Refunds: The Four-Question Framework for Making the Right Call

Someone's going to ask for their money back, and it's going to suck. But here's the thing, you don't have to panic. I'm breaking down the four-question framework that helped me decide whether to give refunds or hold firm, and why your emotional state matters way more than your contract's fine print. Plus, the one thing you absolutely need to do before any money changes hands.

Head to suzieconsoli.com to learn more about coaching.

Transcript

SPEAKER_00 0:04

Someone is going to request a refund from you. I hate to be the bearer of bad news, but it's going to happen and it's the worst. You know that feeling. You open an email and you immediately feel clammy, your heart starts racing. Honestly, you probably saw who it was from, and that happened right away. And I don't care how long you've been in business, there are always those people who can get under your skin like that. I've had refund requests that were so unfounded and unwarranted. People saying things like, it's clear to me that you just don't care about your clients at all, which couldn't be further from the truth. The fact that they have my personal email should say everything about how untrue that is. But especially in the agency world and really in any service-based business, particularly in B2B, this is a real thing. You have clients coming to you saying, I expected different results, and because I didn't get them, I'm looking for someone to blame. Now, they're not saying that directly, but that's exactly what's happening. And it's so hard to deal with. So today I want to give you a framework for making this decision clearly, because the worst thing you can do is make it from a place of panic, guilt, or intimidation. Today is about helping you make the right call, whatever that call is. Let's start at the beginning. You get the email. It's mean, it's nasty, you feel like every nightmare you've ever had about being a business owner has just shown up in your inbox. Here's the first thing I want you to do: pull in someone who is less emotional than you are. For me, most of the time, that is my husband. He's a really good sounding board. Sometimes, if it's a bigger situation, I'll bring in an advisor or somebody, but most of the time, he is an incredible sounding board for me. He is not a small business owner, which is point number one. He is not living in the day to day of am I ever going to have another client again? Is this all going to fall apart on me? He lives with that, but he doesn't actually experience it himself. He is in more of a corporate role. And so I really like his perspective because he brings me back to earth on, hey, I know it feels like everyone's talking about this, but they aren't. Everyone needs somebody like this in their corner where they can get the feedback after reading the email and hearing about the situation. They can give you the feedback of, hey, I know this sucks, but this person has a point. Or this person is totally out of line in crazy pants. You need that clarity before you can do anything else because when you're in it, you can't see it clearly. If you don't have someone like that in your life right now, this is honestly one of the best reasons to work with a business coach. It's why I offer Monday through Friday communication support because stuff like this doesn't wait for a scheduled call. You need someone in your corner who can text you back, who can read the screenshot, who can tell you, oh my gosh, this sucks. This person's crazy, who knows your client roster. And that's the kind of person that I am for my clients. Um, this happened just the other day. And I'm happy to sit there, walk through that with you, and help you navigate a situation like this because it is so emotional. Okay, plug over. Let's assume you have your person. Let's look at the situation. What's really happening when someone asks for a refund is that their expectations aren't in alignment with what was delivered. Whether that's on you or them or somewhere in the middle, something broke down in that gap. And your job is to figure out where. I had a client who emailed me once saying they were so disappointed that they paid all this money and the brand just wasn't up to their expectations. The first thing I did after I talked to my husband was I went straight to my contract and I found exactly what I was looking for. A clause that said, whether or not the client is satisfied with the brand design, no refunds are issued. We'll do everything we can, but we cannot control whether or not you are happy with the outcome. So I knew that legally I didn't have to give a refund. But sometimes just because the contract says that you don't want to give somebody a refund doesn't mean that that's your best decision. So how do you make this call? Because it is a subjective call, and there isn't always a black and white answer. I want to give you four questions to ask yourself as a framework the next time somebody writes you like this that you can go through to determine whether or not giving them a refund is the wisest choice you can make. Before we get into that, really quickly, I just want to put an asterisk here. There are going to be people listening to this who are like, wait a minute, you're telling me that the contract says no refunds. Why would you give them a refund? Because sometimes your time and emotional energy are better spent making money. They are better spent going and finding new business than wasting your time on crazy people. Sometimes you just don't want to die on the hill. You've got so many battles you're fighting in your business that sometimes just making the crazy go away is the right call. And I want to give you permission to do that. It's not always the right call, but I've seen so many of my friends spend so much time and money fighting a refund request that could have just gone away and made room for other opportunities. So I want to give you a framework to decide on whether or not you're going to give a refund so that you don't experience the same loss of resources. Okay, so here are the four questions to ask yourself. One, did you deliver what was actually agreed upon? Not what they hoped for, not what they imagined after the fact, but what was laid out in your scope of work? If yes, that matters. If there are gaps in the scope of work, I want you to just take note of that. Just notice it for now and write it down. Two, is there a genuine failure on your end? Be honest with yourself here. Not harsh, just honest. If something fell short, own it. And if it didn't, own that too. One and two are really important when you're growing a team. You've got to go do some excavating to figure out did someone on my team drop the ball? And if they did, that's okay. You're figuring out how to build your team. You're learning where your gaps are. But questions one and two are really important when you're trying to figure out is this person crazy or do they have a legitimate claim? Which brings us to number three. Who is this person really? Are they someone who is genuinely hurt and disappointed or someone who's just trying to work the system? This distinction changes everything about how you're going to respond. So if you've delivered everything within the scope, if you don't see any genuine failures, so let's look at the brand. I went back and talked to my team about this person who wrote in and said this brand was atrocious and just absolutely trashed us for about 2,000 words in an email. When I went back and talked to my team, I went back and saw not only had we completed a beautiful brand redesign, but we also had gone above and beyond. And we had offered extra revisions. We had offered an extra mini brand within the brand to try to account for some issues that the client ran into as they were restructuring their business. I was able to look at it and confidently say, not only did we deliver, but we went way above and beyond. Then I went back to number two and I said, okay, did we listen to everything they said? And I looked at the transcript and I looked at the notes and I talked to my team. And from what I could gather, this was exactly the brand I would have designed too. In fact, it was better. I felt so confident in what they had designed, which brought me to number three. Is this person trying to make things right or are they crazy? Right. That's kind of the question that number three comes down to. And I had struggled personally with some communication with this client, as had my team. Um, I don't want to get into details, but suffice it to say, we did not feel like they had our best intentions at heart. Knowing all of this brought me to question four. What is the actual cost of each path? Finding a refund is going to take time and energy and sometimes reputation. Giving one costs money, takes out of profitability, and can set a precedent. Neither option is free. So you have to weigh them both clearly. In this specific situation, the refund that they were asking for wasn't big enough for me to say this is the hill we're going to die on. We had tons of leads coming in. We were growing like crazy. And one person who was really upset about what I had pieced together was something happening in their personal life, wasn't worth me going back and forth with her on these long drawn-out emails. So at the end of the day, even though it hurt, even though we were in the right, and even though we had no legal reason to do so, I decided to give a partial refund. This brings me to why I'm talking about refunds on a sales podcast. This is a client experience issue. However, if you're a business owner and you have to make this call, be wary that sometimes drama like this, and it is drama, can suck you into this vortex of emails and back and forth and should we call a lawyer and what are we entitled to? And you end up missing out on the opportunity that's right in front of you. On our last episode, we talked about are you going to be a decimal or a comma person? And this applies to refunds as well. While I'm not a fan of blanket refunds and just rolling over for crazy people, I am a fan of walking away from drama when you're going to have a better outcome, making more money on the other side of it. If you are in a situation like this and you decide, I'm gonna just give a refund, I want you to do it with intention, be professional and clear, non-emotional. Before any money changes hands, you need to have them sign a mutual release agreement. This is a document that says both parties are walking away satisfied and neither are going to speak about the other. There's kind of an NDA worked into this. That protects you from a one-sided story showing up online later. If you do decide to hold firm, you need to do that with the same intention. You respond professionally, you reference what was delivered, and you don't let the heat of their email pull you into an emotional back and forth that goes nowhere. The story was easy for me to recall today because there have been so few times that I have agreed to give somebody a refund back. And most of the time it had to do with what they were asking for, the process that they went through. There have been some times where I feel like people had legitimate claims and I was like, you know what? You're right. And I would rather be on the right side of this ethically. But there have been some times, there have been more times where people have come to me and said, I'm not happy with this. I thought that I would run Google Ads and get all of this business. I thought that I could just turn on um Facebook posts and all of a sudden my business is going to quadruple. And I have to refer them back and say, I never said that. I I was always up front with people that marketing is a risk and that without a lot of data, and especially in a new business and an untested product, we never know what's going to happen. The best we can give you is data, guidance, and our full attention that we are working on your deliverables and your scope. When things like that happen, I always tried to respond with a lot of empathy, even if the other person was incredibly mean, because I knew that most of the time it was coming from a place of fear and doubt and scarcity, that they weren't going to be able to make this business run or that they were going to have to walk away from this dream. And that always brought me back to a place of feeling sad and feeling more compassionate after some of the anger had died away and my initial email had been deleted. What I want you to take away from this episode more than anything else is that refund situations can feel so chaotic, but they don't have to be. When you slow down, you get the right person in your corner, you ask them the right questions, the answer usually becomes pretty clear. And when you make the call from that place, you can stand behind it. I think a lot of people reach out about refunds, like I just said, because they're fearful. But I think a lot of people and a lot of business owners respond with the same fear or the same anger. Your business will be better off, will be more profitable, and will be built to last if you can make decisions like this, not from a place of fear, but from a place of strength. If you have a situation like this and you are like, oh my gosh, this timing is crazy. This is sitting in my inbox and I am freaking out. Shoot me an email. Go on my website, susieconzoli.com. I'd love to chat with you about what to do as a next step. Book a call with me. We can talk about that specific situation. You don't have to walk through this alone. Thank you so much for listening. Until next time, sell well.