Why money back guarantees?

[Promaginy]

Many indies offer 30 and 60 day money back guarantees. This makes lots of sense when the product is not known to the customer. They obviously feel they can buy it knowing full well if they don't like the game, they can get their money back. It is smart marketing.

But why offer it when the customer gets to play a demo of the game? Is it not reasonable to assume that the customer had full opportunity to trial the game before they purchased it?

Any sense whether the gurantee generates additional sales? Is it worth the potential work if a customer wants their money back?

Regards,

[Sybixsus]

It's fairly simple really.

#1 : It looks good. It gives customers confidence. It tells them that you're confident in the product. It tells them that they can change their mind if they find out that your registered version offers too few additions to the shareware version.

#2 : You don't lose much. People are generally quite lazy and forgetful, so even if they plan to ask for a refund, they often don't get around to it. ( Been guilty of this myself ) And most payment providers offer this option anyway, so you're only advertising something they already have. In fact, any online transaction can be disputed with the credit card company, and without written evidence, your payment provider will give it to them anyway.


So you gain trust and lose very little. Why not do it?

[Sillysoft]

I currently do not have a money-back guarantee. I recently did some testing and determined that the vast majority of hits to my Buy Now page do not turn into a sale. I assume that this is normal, but I have been considering adding a shiny guarantee notice to that page.

[Jonas]

Well the basic thing is this. When you have a Dollar in your wallet anything that would make you feel more safe that you won't be ripped off, the more likely you will hand it over for a product you are thinking about buying.


The reality is that most folks have a 60 day charge back period from their credit card processor anyhow.

I know that it FEEL uncomfortable having a money back guarantee, but really you won't hardly ever need to give one out.

Folks will rip you off whether or not they use the money back offer or not. If you don't offer one, they can use charge back their card, then you get take the loss AND the charge back penalty :)


Overall, ( and probably someone has some stats for you) we don't see any abuse and it's probably made for some more comfortable purchases.

Like ya say, if you have a good demo thats where you have the most to gain. But you're unlikely to have any ill effects at all from offering a money back policy.

Thats my advice, it's worth what ya paid for ;)

[mahlzeit]

This is one of those things you can't do anything about. If people want their money back, they will get it anyhow (through their bank or credit card company). So you might as well turn it into an advantage. The key to selling stuff online is to reduce risk for the customer. Having a money back guarantee is an excellent method for this -- and it doesn't cost you anything. :)

[Mike Boeh]

If someone was unhappy with one of my games, or couldn't get it to work, I would certainly give them their money back- so why not say it?

[cliffski]

i disagree. if you rent a movie and then try asking for your money back because the movie sucked, you don't get very far. why should games be any different. I'm running a business, not a games library. if people don't like the demos of my games they shouldnt buy them. as far as I am concerned, if they order the game, they get the game, end of story. Its not like there isnt an opportunity to test the demo.
I very very very rarely give any refunds, and then only when the game seemingly won't run on a particular system.
try emailing sony, tell them star wars galaxies is crap and you want your money back.
good luck.

[Mike Boeh]

To me, what your video store or Sony do is completely irrelevant. I only care about what my company does and how I deal with MY customers. I want to treat them with the utmost respect and I want them to feel completely comfortable buying a game from Retro64. I respect their honesty just as they respect mine to deliver a game that gives them hours of enjoyment. If a few bad apples want to take advantage of the rule, so be it. I know that in the long run I will generate loyalty and plenty of repeat purchases that more than make up for the tiny amount of refunds I receive. It sure beats haggling and getting all frazzled about a measly 20 dollars :D

[Sybixsus]

Who do you use as a payment provider, Cliff? I don't know of any payment providers who won't refund automatically if a customer tells their credit card company they didn't buy your game anyway. If people can get their money back anyway, I don't really understand what you are losing by making it official.

[svero]

Offering a money back guarantee makes perfect sense for me.

1) It makes the customer feel safer about making a purchase and may convince some people to take a chance and buy
2) It has little or no drawback

#2 needs some explaining. But basically refunds are so rare that they aren't worth considering in terms of money loss or time spent. As far as fraud customers go.. people who buy intending to cheat my system. There's been no indication that its happened in any way significant enough to warrant spending more than a micro-second of thought on. If someone cheats me..so be it. All the evidence says the benefits far outweigh the gains.

[tewe76]

One question:
suppose i go to a shop, i buy a bike, go back home, try it, i don't like it, go back to shop, give it back and they give me back money.
then, if someone purchases my game, he doesn't like it and ask for his money back, should i ask him to send me the exe file? should i tell him to delete the file? should i simply return his money and say "i'm sorry you didn't like it"?

[svero]

if someone purchases my game, he doesn't like it and ask for his money back, should i ask him to send me the exe file? should i tell him to delete the file? should i simply return his money and say "i'm sorry you didn't like it"?

In my case I just trust them. Someone could cheat you and it does ocassionally happen, but for myself and most of the other developers I know it's so rare that it's not worth worrying about.

[mahlzeit]

You can also have them sign a Letter of Destruction (LOD) before you give them the refund. Basically, you make them promise to delete the exe and no longer play your game.

[EpicBoy]

When I was selling games, I offered a money back guarantee and exactly -1- person took me up on it in the 2 years I was selling. Honestly, guys, it's not a big deal. It gives the customer an out should the game not work on their system or they just plain change their minds ... very few will actually act on it.

The good it achieves FAR outweighs the bad.

[Andy]

The answer on topic: why not?..

The comments: I got the recommendation from Mike, Steve-svero and Patrice at a time by year ago to place it onto our site and order form and used it. I got one refund request in a year. From lady on social security who felt pretty bad and wasn't able to play our pinball any more because her health problems. Thanks to God she felt better some time later. She returned and asked if she can order our game again. I left our previous version to her as our gift. That's a story and supposedly all you need to consider to use it.

[Greg Squire]

i disagree. if you rent a movie and then try asking for your money back because the movie sucked, you don't get very far. ...

I did that once with a movie that really bad, and do you know what? The good people at the store said "sure", and I was able to get a better rental. I also went back to the store with an hour of renting it, which I'm sure helped. There are some companies, even in those industries, that realize that it's better to keep your customers happy (especially in the long run), than to worry over some small losses. If you keep your customers "warm and fuzzy inside", then they'll come back to you again (and sometimes they'll bring their friends ;) ).

[GBGames]

I did that once with a movie that really bad, and do you know what? The good people at the store said "sure", and I was able to get a better rental. I also went back to the store with an hour of renting it, which I'm sure helped. There are some companies, even in those industries, that realize that it's better to keep your customers happy (especially in the long run), than to worry over some small losses. If you keep your customers "warm and fuzzy inside", then they'll come back to you again (and sometimes they'll bring their friends ;) ).

I used to work at Jewel-Osco. For those not in the Midwest of the US, Jewel is a major grocery chain. Anyway, I worked at the flagship store in the hometown headquarters, and the policy was that the customer comes first. Coupons for groceries have expiration dates on them, but we were encouraged to ignore them. Customers were never surprised that they had to pay more due to the coupons being invalid. There was a guarantee that the scanned price would reflect advertised sales, and the only people that got pissed were the people who thought they should get it on items not part of the guarantee, like deli meats and liquor.

I will definitely put up a guarantee when I have something to sell.

[dan]

Comparing our industry to other industries on "Money Back Guarantees" isn't very useful. There's a guy I know who handcrafts harpsichords. Completely custom work and expensive. God only knows what shipping is on one of those things.

In his line of work, a money back guarantee is completely out of the question.

For downloadable games? Hell yes! As others have mentioned, it's not going to cost you more than a pittance. The demo ensures that. But the benefits are wonderful!

Think about it. After getting exposure, the toughest part of our business model is to close the deal on that Buy button. There's no box they get to take off the shelf and hold in their hands. The phrase "Money Back Guarantee" has magic in it. It's a last little push when they teeter on the plunge.

There aren't a lot of edges we have in indie gaming, but low risk, low cost money back guarantees are one of them. Take every advantage you can get. No brainer.

Listen, I can understand the argument that a customer should know what they're getting because of the demo, there's no reason to provide a guarantee, a couple of guys are taking advantage of you, yadda, yadda. That's a "fairness" argument and you may have a point.

But you're completely missing the real issue. You're in business to make great games and to make money. A guarantee is a money maker. Risk vs. reward. Business 101.

[DFG]

Some people will definitely take advantage of you. Test different guarantee lengths to achieve optimum mix of maximum sales and minimum returns (net). Salt to taste.

[EpicBoy]

But that "some" is, in my experience, so remotely small it doesn't matter.

Do you have evidence of "money back guarantee" mobs running crazy over indie sites or anything like that? I seriously doubt that it's a real problem more than an imagined one...

[Mark Fassett]

Well - if a guarantee can save me from a customer initiating a chargeback, there's no better reason to have it, seeing as how the chargeback fee eats my profits on another copy as well, so a chargeback is as good as losing two sales.

[Davaris]

I was wondering how you can give a customer's money back at RegNow. Is there a section devoted to it? I don't want to email them and have to wait a week for their response. ;)

Also does anyone know where I can get one of those money back guarantee gold labels? Is there a free one out there?

[Andy]

I was wondering how you can give a customer's money back at RegNow. Is there a section devoted to it? I don't want to email them and have to wait a week for their response. ;)

Also does anyone know where I can get one of those money back guarantee gold labels? Is there a free one out there?

RegNow - when you will get your first order there Davaris... :D you could open it and choose the Actions tab there - it should be "refund this order" option there...

Gold labels - steal one from some site change the color a little bit and write the texts by another font... :D
(REM: Guys! Don't check our site! We are not thiefs - that's why we got no any golden labels - nobody can make one in-house ;-) )

[Davaris]

>RegNow - when you will get your first order there Davaris... you could open it and choose the Actions tab there - it should be "refund this order" option there...

Hmmm... Is that in the Reports->Orders section? I can't see an Actions tab there. I clicked on the order number for the order details and the only tabs visible are General, Activity(0), History and Email Log.

Should I be in another section?

[Davaris]

Oops! I just found it. :) Thanks Andy.

[Davaris]

I have another question about RegNow and refunds. What happens if you sell a game through an affiliate and the customer wants their money back. Does the affiliate loose the money as well or do you have to pay for that?