Let’s Talk About Refunds

OK, let’s talk about refunds today. We don’t think this is a huge problem but some of you might so we wanted to help you understand the process.

First, let’s look at the big picture

We do not see any one individual vendor who stands out from the crowd with regard to refunds. You might think you have a lot but look at your refunds compared to your sales and then look at the big picture.

Currently, refunds are less than 1/2 of 1% of sales. So, for every $1000 in sales we do, we have approximately $4 in refunds.

Also, the average order is currently $6.47 and right now we’re refunding less than 5 out of every 1000 orders. Break it down even further and we’re only refunding one item out of every 670 items we ship.

So no, we are not worried about refunds. But we realize you might be so…

Refunds are a part of every business

It’s a fact and there’s nothing we (or you) can do about it. Orders are going to get lost in the mail and, while that’s not your fault or ours, that means there’s a dissatisfied customer out there. Customers are going to place orders without looking at the expiration date and again, while it’s not our fault or yours, that means there’s a dissatisfied customer out there.

It’s also not the responsibility of THCM to suck up every refund. If you were selling on Ebay you’d be responsible for every single refund, no matter the reason, and it would be your Paypal account at risk.

Refunds you don’t see

THCM issues refunds for any number of reasons you can’t control, such as Paypal glitches, problems with the site, and customer errors. Sometimes we issue refunds just because we want to make that particular customer happy. If there’s no vendor error involved and if it’s not a delivery issue related to the Post Office, THCM eats the refund and does not pass it on to the vendor.

Refunds due to vendor error

We know you’re going above and beyond to satisfy the customer. If you weren’t we’d be drowning in customer complaints and we’re not, so we’re not the least bit worried about that. We rarely get complaints about wrong coupons being shipped, listing errors or bar codes being clipped.

When we do have a customer complaint about something that’s obviously the vendor’s error, we generally ask the customer if they’d like to have the order reshipped or if they’d prefer a refund, before we contact you.

In most cases we contact the vendor to let them know there’s a problem. However, if it’s a timing issue – the coupon will expire or their sale would end before they’d receive the replacement – we generally just issue a refund and then notify you.

What constitutes vendor error?

  • Wrong coupon value in Description
  • Did not include “DND” or other limitations in Description
  • Shipped the wrong coupon
  • Clipped bar codes that can’t be used
  • Clipped expiration date
  • Shipped to wrong address

Refunds that are clearly related to vendor error are passed on to the appropriate vendor and deducted from the next Paypal transfer. You’re welcome to dispute this anytime you like. Seriously. I’m human and I do make mistakes and I’m always happy to correct them.

Refunds due to late deliveries

This is where we get the most complaints and this is where it gets tricky.

We have disclaimers on the Terms page, the checkout page and the shopping cart page stating that we do not guarantee delivery times at all, whether it ships USPS First Class, First Class with Tracking or Priority Mail.

All customers are also required to check the box that they’ve read our Terms every single time they order.

These disclaimers do work. We do occasionally get an email from a customer who says this is the second or third time she hasn’t received something but she didn’t contact us before because of what she read on our Terms page, so we know there are customer out there who are just sucking it up when the Post Office screws up.

Here’s what we do…

Our initial response is always to give the customer all the information we have about her order, when it was placed and when it was shipped, and we also confirm the shipping address.

If it’s been 8 or more business days since the order shipped, we recommend she check with her mail carrier, her local PO and her neighbors to see if it might have been delivered to them.

If it’s been 14 or more business days and the customer is still looking for her order we contact the vendor to see if you know anything about it. If you don’t have a tracking number or any other proof the order was shipped we generally issue a refund, notify you of the refund, and deduct it from your next Paypal transfer.

Yes, we know the USPS is slower than molasses and that eventually 99% of those customers are going to get their coupons and now they’ll be free because we already gave them a refund.

We also realize that many times it’s not our fault, the customer has given us the wrong address but by the time the Post Office returns it marked “Undeliverable” we’ve already issued the refund.

Again, refunds are a part of any business and there times when you just gotta keep the customer happy and suck it up.

Why we generally come down on the buyer’s side

Time is Money – We could spend 30 minutes or an hour researching a problem, which would in turn mean you’d have to spend some amount of time getting us an answer. With you, me and the customer all online at different times we’re talking hours, if not days, spent talking about $2.50.

  1. I’d rather not risk losing a customer over $2.50

  2. If you’re worried about a $2.50 refund you’re either not looking at the big picture or you have bigger problems to worry about.

Paypal Rules – Paypal will always side with the buyer unless you can provide a) proof the order shipped and b) tracking information.

In the beginning Paypal used to give us the benefit of the doubt. But we process thousands of transactions every month through our Paypal account now. Because of this, and because it’s a business account, Paypal shows us no mercy. If we can’t prove it shipped and if we can’t track it through the USPS system, Paypal will side with the buyer and refund their money every time.

Again, Time is Money. It takes even longer to produce the documentation needed to fight a Paypal Dispute. If we don’t have that necessary proof and we know we’re going to lose anyway, why waste the time fighting it.

How to reduce refunds due to delivery delays

Shipping Address: Always make sure you’re using the customer’s Shipping Address. The shipping address shows up on your Orders Report and on the order confirmation email you receive.

Order Notes: Get in the habit of looking to see if the customer has included any special shipping instructions in the Order Notes. These also appear on your Orders Report.

Give the Customer the Tracking Number: If you have a tracking number, go to your Orders Report and use the Order Notes to send it to the customer. In most cases that does the trick. The customer knows you shipped it and they move on to pick up the discussion with the Post Office.

Mailing Location:  Did you know mail carriers are NOT required to pick up mail from your mailbox – ever? We found out the hard way when our orders sat in the mailbox for 3 days. Carriers are only required to deliver mail – and even that comes with a whole lot of leeway in interpretation.

Did you also know your carrier might not actually move your mail along its way until the next business day after he picks it up? If he picks up your mail right before his quitting time he may drop it off to be processed until the next business day, even if his quitting time is well before the pick-up time at the Post Office.

Outgoing mail gets no priority attention AT ALL unless it’s dropped at a Post Office or one of those big, blue, official USPS mailboxes you see on the corner.

Jessica and I greatly reduced our own customer delivery complaints when we started dropping our orders directly at the Post Office every day. Find out what time the USPS truck picks up and get your orders there an hour before pick-up time. If you’re not near a Post Office, find the nearest USPS drop box and mail at least one hour before the posted pick-up time.

Consider using Paypal for everything that takes more than one stamp

If your envelope requires more than one stamp, chances are it’s going to need at least three. Two stamps won’t be enough and when you use three you’ll be wasting money.

Jessica and I used Paypal to purchase and print postage for every order that needed more than one stamp. In most cases we saved a few cents but at the very least we had a tracking number for every order we shipped when we used Paypal postage.

Watch this video: How to Save Time and Money by Printing your Postage with Paypal.