Refund policies

Contents 1 What is a refund policy? 2 Why a refund policy is needed 3 To refund or not to refund? 4 How to write a refund policy 5 See also

What is a refund policy?

A refund policy is a written statement that explains in what circumstances a provider will provide refunds, for how much (partial or full refunds), and for how long after the purchase is made. Sometimes a refund policy is "No refunds."

Why a refund policy is needed

Even if you don't give refunds, you need to have this written as a policy or the lack of a policy could be used against you. It's unfortunately common for disgruntled web hosting customers to post in the Web Hosting Talk forum to complain about their host to ultimately get a refund. Whether the customer is in the right or the wrong doesn't change the pattern of the thread. You will have negative publicity, and if you can't point to a clear refund policy for your company, the thread could go on for a long time.

Even when disputes are not public, they can take a lot of your time, more time than the amount of the requested refund is worth. It's much easier to resolve disputes when you have a refund policy in place that outlines whether you provide refunds in various types of situations.

To refund or not to refund?

A generous refund policy can cost a web hosting provider money. Not having a generous refund policy can also cost a provider money. Sometimes it makes sense to make it easy for customers to get a refund. They'll leave happier, and they might be back or tell friends about you.

Sometimes customers demand a refund, and sometimes publicly, when they're clearly at fault but they leave out key details about their actions when they describe what happened. Some web hosts will give a refund when this happens to make the problem go away, while others will not allow themselves to be bullied into giving a refund, even when their reputation may be damaged by the customer's online claims.

Providers need to weigh the pros and cons of refunds in every possible situation before deciding on a refund policy.

How to write a refund policy

A refund policy needs to be clear and precise. For an online business such as web hosting, native and non-native English speakers must be able to understand it. If you sell services or products for amounts that someone might want to go to court over, the refund policy needs to be able to hold up legally if necessary.

Refund policies should include these details:

• The time period in which you offer refunds. If this time period is not the same for all the services and products you offer, spell out the different time periods for refunds for your services and products.
• The amount of refund you offer if it isn't a full refund, and if it's a partial refund, how you calculate how much refund is given.
• Whether you offer refunds after cancellation of services. If you do, explain how much notice is required before cancellation for a refund to be given and at what point no more refunds are given.
• Any circumstances in which you offer refunds well beyond the purchase date, such as after an amount of downtime that kept you from meeting your uptime guarantee, and again, how you calculate the amount of the refund.
• Any conditions in which you will terminate services, such as for illegal activity or when the customer violated the Terms of Service, and if you provide refunds for any amount in these circumstances.

See also

• E-commerce terminology
• Service Level Agreement
• Terms of Service
• How to increase return e-commerce business
• Money-back guarantee