#55 - Do you need to offer money-back guarantees (and what should they be?)

But you don't have to offer a refund. Someone comes back and goes, I bought this, I changed my mind. Or I bought this and it wasn't quite right for me after all.

This is the Doing It Online podcast with your host, serial entrepreneur 6 and 7 figure funnel strategist and super nerd Kate McKibben, where every week we're here talking nerdy and sharing the things that actually work to help you do what you do online. But better, easier, and with a ton more profit too. Are you ready? Let's do it.

Hello, hello, guys. It is Kate here from HelloFinals co. And welcome to episode number 55 of the Doing It Online podcast. And today we're going to get real practical. We're just going to go dive straight on into a really common question that I see come up a lot with clients and with anyone who has an online program. And I, you know, I see sort of both sides of the fence of this thing. So I wanted to just go straight for it. And that question is, do you need to offer a money back guarantee? And if you do offer one, what is the best way to do it? So a little bit of background on this for you guys is, and this is just from, you know, sort of my perspective of being in the industry of since 2007 is there used to be this trend, right, with the money back guarantees that the purpose of reason people started offering them and they have crazy ones like lifetime money back guarantee, 90 day money back guarantee, all of this stuff. And the reason that they did it, and this is like coming really from the total bro marketing kind of camp, is they did it to make more sales. So they offered it and they did it. Like you'd hear people talk about it like, yeah, you offer one, it's so long, people just forget about it and they never even take the program. But they feel, you know, secure because they've got this money back guarantee, but then they forget they even bought it. And that always just felt icky to me. Like, I've never thought you don't add these things in to trick people, right? To manipulate people. You add them in if they make sense. That's the background. And that's why everyone there sort of became this thing of people offering money back guarantees on something, which traditionally I don't think you would because, I mean, if you think about it, and I'm obviously I'm in Australia, so I'm talking about Australian commercial law and stuff here, but you're in Australia, you don't have to give a Guarantee for change of mind. And that's a lot of what this comes down to. Yes, you have to offer. Sorry, I mean you don't have to give refunds just for change of mind. I know in America that it's a lot more loosey goosey with the refunds, particularly in retail situations. Like I was amazed with what you can get a refund for over there when I visited before. But in Australia you only get refunds if something breaks or if it's not as advertised. So that means if someone says this is going to be this amazing yellow lunchbox and then you buy it and it's a green lunchbox and you come back and I said it's supposed to be yellow lunchbox, I bought a yellow lunchbox, I'd like my money back. You don't have to offer refunds because people get at home and they go, oh, this doesn't fit. You don't. You can, we can offer a lot. Generally Australia, they offer store credit. Obviously we're talking about physical products so it's different. But you don't have to offer a refund if someone comes back and goes, I bought this, I changed my mind. Or I bought this and it wasn't quite right for me after all. The onus is actually on the purchaser to ask the questions, to do the research to make sure that they have the information they need when they purchase. Because it's not a given that if they get in there and they go, oh, you know what, I didn't read the sales page. This says it's for advanced people and I'm a beginner. Oh damn, that's just kind of, I said that, that's background. So where my sort of personal perspective on this is, like I said, I don't think you should add in a money back guarantee just because you think it might trick people into buying. I never think that's a good idea and I don't think, think you should add one in if it doesn't feel good. You know, there's, there's lots of moving pieces around here. We personally, and I'll, I'll tell you what, our policy is, is basically anything that has no time commitment from myself and my team, we usually, we are happy to offer a money back guarantee on because yes, people, you know, they can purchase something, they can log in, they can access it, they can't return that knowledge. Like that's the other thing with, with an online product. It's not like they've just gone and bought socks guys and they take the socks home and they go, actually, I've changed my mind, I don't want these socks anymore. And they can bring them back into the store and they can sell them to someone else. When they, when they purchase a digital product, they usually can dive in, they can watch videos, they can learn, and you can't remove that knowledge from them even if they say they haven't looked at anything. Like you don't, you know, there, there's two sides to why you wouldn't, would or wouldn't do this. And one is yes, making sure it's a great experience for your customers and potential customers. And the other is making sure it makes sense for your business, protecting your Internet, your intellectual property and protecting your team and your energy. So it really, I think, comes down to a personal choice and I'll sort of walk you through some of the pros and cons and like I said, what we do and hopefully that will help you to just make a decision that feels good for you and that makes sense for you. Like I said, sorry, I've kind of circled around here. Like I said, our current, our policy is that if, you know, for any product that we offer that has no, like I said, no time commitment of myself on my team, we are happy to offer a, you know, have a, you know, seven day or 14 day money back guarantee policy. And the, really, the only reason I do this is because usually those offers actually, you know, they're like, they're like a $27 slo offer or something like that. And we know that the content in there is worth hundreds of dollars more than what the price is. So it's not a matter of people going in there and going, ugh, this, this is no good. That's not why we offer it. We offer it because I don't want my team having to waste time going back and forth with angry, you know, people who are angry because they've bought something and you know, they've decided that they, they, they want to have a refund and that, you know, now they can't get it and now they're, and they're mad about it and they're going to take it out on my team and it's just not our policy. And weirdly enough, the people who purchase those lower priced offers are more likely, in my experience, to be those people to be the people who had some crazy hikes, crazy ridiculous expectation for a $27 offer. And then they get in there and even though it's worth, you know, 300, 400, 500, they're still like it's not enough or they didn't read it properly and they get in there and go, oh, it's too advanced or whatever the reason is, right? Everyone's, everyone is allowed to have their own opinions on these things. But for me, I think that it's just not worth my team's time to have to be defending our policy on that. In those rare instances we don't have many of them, but when they do come up, they're rare. So that's why we go, okay. So that what work makes sense for us is to be able to offer, you know, a money back guarantee on those lower priced offers because then it is effortless for my team. People email, in you go. Yep, no worries. Refund bang. Thanks. You know, hope you have a great. Wish them all well, send them on their way. Where we don't offer money back guarantees is when it is stuff that does involve our time. So when we have coaching calls, when there is a Slack group or a Facebook group where they can ask questions, get support, when you know, we have our team who are actually in there providing accountability or following up or any of that stuff, as soon as any of that stuff happens, it's a hard no because we can't give back your team's time or yours. And usually those ones as well, they're sort of our high level offers and we want to be able to create the best experience possible for people who are purchasing those high level offers. So we don't want to be forced to have to drip stuff out to protect ourselves from the people who are going to come in, go through, download everything in the first week and then turn around and ask for a refund. And sadly there are those people out there again, they are the minority. But you know, as someone who's livelihood relies on, you know, this knowledge being, you know, behind a paywall basically and you know, these, these templates and these things that you spent hours and hours creating and learning and perfecting and you know, the, to be able to feel really secure or as secure as possible in that I think it's very reasonable to be able to say no, sorry, you know what if you purchase something and you're getting access to stuff that's super, super valuable, you can't give it back. I can't stop you from, you know, ripping it and taking it and selling it somewhere else. So I'm going to protect my business and my energy and I'm going to say that that's a no. So that's why we've Kind of come up with that now for those of you. And again, everybody's market is different, everybody's business is different, price points, all of that stuff. So you have to think about with this, it has to make sense for you, has to make sense for your customer. Traditionally, my customers, they're pretty savvy, they're here, you know, they understand the online marketing world because they're in it and that's what they're wanting to learn more about. So I find that they're a bit more of an advanced customer anyway and they're not as scared of, you know, someone ripping them off on the Internet if they, you know, and we put a, spend a lot of time building trust and providing great free value. So most people who come in and decide, who want to work with myself and my team, they have that trust. They know we're not going to, you know, do a runner on them. For other people's businesses, particularly if you're going out to cold traffic, it might just be that your audience is a bit shy about investing, a bit scared they may need that extra reassurance. So in that case, if it does, if it is going to make a really big difference, if people are like they're just flat out not going to buy without that extra bit of reassurance, then you have to say, okay, well, if that feels, if that makes sense for me, if that makes sense for my business, okay, we will offer a money back guarantee. But I strongly encourage you again to try and put some things in place that are going to protect you and your assets. So in those instances, don't make them like 30, 60, 90 days long. Keep them short. Seven to 14 days is plenty of time for someone to be able to get in and get a sense of whether or not this is actually for them. And in doing that, I would definitely as well would encourage you to drip feed out your content so that they get access to one or two modules of your program. Probably no more than 20%. And again, that's plenty of them. There's plenty for them to be able to tell if they, you know, if it's right for them or not. But it, they're not going to be able to jump in, like I said, download everything, copy, paste everything and then turn around and ask for a refund. So it just gives you that extra level of, of protection. So there's lots of other little nuances, guys, but I think those really are the main ones and hopefully that's given you a, a good sort of sense check on the, you know the why they exist, where they've sort of come from, what your sort of own really obligations are. Now I would just, you know, put a little caveat in here. Obviously everyone's the country you are in may have different legal rules than the country I'm in. So obviously make sure you double check those things first. But as a general rule with online products it's you don't have to. It's just about making that informed decision and making that decision which is the right thing for your business. So if this has been useful for you guys, make sure you let us know over at hellofunnels on Instagram. We'd love to hear from you. Share this with any friends you think might be stuck pondering on this issue themselves or leave us a review. We love reading what you think about this program. And in the meantime guys, I'll see you next week with another value packed episode. Have an awesome week, keep doing what you do and I'll see you all online. Bye.

Thanks so much for listening to the Doing It Online podcast. If you love this episode, don't forget to subscribe and leave us a review. And if you're ready to take your online course sales to the next level with your own six or seven figure funnel, let Kate show you exactly how today@6StealMyFunnel.com.