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How to make unhappy customers happy- returns and refunds!
Acknowledge the potential impact of unsatisfied customers
Here is a fact - the majority of unsatisfied customers, possibly as high as 95%, don't
complain at all - they just pack their bags and take their business somewhere else.
These are the silent majority that can kill your business.
Imagine what happens when someone has a reason to complain about your product,
service or business. They may not complain to you but they may well talk about it to
others and bad publicity can spread like wildfire.
So make sure you have a proactive, easy system to capture customer dissatisfactionjust ask them.
Accept that some people will complain and return goods etc.
There are few things worse for a small business owner than to watch your product come
back or for the phone to ring after a sale with a request for a refund. And dealing with
requests for refunds and returns seems to be a waste of money, time and effort to the
novice business owner.
Whether you like it or not, if you are a business owner you'll get your share of
complaints and a certain amount of returns and refunds. It's as simple as that, you
cannot please everyone all the time.
Be grateful for those who do complain
Instead of being upset at customers who complain, be grateful for them. View them as
an opportunity, an important part of your quality improvement process. Customers who
complain can help you find weaknesses in your business that you need to fix. Ask them
the reason for the return and take notice of the detail of the complaint.
Understand ‘Buyer’s remorse
To begin to solve the problem of returns and refunds, you need to start at the root of the
problem, which is the reason why they have asked for a refund in the first place. Most
business owners do not realise that the number one reason for customer returns is not
because a product was faulty or broken, but because of something known as buyers'
remorse.
After someone buys a product, it is not uncommon for them to have an initial period of
being disappointed in some way, with a feeling of doubt and remorse. And this only gets
worse with the size of the purchase.
Reassure your customer that they have made a good choice
Once you accept that some of your customers are likely to experience buyer's remorse,
you need to take some positive steps to help them overcome it. For example, at the
point of sale or very soon after, this could be:
- Including a special thank you note within the product or packaging with your contact
details.
- Sending an immediate thank you or follow-up e-mail a few hours after the sale or the
next day.
- Including an extra surprise gift that they were not expecting.
- Giving them a phone call to ask if they are satisfied with everything or have any
queries you can answer.
These simple steps can often help or reassure a customer who is having post-sale doubts
and feelings of regret about having bought from you.
Know the rules
It is very important that you understand how the law applies in relation to consumer
returns and refunds and, in particular, to your own as well as the consumer's rights.
The Sale of Goods Act 1979 is the key piece of legislation covering consumers' general
rights to return goods or obtain refunds. By law, consumers can claim a refund if goods
are faulty or not as described. The original purchase price must be refunded even if the
consumer returns the goods after the price has been reduced in a sale. You can offer a
replacement instead of a refund, but the consumer has the right to insist on a refund.
Similar rights apply to the supply of services under the Supply of Goods and Services Act
1982.
Make sure you always describe your products well and abide by these rules, fairly and promptly
when a product is faulty.
However, also under the law, you do not have to provide a refund or exchange on a
product (or service) because a consumer has simply changed their mind, for example in
the case of them experiencing post-sale buyer's remorse.
This is where it becomes difficult and causes a dilemma for business owners –what
should you do?
Decide how you will handle the remorseful buyer.
Do you play it by the book and refuse to provide an exchange or refund in the case of a
remorseful return?
Do you run the risk that your customer will spread the word to others that they were not
satisfied with their purchase from you, and even less satisfied with your stubborn
attitude and after-sales service when you refused to provide a refund when they
changed their mind?
In order to avoid negative situations and escalations of ill feeling, many business owners
operate a discretionary returns policy allowing customers to return items within a
minimum period (for example 14 or 28 days) following a sale, even if there is nothing
wrong with them.
If you decide to do this, it is best practice to display details of your returns policy
somewhere obvious at the point of sale. By law, the information must be available before
the buyer makes their purchase.
Whatever you decide to do, even if you publish a returns policy that goes beyond what is
required by law, you are legally bound to honour it.
Remember your reputation - perhaps your entire future in business - will depend on
you doing exactly that.
Taken from ‘Enterprise Quest’
March 2013