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  1. #1
    Join Date
    Apr 2002
    Location
    North Kansas City, MO
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    2,565

    Should I refund this customer?

    Ok, here's the deal:

    New signup comes through. Orders a Quad Core Xeon.

    Our normal setup time is 24-48 hours. This guy says he has to have it right away so I put him to the front of the line and have my guys drop everything to get him built and online right away. About an hour and a half later I send him his welcome e-mail.

    Later that night he starts sending e-mails to me that the server is a Dual Xeon HT and not a Quad Core. In the morning, when I get in and check my e-mails I get these and a final one saying "cancel my server and send me a refund."

    I reply to the e-mails telling him that it is, in fact, a quad core xeon as you can see if you look at the CPU info in the OS. he responds back with a "cancel my server and refund me".

    Now I'll probably just refund him because it's not worth the $160 to deal with it... that and I'm a nice guy... sometimes to nice. The reason I ask the question is because I've noticed an increase in clueless people ordering boxes and I feel like we need to set a clear policy.

    For example, I had one guy cancel after a couple hours because terminal services wouldn't work.... he ordered a Linux box. When this was explained to him he insisted that he couldn't do anything with a command line and needed to use terminal services. I told him he needed a Windows box then and he said he required Linux. I refunded him.

    So I'm curious about how other providers handle issues like this. Again, I normally just refund them and move on but lately there are alot of people doing this.

    On this guy I sent him a reply telling him that we had expidited his order and that his reason for cancellation was a mistake on his part. I asked him how much he thought we were entitled to keep for our troubles.
    Aaron Wendel
    Wholesale Internet, Inc. - http://www.wholesaleinternet.net
    Kansas City Internet eXchange - http://www.kcix.net

  2. #2
    Join Date
    Jun 2001
    Location
    Kalamazoo
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    33,190
    Quote Originally Posted by WII-Aaron View Post
    ... Later that night he starts sending e-mails to me that the server is a Dual Xeon HT and not a Quad Core. In the morning, when I get in and check my e-mails I get these and a final one saying "cancel my server and send me a refund."...
    Could it be your response time that made him reconsider purchase?

    Or were those emails he sent through the night handled by someone else?

    I asked him how much he thought we were entitled to keep for our troubles.
    Always a nice touch.
    There is no best host. There is only the host that's best for you.

  3. #3
    Join Date
    Apr 2002
    Location
    North Kansas City, MO
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    2,565
    Quote Originally Posted by SantaRevue View Post
    Could it be your response time that made him reconsider purchase?

    Or were those emails he sent through the night handled by someone else?

    Always a nice touch.
    They were sent to my personal e-mail. Not the support system.

    My inquiry is not really intended to be specific to this one incident but to what I see as a rising trend of these types of issues. I'm sure we are not unique and that any company of reasonable size has the same stories.

    My interest has more to do with what other providers policies state in these circumstances. Here are "customers" (I quoted that becasue I guess if they're with you for a day and then demand a refund because World of Warcraft won't load on thier linux server and how are they supposed to play it from the command line then they're not really customers any more.) that suck alot of time that could be dedicated to real customers. Someone had to wait for thier server becasue this guy was expidited.
    Aaron Wendel
    Wholesale Internet, Inc. - http://www.wholesaleinternet.net
    Kansas City Internet eXchange - http://www.kcix.net

  4. #4
    Join Date
    Jan 2007
    Location
    Miami Beach, FL, USA
    Posts
    764
    Had a few clients like that before. One of which decided to start a flame war here on WHT. Didn't refund him though.. We should have charged him $25/hr for the work we put into his unmanaged server. That will make a nice holiday present
    Website Design and Marketing in France
    www.SagaNET.fr

  5. #5
    Join Date
    Aug 2007
    Posts
    96
    I would say it would be logical to charge for the labor fees. I mean you are trying to run a business here and it is the holiday season.
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  6. #6
    Join Date
    Dec 2007
    Location
    Nashville, TN USA
    Posts
    12
    I have the same problem on a regular basis myself with our website hosting and ShoutCast services.

    People will signup for a ShoutCast server then a few hours later request a refund because "It's not what I thought it was" or "I didn't know I had to broadcast (DJ) to it" or my personal favorite... "You mean it doesn't come with free music? I don't have any music for it"

    When deciding how to refund these people I always base it on the length of time they were with us and how much trouble they may of caused us in that time. If they are with us for several days and tied up our support system with like 10 - 20 different support tickets in that time then I'm not likely not going to consider refunding their $5 payment...we earned every penny of it.

  7. #7
    Quote Originally Posted by WII-Aaron View Post
    This guy says he has to have it right away so I put him to the front of the line and have my guys drop everything to get him built and online right away. About an hour and a half later I send him his welcome e-mail.
    I honestly don't know how this one exactly goes, but I'm wondering what if there's an option to expedite the order for a non-refundable additional fee?

    Of course, that means be ready to dispute a chargeback...if you're up to it...

  8. #8
    Join Date
    Jul 2004
    Posts
    300
    Raise your prices and the customer quality will follow.

  9. #9
    Join Date
    Oct 2005
    Posts
    261
    You are trying to run a business and you have provided the service to the client, however I don't see anything in your terms of service about refunds or cancellation. I would look into getting that fixed so when things like this come up you are legally covered instead of having to make a judgement call. I would refund the money to the guy since it probably is not worth the hassle of dealing with the guys credit card company on the dispute he would likely file against your company.
    Last edited by meaton; 12-22-2007 at 03:45 AM. Reason: Grammar

  10. #10
    Id set a clear policy on refunds, NO REFUNDS.

    Perhaps you should just set restrictions on refunds.. maybe use the following (Custom Written by Myself)

    Section 1ii.2ii.3ii.4ii.5ii......231ii. (Ect.)

    A full refund can only be provided if you appeal to us in writing within 3 days of your purchase. Refund requests by email will be taken into consideration and you will receive a refund based on the time since you purchased X GOODS. Email requests for refunds will be dismissed if not sent prior to 3 hours since purchase.

    Un plein remboursement peut seulement être fourni si vous faites appel à nous par écrit dans les 3 jours de votre achat. Des demandes de remboursement de l'email seront prises en compte et vous recevrez un remboursement basé sur le temps puisque vous avez acheté des MARCHANDISES de X. Des demandes d'email des remboursements seront écartées si non envoyé avant 3 heures depuis l'achat.

    Ein voll Rückerstattung können nur sein zur Verfügung stellen wenn Sie gefallen zu uns in Schreiben innerhalb 3 Tag von Ihr kaufen. _ Rückerstattung verlangen durch email werden sein nehmen in Betrachtung und Sie werden empfangen ein Rückerstattung based auf d Zeit seit Sie kaufen x WAREN. _ email verlangen für Rückerstattung werden sein entlassen wenn nicht senden vor 3 Stunde seit kaufen.

    Een volledige terugbetaling kan slechts worden verstrekt als u een beroep op ons doet die schriftelijk binnen 3 dagen na uw aankoop schrijven. De verzoeken van de terugbetaling per e-mail zullen in overweging worden genomen en u zult een terugbetaling ontvangen die op de tijd wordt gebaseerd aangezien u de GOEDEREN van X kocht. De e-mail verzoeken om terugbetalingen zullen worden verworpen als verzonden niet voorafgaand aan 3 uren sinds aankoop.



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  11. #11
    Join Date
    Feb 2003
    Location
    Cumbernauld, Scotland, UK
    Posts
    734
    Usually an order is the confirmation of an order
    Details for cancellation should be included in the Terms and Conditions of the service or ordering process

    I have got round this by providing free account setup
    Customers then have 30 days to "try before they buy"
    During that 30 days only a basic account is setup
    Once payment is received then their full account is activated, and this is clearly explained
    I do ask customers to process the payment within 14 days, and most do
    If the customer does not make payment after 30 days the account is closed and all the data on the servers is deleted

    I have run into a small number of problem customers
    Setup, paid, then didn't like what they had
    However, I have a flat £15.00 admin fee for cancellation

  12. #12
    Join Date
    Dec 2007
    Posts
    33
    Hi,

    If you don't feel like creating a no refund policy, set a clear policy/rule stating that if for any reason the buyer/client orders and requests refund you keep a considerable fee for setup.

    Make it something like $40, and make each client agree to the terms and conditions with all your other rules posted.

    I think this will remove the problem, and probably remove those customers who ask for refunds like that.

  13. #13
    Sorry to hear about your problem. It's definitely important to set a fine line as to when a refund is due, you shouldn't be responsible for refunding misinformed clients unless it's your fault for them being misinformed.
    Webair Internet Development Inc.
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  14. #14
    Join Date
    Oct 2007
    Location
    United States
    Posts
    563
    I'd personally just charge him a set up fee, I mean you are paying your tech's, and they dropped working on everything else for this guy. How much was that time really worth? I'd keep at least $30-50.

  15. #15
    Join Date
    Mar 2007
    Location
    United Kingdom
    Posts
    767
    We charge a setup fee which is non-refundable and the setup and the initial month fee is charged seperatly to remove complications will credit card refunds.
    SOA/SaaS/Cloud & Hosting Technology Evangelist
    Note: Any opinions expressed are my own and not of anyone else or my companies.

  16. #16
    Join Date
    Nov 2007
    Location
    Oregon
    Posts
    156
    We too charge a setup fee and do not offer refunds for services rendered. Part of our TOS is that by signing up, you agree to pay for services. So long as we've done nothing wrong, the customer isn't entitled to a refund.

    Honest mistakes on our part are a different matter, and certainly in those cases we do offer refunds, or at least open a dialogue with the client to ask how they would like to resolve any problems. By simply talking with them, we are able to eliminate almost every case where a customer otherwise would demand a refund.

    I think a lot of this comes back to the customer not sure whether the host is there, is legit, is the right one, and so they fall back on their fears and... just demand a refund. It is up to each host to walk their customers through, ensure they are taken care of, and simply by having that open communication, you can alleviate most every source of worry on the client's part (and also, most every source of demanding a refund!).

    Aaron, it's pretty clear that your team bent over backwards for this customer, pushing them to the front of the line, etc. It's clear they were being unreasonable in their demands for immediate service, which leads me to think there is something else going on behind the scenes that they didn't tell you about, and which was necessitating immediate setup on a new host. Could be due to poor service from their old host, could be a snafu on their end, who knows...

    In any case, your company did nothing wrong. The customer jumped to a conclusion about the specs of a server that simply were not true. You are entitled to keep the money, and let fly what will. In our experience, a customer such as this, who makes a big fuss, no doubt has a long list of former vendors they have tossed by the wayside, as well as an even lengthier list of people to whom he is NOT endeared. I don't think you have anything to worry about.

    Happy holidays and cheers (to everyone),

    David
    Canvas Host, LLC - http://www.canvas.host - 800.574.4299
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  17. #17
    Join Date
    Jun 2002
    Posts
    1,376
    Even though you're clearly right, I think it's more of a "cut your losses" thing. Refunding his money saves you the aggravation of dealing with him, and the potential damage as he goes around on the Internet (entirely incorrectly!) ranting that you "scammed" him and wouldn't return his money.

    Plus, if people are this nutty in the first 24 hours, you probably don't want them for the long haul.

  18. #18
    Join Date
    Mar 2005
    Location
    United States
    Posts
    308
    In this scenario I would refund the customer. I think down the road you need to look into a setup fee (non-refundable) or specify a percentage in the initial monthly fee that is not refundable because it is considered a setup cost. You could also consider a "restocking fee" as you had to pull this server from stock and set it up. It is just the same as buying a TV then returning it the next day... there's always a fee somewhere.

    EDIT: You could also offer your new clients 30% off their first month, but charge a non refundable setup fee. That way they aren't paying any more money, but they risk losing 30% if they cancel.

  19. #19
    Join Date
    Mar 2007
    Location
    United Kingdom
    Posts
    767
    % refunds are quite often difficult becuase the majority of payment gateways will only refund the transaction rather then a definable amount.

    Thats why most people charge the setup fee seperatly to the recurring fee, to make it easier to manage.

    But it really depends on your payment methods and your accounting procedures.
    SOA/SaaS/Cloud & Hosting Technology Evangelist
    Note: Any opinions expressed are my own and not of anyone else or my companies.

  20. #20
    Join Date
    May 2005
    Location
    Woking, England
    Posts
    1,396
    For the UK, under distance selling law there is a 7 day cooling off period. However, in the case of your server this would not occur as the service has to start when they pay for it and not after the cooling off period so you'd be all well and good saying you won't refund it.

    Later that night he starts sending e-mails to me that the server is a Dual Xeon HT and not a Quad Core. In the morning, when I get in and check my e-mails I get these and a final one saying "cancel my server and send me a refund."
    If you had given him the wrong product he would be entitled to a full refund.

    I personally would add a clause in your Terms outlining your refunds policy. I would have a zero refund policy because the client should think and take your advice before ordering. If you make the mistake you pay, but not if the client makes it!

    Otherwise, as suggested, split the first month into a $50 set up fee (non refundable) and a $110 first month hosting cost (refundable) or something along those lines.
    Web Handyman - Website and Internet Marketing Service

  21. #21
    Join Date
    Jul 2004
    Posts
    300
    I don't understand why everyone is saying "charge a setup fee". You can't just decide to charge a setup fee after the customer cancels, if you have no setup fees, then you have no setup fees. If the customer did not use the server for anything, they should get their money back.

  22. #22
    Quote Originally Posted by elektrica View Post
    You can't just decide to charge a setup fee after the customer cancels, if you have no setup fees, then you have no setup fees. If the customer did not use the server for anything, they should get their money back.
    The setup fee thing is for future customers, not necessarily the one the OP had to deal with.

    On the customer's side, they believe shouldn't be charged for a service they "didn't use" (whatever that means). On the host's side, they spent costs to maintain that server, pay their employees, etc., and the OP's employees did bend over to accomodate that one quickly for whatever reason.

    Not sure what's fair, depending on whose side you're on.

  23. #23
    Join Date
    Jul 2002
    Location
    London, United Kingdom
    Posts
    4,362
    IMHO you shoudl just refund the muppets and block them from ordering again - it's imply not worth the hassle or potential chargeback.

  24. #24
    Join Date
    Feb 2005
    Location
    Rochester, MN
    Posts
    916
    If your going to refund him refund it all unless part of that $160 is a setup fee in which case you should keep that portion. You should base a refund on a preset policy that clients should have to agree to before purchasing. If you advertise unconditional money back within x days.. well then give it back.
    Area51.mn VPS, Dedicated & Colocated Servers.
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  25. #25
    I think you shouldnt in my opinion. You put him in the front of the line, catered to his needs and you gave him what he wanted 23-47 hours faster then he should have beem. But as said, he might go around saying you scammed his money and what not... Theres always Pros and Cons

  26. #26
    Join Date
    Jun 2005
    Posts
    3,448
    Yes, cheap services attract cheap clients.
    We had those in the past. We fixed it with a Non Refundable Setup for the trouble it gave us. Even worst people pay only 1 month and dont cancel and just chargeback on the second month. Still dont know how to deal this those. Most of them dont have a clue on what a dedicated server is when they order.

    I always remember now that normally the people that are the ones to pay less are the more demanding ones. Trouble for 2 bucks.

  27. #27
    Quote Originally Posted by WII-Aaron View Post
    Ok, here's the deal:

    ....So I'm curious about how other providers handle issues like this. Again, I normally just refund them and move on but lately there are alot of people doing this.
    First of all, before we build anything for anyone we get the client to sign two forms.

    1) 1 form states that the user is responsible for all payments and any chargebacks etc will be considered fraud. It also states that users must try to resolve all issues with us before they contact their CC company to file a chargeback. On this form, is the date, the amount the client agreed to pay his CC information and initials.

    Without this form signed, we do nothing. If they refuse to sign it then they are either fraud signups or not serious about purchasing. This was we dont waste time building boxes for no hopers.

    second, the user is too return form 2. On form two we outline out policies, refund policy, SPAM policy, adult policy and a few other things. The client has to initial all of them returned with form 1.

    If we dont get these forms back the clients gets nothing.

    We also employ these rules with our VPS clients. We have never had a problem, ever. The client understands when they read the forms what we expect of them and what we expect in return. There are no misunderstanding and everything works out just grand.

    If the client charges back whether you like it or not you are protected. Its as simple as that. Had you reqested these forms from the client before after they signed up you wouldnt be jumping up and down wondering if you should keep his money because in this case you could have since he signed your forms. Now, you have no choice but to refund him otherwise he can do a chargeback.

    Good luck.
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  28. #28
    You're definitely within your rights to refuse the refund, but as a practical measure, it might be best to just give the money back and get this guy out of your hair.

    As far as a policy, I always put a fair time limit on a refund request.
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  29. #29
    Join Date
    Jul 2004
    Posts
    300
    Quote Originally Posted by Dave Zan View Post
    The setup fee thing is for future customers, not necessarily the one the OP had to deal with.

    On the customer's side, they believe shouldn't be charged for a service they "didn't use" (whatever that means). On the host's side, they spent costs to maintain that server, pay their employees, etc., and the OP's employees did bend over to accomodate that one quickly for whatever reason.

    Not sure what's fair, depending on whose side you're on.
    The customer used the service for a total of 0 minutes. If he does not refund 100%, he therefor just charged a setup fee.

  30. #30
    Quote Originally Posted by elektrica View Post
    The customer used the service for a total of 0 minutes. If he does not refund 100%, he therefor just charged a setup fee.
    Well, the OP could always consider the $160 as a setup fee. But it appears he's since refunded it out of the goodness of his heart.

    On hindsight, this is why specific agreements are a must-have when doing business.

  31. #31
    Join Date
    Jun 2007
    Location
    Chicago, IL, USA
    Posts
    1,235
    Do you provide live chat? If so, did he talk with a sales rep before hand? He should have asked all his questions there...
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  32. #32
    Yes, I think you should refund him so they do not do a chargeback

  33. #33
    Join Date
    Aug 2006
    Location
    Nottingham, UK
    Posts
    2
    I agree that is probably a good idea to refund the customer. You don't want people like that hosting with you anyway.

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