Advancements in technology and the internet have made creating and launching digital products like e-books, coaching products, and online courses significantly easier in recent years. With the main investment being your time and expertise, and lots of great delivery options available (E.g. Thinkific, Teachable, Clickbank etc.), digital products are an effective list nurturing tool as well as an alternate source of income. There are lots of considerations that go into the design of your product however, and the refund policy is just one of them. This video covers the different refund policies out there and offers an explanation around why I have opted on a no-refund policy on my digital products.
Today, I want to talk to you about why I don't offer refunds on my digital products.
You will see people out there selling courses, coaching packages, and other materials that are delivered online and have a refund policy. A refund policy can be all-inclusive, so if within a certain period of time the person decides that it's not for them, they can get a partial or a full refund. Other times, you'll see a stricter refund policy; for example, if you complete all the homework and assignments in this course and work through all of the material but don't have the success and the results that were mentioned, then you can get a refund.
Why I Don't Offer Refunds
There’s also a third option, which is what I go with, and it involves not offering refunds on digital products that are sold through my website or on my Teachable course page. The reason for this is because everything is downloadable instantly, and it's far too easy for people with bad intentions to download this material and resell it on their own at a much lower price, or for somebody to sign in, download the materials, take the whole course, and then request a refund immediately.
Not everyone has good intentions
Because of the instant delivery of online courses, I find that sometimes people take advantage of lenient refund policies and try to get their money back. I had enough of this after I had three people do it; they signed up for a course, took the entire course (one of the reasons I love Teachable is that I can see if someone’s gone through all the material), downloaded the material, and promptly requested a refund. This didn't seem fair to all of the students who were actually doing the work. Somebody who takes the course in one day and downloads the materials, whether it's to review later on their own or to sell it to somebody else, does not have good intentions.
After this, I removed my refund policy that allowed people to request a refund within 30 days. If you're selling online courses, then ultimately, this is up to you. Yes, having a refund policy will help convert more people into paying customers – they get that peace of mind. When you have a refund policy and your product is good, there's a very small chance that people are actually going to request that refund, but it's big enough that it could become a hassle because of those people who do have bad intentions.
Personally, I decided I didn't want to let anyone in the course who wasn't serious about taking it. The right student for me is someone who's going to go through all of the materials at a reasonable pace and complete all of the necessary assignments; not somebody who's going to sign in in one day and download everything, and then request a refund.
The benefits of a no-refund policy
Changing my refund policy tightened things up and got rid of some administrative headaches as well. I used to get super frustrated when I got a refund email. Even though they were very rare – we only processed five in total out of thousands of students – I still felt like it wasn't fair to all of the people who were going through the course and had properly looked into it before signing up.
When I took away my refund policy, one thing that I encouraged people to do was to get in touch of me before they purchased anything. They could ask questions about the product and I could tell them whether or not I felt that it would work for them. This made things a lot easier, and I do get emails from people saying: “Here's my situation, here's the product I'm thinking about purchasing. Do you think this is the right choice?” It allows me to be really honest with somebody who might not be the right fit, and it cuts down on that frustration over refunds.
Perhaps I've just replaced the refund emails with emails from people asking whether the product is right for them, but at the end of the day, I'd rather get to know my audience and their unique concerns – it helps me determine whether my products are a good fit for them as well as to create new ones that are aligned with the problems and challenges they are experiencing.
It's your choice
These are the reasons I chose not to offer refunds on my digital products. Ultimately however, it’s up to you and the system you have in place. If you do choose to offer refunds, I recommend delegating that to a team member so you're not the one getting the messages and getting frustrated. It’s your choice; if you don't want to deal with people taking advantage of you, have no refund policy. Give them all the information they need to know about purchasing the course upfront.
If you are more concerned about increasing your conversions, then it makes sense to offer some type of a refund – but have it be with restrictions. Restrictions might include a specific time period for claiming a refund, having to show they've done the work, etc. This really decreases the chance of people asking for a refund.
I hope this has helped answer your questions about offering digital product refunds.