How To Reduce Refunds With Five Simple Strategies

Looking for a way to cut down on the number of refunds you give out? There are several strategies that you can implement.

While refund requests are as inevitable as death and taxes, there are a few ways to reduce the number of customers who are throwing in the towel when it comes to your product or service. 

No matter how hard you try, not everybody will fall in love with your product or service the first time. And even if they do, there are lots of other reasons people request refunds rather than they didn’t like the product.

  • Their financial circumstance has changed.
  • They purchased the incorrect product.
  • The original purchaser moved organizations.
  • They are suffering from buyer’s remorse.
  • The project they were using it for was cancelled.

These are all scenarios we have had direct experience with. Project abandonment is a particularly common one. It’s also common that we receive extremely positive feedback about our products ahead of the refund request as we rarely give refunds based on the merits of the products alone.

Refund requests are a natural part of the customer journey. And unlike what most people believe, it does not have to be the end of the customer journey.

In the post, we will talk about how you can mitigate refunds, reduce them, and also how you can ensure a refund is not the end of the customer journey.

Make sure your Refund Policy is clear & visible!

While some businesses try to bury their policy, we post our refund policy in as many places as possible. 

At Groundhogg, we have a 14-day money-back guarantee policy, and we make sure that it is easy to find at all times. In fact, it’s on every single page of our site.

  • On the pricing page above and below the pricing options.
  • On the individual product pages alongside the product description.
  • In the site footer on every single page.
  • On the checkout page above the buy button.

Having your refund policy readily available accomplishes a few things that will increase your chances of making a sale.

  • It establishes trust, it’s proven that companies which make their terms clear are more trustworthy than those who do not.
  • We live in a buyer-beware economy, buyers like to familiarize themselves with reputable organizations.
  • People are more willing to buy with a refund policy available because they know they can request a refund if they are not satisfied with the product.

What kind of refund policy is best?

Well, it of course depends on what you’re selling. Creating a policy for a product company is much simpler than for a service company.

Here are a few suggestions to get you started.

  • The simpler, the better. Customers do not want to read hundreds of lines of fine print to learn whether they qualify for a refund, if your policy is confusing, kiss that sales goodbye.
  • Set time limits on your policy, 14-30 days is what we’ve seen work well.
  • The “no questions asked” policy is a surefire way to coax a sale through. If you place a lot of conditions on a refund you risk making it seem too difficult for the customer to seek recourse.

Feel free to look at our refund policy for inspiration!

A stellar refund request process is essential!

A refund request process is the system that your customer has to go through to request their money back. I think a lot of companies make this process too short, or too complicated.

If your process is a simple form and a subsequent refund, while effective at getting customers their money back, you are limiting yourself and your sales by not offering the customer alternative options to a refund.

On the other hand, making it too long and complicated will ensure a 1-star review from a dissatisfied customer!

The most effective process is somewhere in the middle, not too short, but not so long that it would upset the customer.

Groundhogg’s refund request process:

We start by asking the customer to review our refund policy. We do this because the customer can often qualify, or disqualify themselves from the refund process by double checking that their purchase matches the required conditions.

Letting a customer discover that they don’t qualify on their own will be a more positive experience than telling them they don’t qualify over an email.

Once the customer clicks the “Request a Refund” button, they will be brought to a page that asks them to choose a reason why they are cancelling.

The options that you have may look different depending on what product/service you are offering.

At Groundhogg, we have 6 different options:

  • Cost
  • Difficulty of Use
  • Missing Functionality
  • Using Another Product
  • Not Using It
  • Something else

Depending on the answer, the customer is then sent through a series of questions.


If it has to do with money, we first let them know that we have other pricing plans. Maybe it would be more beneficial for them to downgrade (or upgrade) their plan.

We also asked what price point would change their mind, it’s great feedback to have on our end.

Difficulty of Use

If it’s a problem with using the product, Groundhogg makes sure the customer has some options before jumping ship.

We make sure that they have the option to contact support or schedule a 1-on-1 with a WordPress expert.

If none of that sounds appealing, we make sure to ask what they struggled with before continuing with the refund process.

Missing Functionality

This window just lets us double-check and see if Groundhogg can perform the function that the customer needs. It allows them to book with us to talk about it.

If not, we ask them what function or feature was missing from Groundhogg.

Using Another Product

For customers who are looking to use another product, we first remind them what makes Groundhogg so unique, as well as offer them some additional support.

This includes a link to send an email to our support team and our phone number to chat one-on-one.

Before requesting a refund, we also ask what product they are switching to or already currently using.

Not Using It

For customers who just aren’t using Groundhogg – we give them the resources to start! First, we list all of our YouTube educational content and we also give them an option to book a one-on-one meeting.

If not, we ask them why they have decided not to use Groundhogg.

Something Else

For the “something else” button, the customer is simply asked to give us a brief reason why they are requesting a refund. If there is something we feel we can do about it, we’ll be sure to get in touch to help.

At the end of every journey, no matter what the reason, the customer will then see one last screen that will remind them of everything that will happen after getting a refund.

Groundhogg also gives them a promise that if they re-activate their account in the next three months, they will be able to recover their current rate.

Never slam the door in the customer’s face!

A lot of businesses treat the refund process like it is the end of a relationship with a customer when often,  it can be just the beginning

If you provide the customer with a good refund experience, they will leave with a pleasant taste in their mouth and will be more inclined to come back if they ever need your product again for a different situation.

If you make it hard to receive a refund, don’t email back etc. it leaves a bad impression, and the customer will feel motivated to never return and trust you with their money again.

At Groundhogg, about 15-20% of those who have submitted a refund request have repurchased the product in the next three months. 

Send a Hail Mary email!

Depending on your service, you can send the “Hail Mary” email to customers who have requested a refund.

Tell the customer that if they change their mind and want to give your product another shot they can use a discount code on the next purchase. 

Put a time limit on this discount code (like within the next three days) and make sure the code is only for the first year or first billing period. 

Example of a Hail Mary email.

Strategies for Refunds- Overall…

It can be counterproductive to make the refund process difficult, it can also be counterproductive to make it too short.

By implementing an essential refund process you can both mitigate refunds and increase the possibility of a returning client in the future.

You can build your own refund process with Groundhogg.  

To get started with Groundhogg, you can:

Picture of Adrian Tobey

Adrian Tobey

Adrian is the founder and lead developer of Groundhogg. He believes that marketing automation should be simple and accessible so any business can use it to grow.

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