Edge Retail Academy Blog

Keeping the Customer Happy – Should you Refund?

By David Brown
Let’s face it – we hate giving refunds. No one likes handing over money for nothing, especially when it’s a big-ticket item and you’ve already counted the sale as a done deal. It can feel like a real kick in the guts, especially if you feel you shouldn’t have to do it.

We all are faced with this situation from time to time. An unhappy customer or just one who thinks they can bring their custom-made item back just because the relationship ended, or they changed their mind.

There are two things you need to consider in these circumstances – the letter of the law, and good business practice. The letter of the law will deal with your legal obligations and what you must do in order to meet the consumer’s expectations. This is normally clear cut but doesn’t always help in those grey areas where the customer may or may not warrant a refund or is still insistent despite the fact you’ve shown them the law is on your side. You then need to consider the effect on your business – what makes sense for your long term operation.

It’s important to take account of the long-term benefit of the customer at this stage. I’ve seen so many examples of unhappy customers who are refunded and then come back to spend more that I’m more inclined to feel there should be a good reason to not refund than there is to refund. That said, every situation is different and you need to weigh the individual circumstances in each case. With the arrival of social media, it’s become much easier for an unhappy customer to share their experience whether they are right to do so or not and this should be considered.

Whatever way you deal with it, here are some pointers that will help you make it a more positive experience.

· If you refund, then do it promptly. A protracted argument that still leads to a refund will only harm your reputation and the chance of repeat business.
· Look at the big picture. Does it really matter in terms of your long- term business? Will you still be concerned about it in a week? Sometimes you’re best just to move on
· View it as part of your marketing budget. A refund you didn’t have to give can see a happy customer telling others. This sort of word of mouth can’t be bought
· See it as an opportunity. Anyone can look good when things go well – its how you handle customer problems that gives you the best chance to show what you can do
· Make your refund policy clear. Uncertainty leads to frustration and confusion. Make sure your policy is clearly stated in-store and on your website

Thank them for their feedback. An unhappy customer can show you weaknesses in your business. See it as a positive and thank them accordingly.

Avoid being defensive. No one likes criticism but it’s important to realize that it’s not personal and don’t let emotions get involved.

Listen. Customers just want to know they have been heard. They will be more accommodating to your viewpoint if you have given them a chance to air theirs.

Above all do it with a smile. This can be a rare opportunity to make your relationship with that customer even stronger. See it for what it is and embrace the chance to show how good you can be!

 

This blog originally ran in The Retail Jeweler.

One response to “Keeping the Customer Happy – Should you Refund?”

  1. Rick Borchert says:

    Have you seen your sakes people run or hide when they see your customer come back into the store carrying your gift bag? Instantly think refund.
    Consider this as a sakes opportunity to get your customers what they really want and turn the return into an exchange or even an upscale!

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