
value you put on those responses? Good will is an asset)

DEBEDb
Thursday, July 15, 2004

First thing to do is to find out why it doesn't work. If it's a genuine bug you'll want to fix it.

Trying to find out should also let you know if the guy is trying to pull a fast one. It's quite likely he simply didn't get round to complaining, or he doesn't use it too often.

Stephen Jones
Thursday, July 15, 2004

The issue that he is complaining about has been fixed, and everyone else who has applied the fix has found it successful, except for him.

Given the attitude that he portrays in his e-mails, I frankly doubt that he's even using the thing properly, and his dissatisfaction is really his own fault.

But the fact remains, the customer IS dissatisfied, and seeing how he is a singular individual for whom the fix did not work (or who is unable to apply the fix), I think it more economical to refund his money than to try and solve the problem of a single customer with a bad attitude who is not going to be a return customer anyway.  There comes a point where you're happy to be done with the situation.

But this thread is not about that situation, it's about future situations, and preventing myself from getting walked on again.  There are a number of suspicious things about this whole situation, but the loss is so small that I'm not worried about it.  I just want to ensure that I am not in a position to be taken advantage of in this way in the future, but I also want to ensure that I am not taking advantage of my customers.

JT
Friday, July 16, 2004

JT, I think he bought the software on a whim, then used it very rarely, always disgruntled about his hasty decision. And now there is a 'fix' which everyone has to apply and he's using this pretext to try to get his money back.

I say, explain calmly over email (or pay a visit in person) how to install the fix, and explicitly state that this is as far as your responsibility goes. As someone else said, if you have no explicit refund policy, you don't have to refund.

I wouldn't worry about his repeat business: this is not a 'repeat' customer, and you don't want him as a customer anyway. He is probably looking around his house every day for things he could return for a refund.

Alex
Friday, July 16, 2004

On the other hand, people who dislike a product tend to be much more vocal about that dislike.  Giving him the money back (which the OP already said they would do) at least gives him less to gripe about.

Sam Livingston-Gray
Friday, July 16, 2004

Screw him! Show him no mercy!

anon-y-mous cow-ard
Friday, July 16, 2004

Look at it this way - they've just found some bugs for you. Don't give him a refund, but work with them to get the problem solved, even if it means rewriting some of your code. Give them the fixed software for free.


Friday, July 16, 2004

I've only once asked for a refund on software I purchased.  It was a financial-management program for Palm OS that had a 30-day trial...but this major bug didn't show up until the trial was over and I'd already purchased the software.  I worked with the company to install updates and test again, but the bug never got fixed; it had to do with displaying wrong totals and/or crashing when an account had a certain amount in it, say $50.  Obviously a very bad problem in a program of this sort.

So finally after troubleshooting and installing several new versions I concluded it was never going to work properly and asked for my money back.  They refunded it promptly.

They didn't get ripped off, because I haven't used the program since; obviously with its showstopping bug I have no need to.  What they got for the refund was that neither of us had to deal with the other anymore, and I didn't feel a need to go spreading scathing one-star reviews on the Palm OS software sites.  They dealt with me honestly and fairly and I'd consider buying from them in the future.

A certain percentage of people will always be unreasonable, of course, but remember that asking for a refund is really not that enjoyable.  I think that most won't ask for one unless, despite their efforts, your software genuinely doesn't work.  And as others said, I think it's worth doing some troubleshooting if the customer is up for it; but keep in mind that software that doesn't work already costs a fair bit of time and hassle, and the customer may not be up for more.

Kyralessa
Friday, July 16, 2004

If you don't give him a refund then he may get the credit company to do a charge back which is worse really. Just issue it.

We have a 30 day policy but I wouldn't hesitate in offering a refund beyond that period, in fact probably up to 12 months later if it was requested.

Tony Edgecombe
Friday, July 16, 2004

Just a reminder: This thread is not about what to do with the current customer.  That decision has already been made.  The question is about the characteristics of a reasonable refund policy that adequately protects both buyer and seller.

JT
Friday, July 16, 2004

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