Money Back Guarantees - Do they work? Do you need one?

So how do course guarantees work and should you offer a guarantee with your course in the first place? That's what we're going to discuss in this video. Clients ask me all the time, Lauren, do I need a guarantee? You know, what is the purpose of this? So I just want to give you the quick definition of what a guarantee is. A guarantee is a promise or assurance often in writing, that something of, is of a specified quality content benefit or that it will perform satisfactorily for a given length of time. So on my courses, so I'm mainly a guitar teacher, you see my guitar in the background, so I teach guitar. Okay. And most of my courses come with a money back guarantee. All right? We usually do a 60 day money back guarantee. Now there's options. You could do a 30 day, you could do a 60 day, you could do a 90 day, you could even do, you know, a 360 guarantee. It's really up to you and how you want to structure your business. So originally we started with a 30 day money back guarantee. But you know, as a guitar teacher I was like, you know, I could help, really help someone get wins in 30 days. But if someone uses my product for 60 days, I feel like they'll see a lot more progress and they'll be able to more adequately judge using my product whether it's working for them or, or not. Okay. And all the guarantee does for us is it ensures people that we're going to take a little bit of risk, all right? We're going to take the risk off of them. They can spend the money and if they're not satisfied, they can let us know. And this brings us to another part of guarantee. So you could have a no questions asked guarantee or you could have a qualified guarantee. Okay? So I know questions asked guarantee is someone comes in, they buy your product and for whatever reason, they're just like, I want a refund. Okay? They're within, you know, the 30, 60 or 90 days, whenever your refund period is. And they say, hey, I'm going to use my 30 day money back guarantee. No questions asked. You don't need clarification, nothing at all. So for us, most of the time we have a no questions asked guarantee. On my courses they're only 2 97. So it's really, you know, that not that expensive. But I do know people who have courses that cost a little bit more money, you know, in the 2000, $3000 rang and they have more of what we call a qualified refund or qualified guarantee, saying if you Use this program and you know, you watch all the videos. All right, so there's some, there's some qualifications. You do all the materials, you attend all of the coaching sessions and you send us your homework, we will refund you. So they basically want you to show that you've done the work to actually qualify for a refund. So that is a what I would call a qualified money back guarantee. Okay, we'll give you your money back, but you have to prove to us that you actually did the work and that it really didn't work for you for you to get your money back. Okay? So those are kind of the two options now for me with my coaching programs. So I have a 12 month mentorship program and it's $3,000 and people get to work with me for a full year. And you know, we coach on stuff like courses and YouTube and stuff like that. For me, I have a no refund policy. And it says on my checkout there are no refunds for this program because there is a live component, meaning I'm doing live coaching with them, okay. And they are, you know, getting all the courses, they're getting all the materials right away. So I don't offer a refund. And the reason I do this, because I want people who buy my coaching program, I really want them to be in the coaching program, okay? Because if, for me, if someone's starting a program and they're already thinking about the refund, they're already thinking about that this isn't going to work for them and they're already thinking about backing out. So I want people in my mentorship and coaching program that are 100% in. So in that particular case, but you have to be upfront about it, there are no refunds. It has to be on your landing and sales page. It has to be on your checkout page due to the content of this course. And because there are live sessions, this program is non refundable. Okay. This way, you know, if someone does a dispute, because I fought a number of disputes in PayPal, sometimes on the guitar side where people say, you know, they bought something and they didn't get it, I sometimes will reference our refund policy, I will reference different things on our sales and landing pages, and I'll also send them screenshots in the Kajabi platform of people having access to the courses so that we can dispute these claims that, hey, I never got the program, okay? So for us, for me and my guitar business, it's more about, we just want people to be happy with their purchase. So for us, you know, if I have to refund people, it's okay. And our refund rate runs anywhere, I would say from like about 5% a month is. Is what we're refunding. So if we did, you know, $10,000 in sales, what's that like, you refund $500? Yeah, I just double checked. It's $500. Okay? So if I did $10,000 in business and I have to refund 500, it's really not a big deal. And I give my team the power to say, hey, listen, if someone wants their money back, just give them their money back. Because I'm not in the business, at least not in my guitar teaching business. I'm not in the business of giving people life lessons and teaching them about personal responsibility and all this other stuff. It's a $297 course. If they're not happy with it, just give them their money back. Because if we don't give them their money back, they're going to be more unhappy with us. They're definitely not going to like my brand at all. So my goal for my business is that if someone's not happy with my product or the purchase they made, I want them to have their money back. I don't want them to be unhappy. Okay? So for us, it's more important to just refund and move on. Let's not waste time and energy teaching people life lessons. Let's give them their money back and let's move on with the things that we do in our business that are very important to make us more money. So we're not worried about the 5% loss. We're more focused on earning more money. Okay. In the long run versus focusing on those refunds. Because honestly, just so you know, refunds are just part of the business. I know in the beginning, when you're not making a lot of money, refunding someone is like, I really don't want. Because you need that money in the beginning. Like, you might need that 297. But in the long run, just doing the refunds is save you a lot more time and energy. Now on the qualified purchases, you can push back more and you can reference your checkout, you can refresh your landing page because it's the buyer's responsibility, it's the consumer's responsibility to read these landing pages and you can say, hey, you know, awesome. Yes, we're more than happy to give you a refund per our policy. Could you send me in the homework PDFs that you did. So I make sure you did the work to qualify for this refund. So should you offer a guarantee, it's really up to you and your business. I think it's a great idea because it takes a lot of the risk out of the consumer's hands, you know, for people who are kind of like on the fence. Is this going to work for me? Could this work for me? I don't know. Offering a money back guarantee can get some of those buyers off the fence and purchasing and it's really not a lot of risk for you to do that. To do a 30, 60 or 90 day guarantee. I kind of like to go a little bit longer because the more time you give people, the more likely they're going to forget about the guarantee. But for me, I settled on 60 days because I thought 30 wasn't enough for them to truly get a feel for, for what I could do for them as a guitar player. And then 90 felt like a little bit just too long. So 60 is where we ended up. And it's a no questions money back guarantee. If you don't like it, just email us, tell us and we'll give you your money back. Now, if you're curious about what you should be charging for your course, I highly recommend that you go watch this video right over there where we discuss different types of course pricing and what that means for you and your time.