Refund is not an unfamiliar term for many businesses. Have your clients ever asked you for a refund? We’ve heard silly refund stories and some complicated ones, but when dealing with your first refund, fret not! You’re about to find the reason why do clients ask for refunds in the first place, how to deal with it and how to minimise future claims.
Why do clients ask for a refund?
Let’s start from the root of the problem. What made clients ask a refund? From so many reasons from unreasonable to valid ones, here are the top three causes that triggered a client to ask for a refund.
- They didn’t get what they paid for
One of the most common refund request case, clients are simply unhappy. They felt that what they asked are not delivered. They wanted carnations, you gave them lilies. They wanted 100 calligraphed seat cards, you gave them printed ones instead. Disappointment and dissatisfaction leads to client claiming for refund.
- You overpromise
You can admit that you sometimes overpromise a potential client to get them buy your service. We’re not saying it’s wrong, but you have to deliver the exact outcome you promised those clients. One thing happen over the other, the next thing you know that client ask for a refund. Thus, when you promise a client of the services you’ll give them, make sure you clearly deliver them to avoid disappointment and worst, refunds.
Responding to refund requests
Don’t panic, keep your cool. You must have gone through irrational refund request, whereby there’s no exact (or simply ridiculous) reason why they wanted their money back. So you should assess the situation and think how can you resolve the issue possibly giving a win-win solution.
Let’s go through a few refund request scenes to give you an idea:
You’re a photographer and you took pictures for an outdoor wedding on a gloomy day. When the wedding’s over, and you’ve sent the wedding album, the client demands a refund because the pictures are too ‘dark’ for her liking. As the weather isn’t something you can have control over and preserving the quality of the pictures is your responsibility, tell her that a refund isn’t possible.
You’re a wedding planner, and you get paid hourly. You received your 50% down payment for your services, and when it’s time to charge the final 50%, you’ve added extra bills for transportation and small items which the clients aren’t aware of. When they only realized after they’ve paid the entire payment, they then ask for a refund. What do you do? Well, if you didn’t inform your clients about the additional costs and still charge to them without their knowledge, then they have the right to ask for the refund. They did not give their permission or agreement about it, so in this case, you’ll have to compensate or return the extra money they paid.
Minimizing future refund claims
To avoid any possible ridiculous or troublesome claims from your clients in the future, we’ve compiled a list of prevention tactics to help get the least refund issues with your clients. Let’s take a look!
1. Make sure to have paper trail
Even to the smallest details like additional placement cards, make sure you have it all written down in a contract. This is so that you have a ‘black and white’ evidence of the items or services you have to deliver to your clients and they won’t get back to you saying you haven’t fulfill them.
2. Clear payment terms
Paying 50% down payment first then 25% D-7 to the wedding day and the rest 25% in D-1? It’s better to have it all written out in the initial contract, signed and sealed with a stamp so both parties – you and your client, have agreed to the said payment terms.
3. Add a refund policy
This is for the best. You may or may not allow a client to ask for a refund but it depends on the situation. Write certain situations where you can and do not allow your client to ask for a refund. Doing so avoids getting absurd refund claims and protect your rights as a vendor.
4. Include a legal clause
Not to make it sound fancy, but it’s always a good idea to insert some real clauses which can intimidate some clients who think they can just ask for a refund for ‘silly’ matters. Consult with a lawyer or look up the government sites to see if there are clauses regarding like ‘force majeure’ and others.
Don’t be shocked to receive your first refund claim or the subsequent ones. It’s normal for businesses to be asked for returns from clients. Share us some of your refund stories, be it silly or complex, what lesson did you learn from it?