Refunding a customer who has already paid for a good or service is perhaps one of the most contentious and inflammable topics for any business.
And from some of the things I see online, I’ve come to the conclusion that a lot of you business owners have no business running a business.
Because why does returning a customer’s money or giving a fair exchange suddenly become a battle, especially if you haven’t kept to your side of the transaction?
I mean, it’s probably easier for big chain businesses or stores to make a refund, but for smaller businesses, it can become a sore point because every refund feels like you are leaking money.
I understand that. But a customer’s money does not automatically become your money simply because it has entered your account.
In the eleven years since I founded Fabrics by The Captain’s Daughter, we have luckily had to make very few refunds. But when the need arises, we are always quick to offer a refund rather than insist on a replacement, because I do not want any single part of my hard work or business integrity tainted.
One of the first cases involved a long standing customer. She bought a plain stretch silk lining and returned to the shop the next day because she had taken it to her tailor and discovered it was the wrong colour for her dress.
Her intention was simply to exchange it for the color she wanted.
We exchanged it immediately, no questions asked, and destroyed the one she returned.
That has always been a foundational rule. If anyone takes a fabric out of our store and returns it, we are never going to put it back in the store. We destroy it, no matter how expensive it is.
The second occasion was perhaps the trickiest.
A new walk-in customer came into the store and bought a silk fabric. She chose what she liked, it was measured and cut, and she paid for it. This was on a Friday.
The following Wednesday, she came back saying she had changed her mind and wanted another fabric.
Then she brought out the one she had bought.
We had never seen a fabric so maltreated. It was rumpled. It was dirty. We refused to even take it from her and told her to take it away since, even if we accepted the return, we were going to destroy it anyway.
Instead, we offered her a refund.
She refused. She wanted us to take back the dirty fabric and give her a new one.
We refused and issued her a refund.
We later found out she was a competitor’s sister.
Sometimes, you can be completely within your rights to refuse a refund but decide that keeping someone’s money is simply not worth the aggravation, the reputational risk or compromising how you want to conduct your business. This was one of those times.
As long as you are in business, things will happen. Customers will change their minds. Mistakes will be made. And yes, some customers will be unreasonable.
But my problem is with businesses that deliberately advertise things they do not have in stock, send customers something completely different and then, when the customer complains that what arrived is not what was advertised, announce:
No refunds.
No what?
Who gave you all that audacity?
What makes it okay to keep a customer’s money when they have a genuine complaint?
Granted, some customers can also be dishonest, purposely asking for a refund after using or damaging the goods.
And that is exactly why a clear return and refund policy should be established by every business.
There should be conditions. There should be timelines. There should be a clear line between what a business will accept and what it will not.
A Refund policy should also protect a business from unreasonable demands, but it should not protect a business from its own bad behavior.
There is a difference between a customer changing their mind and a business failing to deliver what the customer paid for.
If you advertised silk and sent me polyester, “no refunds” is not a policy.
And if you took my money for something you never had in the first place, returning that money isn’t even good customer service.
It is simply the right thing to do.
Perhaps that is where the refund argument should really begin. Not with whether businesses should always refund customers or whether customers are always right.
When a transaction goes wrong, perhaps the first question should be: who failed to keep their end of the transaction?
Sometimes, that will be the customer.
And sometimes, dear business owner, it will beYOU.
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