We have a customer. Paid a year in advance. Is happy with the service, but their designer is not coming through for them. They wish to cancel their hosting account after 6 months, because of the web site not being completed, and want the balance of the year's hosting refunded to them.

We have a 30 day money back guarantee, which, obviously, the customer surpassed without complaint...

On the one hand, to maintain a good name for our company, we would refund the money, however, on the other hand, it is clearly written into our "User Agreement" that if service was satisfactory and nothing was wrong with the servers, etc., money is not refundable upon cancellation; sort of like how a gym membership would play out.

This is the first time we've been faced with this, and I welcome all of your suggestions on the best way to enforce our "User Agreement", yet keep the customer happy (which is key to our advertising and mandates).

Thanks in advance!

Jenn.

You can bend the rules. Your customer's request is not unreasonable. He is only requesting for the remaining 6 months.......not immediate refund of the remaining months. Refund to your client, satisfy him, assure him that you provide good services and offer him hosting if he needed in the future.
If your client is bound to be contented and he may bring you future business. That's what I will do if I were in your position.

There are certain things that you need to be firm in order to be successful in business. But there are also trivial things that you can always overlook it and keep and eye close where you can satisfy your clients.

Just to echo what Eric said. . . . .nothing to add. . . .

First thing to be said is, you should stand firm on your policies and only give in if it will cost you more than the money they want. So basically, the initial answer should probably be that the terms state no refunds but if they throw a big fit about it, then it's not worth it to keep the money.

Most clients get a pretty decent discount for signing up yearly. If this is so, then I would charge them for 6 months of the month to month price and refund the rest.

I'm with Jeremy. If there's a 3 or 6 month discount however, go via that instead of the month to month. They'll appretiate it and if they do ever get the website done I'm sure your company will be high on their list of choices.

My suggestion would be the same as others have recommended... keep the customer happy--refund them the balance on a pro-rated basis. They may come back to you when they find a good designer.

Alternatively, if you also offer design services or have an arrangement with a designer, perhaps you can keep them as a customer and help them get their site designed as well.

If you refund them, they may not ever tell anyone--but if you don't refund them, they'll probably tell 10 people.

Good luck!

--Erika

Why not kill two birds with one stone and offer to develop their web site for them? If you don't have a designer on-staff there are many designers here on WHT I'm sure you could hire. Charge them a reasonable rate (mark up what you pay the designer a couple of percent - the goal of offering to do the design isn't to make a big profit off of it it's to keep a satisfied hosting customer).

When it's time for them to renew 6 months from now, they're a lot likely to renew if you helped them out in this instance.

If they don't want you to do the design for them or you can't come to an acceptable design price, then I say just refund their money. If they received a discount for signing up for the year versus signing up month-to-month, figure out the difference between the two prices and refund the remainder (in other words, treat the preceding 6 months as if the price had been for month-to-month and refund the difference between that and what they paid). It's not worth a fight over the small amount of money the refund will take (and, very likely, if you refuse they will simply initiate a charge-back with their credit card bank and you'll lose 100% of the money including the 6 months they've already used, plus whatever you pay in chargeback penalties).

Jason

Doh! Erika beat me too my suggestion. That's what I get for fielding a phone call between the time I click reply and the time I actually write the message :(

Exactly, get a web designer for them and offer website design to them. I am sure that they would agree and then you could always keep the client.

I recommend that you partner with any Web Design company and this way you can keep more and more profit as well this way it would also boost up your profits a little.

Just take it as an advice. :)

If a person has paid for a year and wishes to cancel half-way through, I don't believe you can refund them the difference.

You have to issue a full refund and then charge for what was used.

It's in the Visa and MasterCard agreement.

Forgot to mention the reason why they don't allow it.

You can't do it, but should it be allowed you'll be faced with the following problem:

1. You refund the client half the purchase.
2. The bank doesn't know why you credited the clients account. To them it's a totally seperate transaction.
3. The client then files a chargeback and gets 150% of the money they originally paid to you, ie. original purchase refunded by bank + half the purchase refunded by you.

Thank you for all of your suggestions! :)

This is what we are going to do: since the customer paid via cheque for the full year, we will refund him back the 6 months he's asking for. It's better for us to keep a customer happy - I think that it's wise to consider that he may come back, or that he may suggest our company to someone.

As for suggesting we design the site for him, it's been done. :) The problem is that the former President of the organization was going to do it for them, not a professional designer either. So, that is more complicated for the customer.

Again, thank you for all your suggestions. I really appreciate your taking the time to help out.

Have a wonderful day!

Jenn.