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Tip: Get more sales by refunding churned customers

When a customer churns, it's in your best interest to part on good terms. Foster goodwill and positive word-of-mouth by giving refunds when they're requested.

According to @Ankit_Kaknut, he got his first customer for Growthfyi Headlines because of a refund. When a customer on a previous (SaaS) product asked for their money back, Ankit handed it over, despite having a "no refund" policy. Later, when he launched another project, he informed the ex-customer and they immediately bought it — like, within seconds. His earlier refund, it seems, fostered goodwill and trust which paid off in the end. And it likely helped to maintain his good reputation and elicit positive word-of-mouth. Just make sure to get a good understanding of what happened so that you can make improvements. And if you can't handle it from a cash flow perspective, consider shorter billing cycles.

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  1. 2

    More importantly, not refunding a customer (especially when they asked for it) puts your Stripe account at risk of suspension, particularly when chargebacks are filed.

    I think the standard is very strict, something like 0.8% of payments.

    Meaning you can only have 8 disputes/1,000 payments you receive.

    More and you're considered a high-risk account liable for suspension.

    Also I totally agree that refunding before they ask for it builds goodwill, especially when virtually no business does this.

    1. 3

      Hi,
      It's me Ankit.

      That was surely not the case here, I wasn't using Stripe plus I clearly mentioned my refund policy (no refunds) which keeps me on the safe side.

      I just gave it because he asked for it and I know being a kind version helps.

      Regards
      -Ankit

  2. 2

    Fully agreed. I’ve always offered refunds. I offer a 60 day refund period on Doka. It’s saved me from a lot of negative situations. It’s much healthier to give a refund and focus on the next customer than to start a discussion. I also offer refunds liberally when I have the feeling the customer might’ve purchased the wrong product (for example they need lots of features that aren’t there), 90% of the time they don’t want it and the other 10% is surprised by customer service.

    1. 2

      I'm a big fan of your product. I guess I first saw it on CSS Tricks(not sure though).

      Great product, keep building.

    2. 1

      💪 Nice, thanks for chiming in!

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