Your Refund Policy Sucks!
From a study of lifelong learning program refund policies, no one (except LERN’s UGotClass courses) has a money-back guarantee. And the huge cost in lost revenue, lost customers, and bad image will only get worse.
Around 20% of people registering for classes the final week before classes start. Yet some of you have policies that demand refund requests up to 7 days before the class starts, a ridiculous situation in which people have to request a refund before they even register.
Here’s the top 5 negative outcomes your current policy produces. And why your terrible policy will only make things worse for your program moving forward. You:
1.Turn away many Gen Yers.
Gen Y has less money and is more careful about spending it. They register closer to the start date as you well know. And they hesitate to devote their hard-earned money to products and programs that demonstrate they are too risky to trust.
2.Look really cold and harsh.
Life happens. You have to work late, your spouse has surgery, your kids get sick, your parents need a visit. So do your customers. Get real. Your program looks like you don’t care about your learners.
3.Increase dissatisfied customers.
The average satisfied customer tells 3 people, but the average dissatisfied customer tells 11 people. Sure, you make exceptions when some people request a refund over an unavoidable situation. But think of all the people who don’t ask and just turn off and turn away.
4.Don’t think your classes are quality.
The message is pretty clear: you don’t think your classes are quality enough to back up with a money-back guarantee. What does that say about your instructors and your program?
5.Fail to increase income 10%.
The only reason business has a money-back guarantee is that it increases income and profitability. The additional income and profit generated far exceeds the modest cost of refunds.
Money-back guarantees cost you no money. You generate about ten times more income than you give back. And most of the time, participants will, often happily, accept a transfer or voucher that doesn’t even involve a refund.
Last year, LERN’s UGotClass issued 49 refund checks out of 7,300 registrations. That’s a 0.007 refund rate. For anyone requesting a refund up to one week after the class ends.