How offering a ‘no-quibble’ money back guarantee can increase your online sales
I recently had a rather bizarre email exchange with a guy who required some start-up advice for his online business. I say ‘bizarre’ because this chap, nice as he seemed, was adamant that he was not going to offer a money back guarantee on any of his products.
Taken aback is an understatement. I was shocked! Not least because this is potentially entrepreneurial suicide!
I have always advised you offer a money back guarantee with your products – it instils trust and confidence and you are likely to make many more sales by offering a no-quibble guarantee, be it for 14 days or 30 days – but like this gentleman, you may not realise that even if you decide not to offer a money back guarantee, your purchasers are legally entitled to return their goods within a certain time frame, even if they have simply changed their minds!
As an online seller you are operating a ‘distance selling business’. All this means is that rather than having a shop on the high street where buyers can come in and browse the goods you have for sale, instead you sell stock online, be it eBay, Amazon or via your own website. And, as a distance seller there are a few regulations that you need to stick by, namely to do with offering a guarantee for your products.
Unlike in a bricks and mortar shop, buyers who make a purchase online through distance selling are quite obviously unable to touch or see the goods before handing over their cash.
Although photos and accurate descriptions really help to let a person know what it is they’re actually getting, every so often a customer might be confused and left with a product which was not what they were after in the first place.
It seems only fair therefore that online (distance sellers) should offer some sort of guarantee to customers in the case of this happening, and this is the legal requirement that I’ve just mentioned.
You must offer a ‘return and refund’ period
The legal regulations concerning distance selling state that you must offer to refund the customer if the product purchased from you is returned within fourteen days, in its original packaging. This is the minimum legal cancellation period. Of course, there are exceptions to this rule, for example for perishable goods such as cakes, bread, dairy products and other foodstuffs, but even items sold using the auction format on eBay are required to comply with the distance selling regulations. So, it is important that you understand exactly what the legal ramifications are for your online business in terms of offering a guarantee.
Where to find out more
The information available on this is quite detailed, so I recommend you head over to the dedicated government site and take a look at the information provided in relation to distance selling.
No-Quibble guarantees help make sales!
As I’ve mentioned, personally I’m a big fan of including a guarantee with all products. There’s nothing like offering a customer their money back should they not be totally satisfied because it builds consumer confidence. Your guarantee can often be the final thing that seals the deal and convinces a customer to make their purchase from you rather than another seller, after all, if you don’t believe in your own product you certainly wouldn’t be offering to send someone’s money back if they aren’t happy with it would you?
Of course, there are a few buyers out there who could try to take advantage of the money back guarantee that you offer, but this is incredibly rare. In fact, in more than 12 years of selling online, I can honestly only think of a couple of handfuls of instances where I’ve ever had to provide a no-quibble refund, and I’ve always offered a 30 day money back guarantee – so please don’t think that everyone will suddenly start requesting a refund, just because you offer it. They won’t!
What to do next
Have a think about the sort of guarantee that you could offer to your customers right now. Granted, if you legally have to offer a fourteen day refund then you should make that clear in your terms and conditions, but could you go above and beyond what the law requires and go for a 30 day money back guarantee like I do?
If so have a think about the different types of guarantees that you could utilise for your business:
- Money Back Guarantee. This is the basic guarantee that means a buyer can return an item if it turns out to be something other than they expect or if, for example, it’s an item of clothing that doesn’t fit. The item to be returned must be unused and in its original packaging for the refund of the product price only.
- Satisfaction Guarantee. One step up from the Money Back guarantee, this Satisfaction guarantee means that you will accept any item back if it develops a fault within the specified timeframe, and also demands that you would return both the value of the item and the cost of the postage in sending it back to you.
- No-Quibble. This is the daddy of all guarantees, as it allows a buyer to return an item within the time period you have chosen, with no questions asked, even if the product has been used. Chances are you won’t be able to resell something that is returned under this guarantee, but it is the most effective for building confidence as a fair businessperson.
If you haven’t already done so, why not have a look into your legal requirements as a distance seller and have a think as to whether you could offer a guarantee that’s even better than the law requires in order to build confidence in your service.
It’s another little trick that you can use immediately to increase sales…and your profits.