I'm curious what other hosts do when customers who sign up for long term plans and as a result have deep discounts attempt to weasel their way out of their contracts wishing to be refunded.

We've always just said it's not worth dealing with and refund for the rest of the term. I'm starting to wonder if this is really the right course of action at all.

We always hear customer x says something is slow. They never provide a date, time, trace routes, the web site or anything in question they flat out ignore it. Then you know they threaten to smear your name if you do not refund them the usual.

I'm starting to see a real pattern and look at them as bullies and people who switch hosts every 3-6 months while signing up for the longest term possible and use coupons specific to that term to gain a big discount.

So what do you do about this people? You cave to their demands or flat out say no and call their bluff on them doing a smear campaign.

Most webhosts do not run "contracts" -- are you referring to if they pay annually, quarterly, etc?

Point blank, if they are past their refund policy (14 days, 30 days, whatever you have it set as), I would say no. My TOS clearly states no refunds at all regardless of the case, after the initial 14 day refund policy.

What are they going to do, open a paypal dispute on a intangible good?

We just kill any clients who try to escape.

Most webhosts do not run "contracts" -- are you referring to if they pay annually, quarterly, etc?

Point blank, if they are past their refund policy (14 days, 30 days, whatever you have it set as), I would say no. My TOS clearly states no refunds at all regardless of the case, after the initial 14 day refund policy.

What are they going to do, open a paypal dispute on a intangible good?

Well what I mean is they sign up for a year pay a year up front then 6 months later want half the money back since they decide to use someone else's services.

Refund them based them paying monthly, quarterly or semi-annually. If the 'discount' or coupon originally used required a yearly contract, reduce that % off as well and refund the remaining balance.

Don't keep someones' money who isn't going to use your service but if they back out, refund them according to what they would pay without the full year.

Don't keep someones' money who isn't going to use your service but if they back out, refund them according to what they would pay without the full year.

See I do not do that because I have a 14 day money back guarantee. They can have their money back within the first 14 days, but if they pay for a full year then they pay for a full year and their account will remain active for that long. If they ask for a pro-rated refund we will not give it as it is not part of our money back policy.

See I do not do that because I have a 14 day money back guarantee. They can have their money back within the first 14 days, but if they pay for a full year then they pay for a full year and their account will remain active for that long. If they ask for a pro-rated refund we will not give it as it is not part of our money back policy.

Sure, and your reviews will suffer as a result and you'll spend a whole lot more time explaining things via forums than if you would just refund & get it over with.

If you thought a woman scorned could output hellfire, wait until you see a client who wants their money. :) In reality, I couldn't accept funds that weren't covering used service anyways -- even though we only have a 30 day money back guarantee, we do refund unused portions of funding upon most requests.

Now if it's a terms of service breach or something to that effect, the funds helped covered our suffering & time -- but if someone just wants their lunch money back, have it.

Sure, and your reviews will suffer as a result and you'll spend a whole lot more time explaining things via forums than if you would just refund & get it over with.

If you thought a woman scorned could output hellfire, wait until you see a client who wants their money. :) In reality, I couldn't accept funds that weren't covering used service anyways -- even though we only have a 30 day money back guarantee, we do refund unused portions of funding upon most requests.

Now if it's a terms of service breach or something to that effect, the funds helped covered our suffering & time -- but if someone just wants their lunch money back, have it.

I guess it would depend on the case with my business, we have never actually had the issue, but then again we do sell many more VPS than we do shared, and we only accept monthly payments on VPS

Refund them based them paying monthly, quarterly or semi-annually. If the 'discount' or coupon originally used required a yearly contract, reduce that % off as well and refund the remaining balance.

Don't keep someones' money who isn't going to use your service but if they back out, refund them according to what they would pay without the full year.


Thats pretty much what we always do with these people.

But you know it makes you think when they cannot provide any information about their troubles and instantly jump to another host and expect annual payments to be refunded. Which in most cases means the standard refund options are no longer available (most of these people seem to love Paypal).


Ahh well the nature of web hosting.

Offer a pro-rated refund based on the unused time. That's what we've always done. As someone else said, its just not worth having to deal with angry ex-customers. Besides, you never know when an ex-customer will come back home after finding out the grass isn't always greener on the other side. :D

--Tina

Our TOS says no refunds, and if our service has been good we stick to it. The client has been given the chance to go short term, and they chose to go long term to save money. Having said that, if they paid in advance without a discount, we will generally work something out.

I agree with those who do pro-rated refunds. It's just not worth the hassle or possible negative fall back for refusing.

It sucks, but customer service is really important and for many, has more of an impact than cost/options.

Its been my experience that people who commit to a 12 month prepay generally have trust in us and are truly in it for the long haul. Something pretty bad would have to happen, in my opinion, for them to change their minds. So, in that case, we'd want to refund rather than risk having someone post bad reviews all over the place.

I think in the last 12 months, I can remember giving a pro-rated refund twice. Overall, I don't think its enough to worry about.

--Tina

Greetings:

1. "Most web hosts do not run contracts."

I hope that's an assumption rather than a truth; we do have contracts with our hosting clients (shared, co-located, dedicated, managed dedicated, security administration, etc.).

2. What we do when a customer who went with a longer term contract which offered a discounted payment stream is per our contract, pro-rate any refund based on their being on the appropriate lesser term contract.

I.e. for shared hosting if they pay yearly for the discount, and then want a refund three months in, we would refund nine months based on their having paid quarterly.

Thank you.

What we do is offer the client a refund based on the monthly rate. So for example if the year fee is $60/year and the monthly rate is $10/mo and client was with us for 3months than he pays $30 for 3months + we charge setup fee on monthly hosting and yearly is free so they would also get charge a setup fee charge. At the end they only get back very little. In some instants the clients email back saying to just leave the account for the rest of the year.

I had a few times were customers would argue for the refund of the 1year term contract. It simply baffles me.

Can we stand along with AUP and TOS? I mean what if the client sue us? Any body have experience in this kind of situation?

Can we stand along with AUP and TOS? I mean what if the client sue us? Any body have experience in this kind of situation?

I would feel bad for you if a shared client sued you over $25 :P

For most cases, the cost to sue would outweigh any potential financial benefits of winning the suit on the clients end.

What will cost the provider the most money is in bad press. If you tick off a vocal client, that could cost you far more than a lawsuit.

It may not be fair, but it happens all of the time.

I'm not saying to give into threatening clients, by any means, but at the same time, try to work out an amicable resolution in every case to minimize the exposure.

Customers can sue you whether you have a TOS/AUP or not. A solid TOS/AUP is what prevents them from winning or even bothering to sue you in the first place.

--Tina

But you know it makes you think when they cannot provide any information about their troubles and instantly jump to another host and expect annual payments to be refunded. Which in most cases means the standard refund options are no longer available (most of these people seem to love Paypal).
What gets me going about cancels is those that cancel saying "your service is slow" or some other issue without contacting us -- even once -- and they are the only ones that have complained.

Customers can sue you whether you have a TOS/AUP or not. A solid TOS/AUP is what prevents them from winning or even bothering to sue you in the first place.

--Tina

If you do it right, they would think twice about even bothering.

My TOS states that they have to sue us up here in washington, and cover all fines and fees regardless of the verdict :P There is also a few other key notes regarding legal issues located in our TOS, so it makes them think twice

My TOS states that they have to sue us up here in washington, and cover all fines and fees regardless of the verdict :P There is also a few other key notes regarding legal issues located in our TOS, so it makes them think twice

I highly doubt that is a legally acceptable clause to have in a contract; it certainly wouldn't be in the UK.

You can specify where the jurisdiction is (the city and jurisdiction where the company is based), but I don't think that you can have them pay the legal fees if YOU lose. I think you can sue for the legal fees if THEY lose. I'm not sure, but as mentioned before, just because it's in a TOS does NOT make it legal or enforceable.

Many terms of service are written to offer as much protection for the writer as possible without ever actually consulting a lawyer/attorney to see what is in fact legal and how much protection can actually be gained from the said Terms of Service.

It's really a poor way to go, but many do it because they do not want to pay for a couple hours of attorneys fees to potentially save them a lot more money in the long run due to a lawsuit of some kind.

Lawsuits are practically unavoidable. But one has to do her best to avoid them as best as possible. A few "deals" to avoid in the first place:

1) Costly custom specs which you have to order (>$5k)
2) Long term contracts (we don't do that period)
3) Future promises on either ends
4) Lending money (forgoing payments)

We're human and we do make mistakes. As they say never lend money to friends. And yes customers are friends you treat professionally with care.

Regards

That is actually quite a weird situation, because it has never happened to us that I recall. But if it did, I do see no problem in refunding the customer the rest of his unused term. Why keep his money if he isn't going to use the service? It hurts your reputation seen from the client, and quite possibly the reputation seen by others if the client becomes vocal about the situation.

I highly doubt someone will sue even for $1000. Depending on the state, wouldn't it be considered small claims court? Do you think someone from another state or possibly another country is going to fly over and sue you in a small claims court? I wouldn't be worried too much about being sued rather than your reputation being ruined because you were being greedy.

I guess everyone sees it differently, and it's up to you how you run your business.

If you do it right, they would think twice about even bothering.

My TOS states that they have to sue us up here in washington, and cover all fines and fees regardless of the verdict :P There is also a few other key notes regarding legal issues located in our TOS, so it makes them think twice

TOS-es don't make you invincible.
Covering all fines and fees regarding the verdict isn't a legal clause anywhere, to my knowledge.

And an illegal clause, can, in essence, void the TOS in part or in whole. (depending on jurisdiction)

TOS-es don't make you invincible.
Covering all fines and fees regarding the verdict isn't a legal clause anywhere, to my knowledge.

And an illegal clause, can, in essence, void the TOS in part or in whole. (depending on jurisdiction)
Are you a lawyer?

I highly doubt someone will sue even for $1000. Depending on the state, wouldn't it be considered small claims court? Do you think someone from another state or possibly another country is going to fly over and sue you in a small claims court? I wouldn't be worried too much about being sued rather than your reputation being ruined because you were being greedy.

I guess everyone sees it differently, and it's up to you how you run your business.

I've seen small court cases on TV where they sue over $100... If they happen to live close to your jurisdiction, they won't lose anything but time to take it to a small claims court.

Would it be a bad idea to do this; After the 14 day refund guarantee is up change a cancellation fee and then give them a partial refund? And then if they paid for more than a month you obviously just refund them for the amount of time they didn't use and subtract the fee from that.

Would that be fine, or is that considered a bad idea? I'm thinking this would make it worth while for the hosting companey, and also sort of enforce an opinion to client. Just to let them know that it wouldn't be worth it to them to cancel their hosting.

Shared and VPS clients wouldn't have written contracts and would be bound by our normal terms and conditions ie. normal refund periods etc.,

Dedicated and colo clients would have signed contracts with clearly defined "get out" clauses.

Are you a lawyer?

He might not be, but such a TOS clause would certainly be deemed invalid/illegal. :)

A clause along the lines of "cover all fines and fees regardless of the verdict" would be deemed as one such thing.

Make sure to update your refund policy too so that everyone knows the deal if they cancel on a 1 year contract. We handle them on a case by case basis even though our agreement indicates they are pre-paying for services which we will technically be providing. However I find any negative energy to be a total waste of time and would much rather give a refund over wasting time and energy. My feeling is to focus on good customers and providing good service and keeping the happy customers even happier. :)

He might not be, but such a TOS clause would certainly be deemed invalid/illegal. :)

A clause along the lines of "cover all fines and fees regardless of the verdict" would be deemed as one such thing.

You'd be right, I removed that clause... sorry for the confusion.
Does this make more sense? Had this for a while:
7. INDEMNIFICATION

You will defend, indemnify and hold harmless Crissic Solutions LLC and its officers, directors, shareholders, employees, consultants, agents, affiliates and suppliers (an "Indemnitee") from any and all threatened or actual claims, demands, causes of action, suits, proceedings (formal or informal), losses, damages, fines, penalties, liabilities, costs and expenses of any nature, including attorneys' fees and court costs, sustained or incurred by or asserted against any Indemnitee by any person, firm, corporation, governmental authority, partnership or other entity by reason of or arising out of or relating to: (i) your violation or breach of any term, condition, representation or warranty of this Agreement or any applicable policy or guideline; (ii) your conduct, including but not limited to your negligence, gross negligence, or willful misconduct; (iii) your use of the Services, including any improper or illegal uses; (iv) any claim by a former employee of yours whose employment has been or may be terminated in connection with or as a result of the execution of this Agreement and performance of the Services by Crissic Solutions LLC ; or (v) any claim relating to your services or products, or your installation and/or use of any third-party software, including but not limited to advertising, product liability claims or infringement of any trademark, copyright, patent, trade secrets or nonproprietary right of a third party (including, without limitation, defamation, libel, or violation of privacy or publicity).

8.3. Choice of Law and Forum
THIS AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE UNITED STATES AND THE STATE OF WASHINGTON, WITHOUT REFERENCE TO RULES GOVERNING CHOICE OF LAWS. ANY ACTION RELATING TO THIS AGREEMENT MUST BE BROUGHT IN THE FEDERAL OR STATE COURTS LOCATED IN WASHINGTON, AND YOU IRREVOCABLY CONSENT TO THE JURISDICTION OF SUCH COURTS.

That sounds much better Skylar.