What Sky-High Refund Rates Really Mean (And What To Do About It)

You can pretty much bet on SOMETHING going haywire anytime you launch a new product.

With the launch of the new JavaScript course at Simple Programmer, I was extra careful to cross all my I’s and dot all my T’s.

What bit me in the butt this time was:

Refunds.

The refund rate on this particular product was 3X higher than what I typically see on courses at Simple Programmer.

Ouch.

What to do?

The timing on this was ironic, because just a few days prior I got that same question from a subscriber named Will.

He said:

Hi Josh,
Great emails, thanks so much for the info.
I was wondering if you’ve found email follow up sequences after purchase to reduce refund rates for info products?
Keep up the great work.

I told Will:

The idea of using followup emails to reduce refunds is solid — but it’s not a strategy I’m currently using at Simple Programmer.

The reason is our refund rates are historically just so dang low.

We maaaaaybe get 1–3% of buyers requesting a refund.

That averages out to just a handful of lost sales per month.

Just part of doing business.

In my market I consider anything under 5% to be acceptable.

Putting a followup email sequence in place might save a few of those lost sales, but unless you’re losing dozens of sales per month it’s not worth the effort.

So along comes this JavaScript course with a refund rate that’s beyond what I typically see.

In this case I definitely want to get that refund rate down.

A high refund rate like this is often a message from your customers:

“Your product is not delivering what you promised in your marketing.”

So step one is usually going to involve fixing whatever’s wrong with the product.

In this case the product is fundamentally sound, but there are some minor technical issues that are tripping people up…

And the way that the course is taught is different than most people are used to.

So we’re going to rerecord some of the lessons, and add a couple of introductory videos that properly “frame” the rest of the course.

I expect those changes alone will bring our refund rate back down into the “good enough” range.

You will always have SOME refunds.

Make sure the product itself is quality, and your refund rate isn’t outrageous.

Then focus on bringing more sales in the door, rather than stressing about the few that get away.

Here’s a 2-step method to reduce refunds.


Originally published at joshuaearl.com on April 11, 2017.