Would you refund this customer?
Hey fellow Indie's:
I've build a profitable subscription-based online course.
The FAQs clearly state that there is a no-refund policy once a customer has paid and therefore been granted access to the course material.
However, I received a very polite, well-written email this morning from a customer sharing how much this student has enjoyed and valued the course during the first month, but they didn't realize that it was a monthly subscription. They have very kindly asked for a refund for the second month's payment, which just renewed an hour after they sent the email.
In case this helps, a small amount of background information about the course might be helpful:
The course/site/brand is not associated with me, my name, or face. I say this because I could see if I was selling a course, such as "how to build website" for an example with all of my own social accounts attached to it how this could negatively affect reputation, etc... However, this course, as it is currently built, is truly a once-and-done course. The people come to learn this, and then they leave. It's not like community, where this one experience spoils the relationship for others. The course offers career training, so they would be certainly associated with colleagues who this customer could then refer other friends to.
Pricing could also be an information factor that might help. The course is $39.99/mn.
In the past I've simply told students that all the information is clearly laid out in the sales page, and it is the student's responsibility to cancel.
However, as my course continues to grow, I'm wondering what you would do in this case, and thereby what I should do.
All thoughts and insight helps. Really appreciate it!
I agree with everyone that has commented but have a question if you don't mind.
Why is this course a subscription? There's no community, no added material, so it's just paying for continuous access?
Hey Fily, that's exactly right. The customer pays for continued access.
Amazing! Can I ask what's your LTV?
Thanks : ) Hard to say at the moment. In a few weeks, I will cross the 1-year mark since publishing the course. I have continued to increase the pricing ever since, and am about to do the same at the end of the month. The course has only grown month after month, so I don't know the true LTV of the program yet. Also, I only changed the pricing model to subscription about three months ago, and the most popular price for the course is actually $99.99 for 3 months, so that is just about to renew for a lot of folks. It will be interesting to see, as I should have a better understanding for LTV with the next 6 months to a year.
Refunds are always the way to go. In fact, I'd consider changing your policy. It'll get more people in the door if they know it's refundable. And I bet very few people will end up asking for refunds.
As for this particular case, I would personally refund them just because it's seems like the kind thing to do... but from a business perspective, I can also say that this person is likely to sing your praises if you give them a refund. It's a relatively small cost, with a relatively large benefit.
You could even ask for a testimonial after you refund them.
I was thinking the same. Thanks Toni.
Yes. If you do not give a refund is for sure going to a negative reputation for your course. And you lose more than the refund amt.
But if you give the refund. I think as he loved the course he is going to tell others.
Great point, cheers Omkar.
If you refund it, the user will keep you in a positive memory. Maybe he comes back due to the positive vibes. Maybe he will recommend your service, which can lead to a lot of new users in the long term.
For you maybe the $39,99 is not much, but for an individual student it could be a lot of money.
I would always go for the refund way, especially if the scenario like here is obviously a misunderstanding.
Very true. Thanks for your input Alex.
I always refund subscriptions or anything in that range. I would rather have that customer leave a nice review than a bad one :)
Great point. Thanks yxngdano.
I would advice you to refund. Of course you are right, the policy states it but they do not seem to me that they would like to cheap out on a month of access to the course. It would be a different question if the student wanted to gain something from that but like that you have the opportunity to have a customer running in the world thinking you are a reasonable person. And if they liked the course they probably would even tell people about it.
I don't think its worth making somebody bitter even though you might be right
Much appreciated philosopher!
My vote is to refund! I'm not sure what your overhead costs are, but whatever it is it's worth it to leave a good lasting impression.
That's true, thanks Colby.
It could happen to anyone, you said subscription was renewed 1 hour ago. Just refund it.
True. Thanks Ivan.
If someone is not happy with my guide or community in the first month I refund the money. I don't want to have unhappy costumers.
Refund is the way to go! Besides, you can actually stick to your policy if they've been accessing the course or any material in your site for a week or two. But if only an hour passed by, let it slide. Get them their refund :)
Noted, thanks Trey!
I think that a single payment for a course that does not change over time and a refund with the possibility of commenting are the way to go.
Thanks for your feedback Roan.
Always refund, no matter what. Happy customer, happy conscience, even though if you are right.
For a subscription I won't recommend a No refund policy, only for digital goods that can be used afterwards...like website templates and so on.
Hey Michael, appreciate your insight!
I would refund, and I would change your policy as well. I think more people would become customers with that peace of mind.
Thanks Bscherer10. Any thoughts on what the new policy should be? E.g. full refund with no questions; refund before first 24 hours, etc...?
I think refunds policies should be based on (1) whether value was provided to that customer, (2) whether there was mistaken expectations (good faith ones). For your product, a 1-2 week free refund policy would satisfy the first part (someone knows if it’s valuable by then), and for part 2, that would be case by case basis (like this situation).
i would refund if i were in your situation.
Cheers Pdyc!
To be completely honest and direct. If you are not continuosly offering some sort of new value every month, then charging for a subscribtion is borderline a scam. Unless you are planning to do that then I would certainly change it to a one time payment for lifetime access to the course. You can later on upsell people on something recurring if there is some value being provided every month.
Hey Kev, I appreciate your response, cheers.
I've got a customer telling me that she will be on vacation for 2 weeks and asked to pause the subscription while on vacation, lol.
Compared to mine, your customer's request is much more reasonable. : )
Roger that, thanks Leon.
Yes, I would. We are pretty strict on not giving refunds when people have had usage or had multiple months in which they've had opportunities to cancel and haven't.
But I'll always refund the most recent payment, and in double-quick time if it's only just renewed.
Good point, thanks Td.