Do I Refund? Navigating the Tricky Waters of Customer Cancellations and Returns
Recently I had a client in our Facebook Group Chat – The Breastmilk and Memorial Jewellery Group ask a question about refunding a specific situation, as a cancellation. I outlined some important points to consider and it’s prompted me to write a blog. As a business owner, whether you’re selling handcrafted goods online, running a bustling brick-and-mortar shop, or offering a personalised service, the question of refunds will inevitably rear its head. It’s a delicate dance between keeping your customers happy and protecting your profits. So, the burning question remains: Do I refund?
The short answer? It depends. There’re always unique circumstances.
There’s no one-size-fits-all answer, and you have to think about a few things. Saying no outright can lead to angry clients, bad reviews, and even legal issues. On the other hand, being overly soft can impact your profitability and most of us are here to feed our families!
Let’s check out some key points to help you make informed decisions:
1. Your Refunds Policy: The Cornerstone
Right at the start you need a clear, concise, and easily visible refund policy. Whether or not your client reads it first, it’s your defence and your clients’ guide. It should state:
- Which items/services are eligible for a cancellation or refund? Be very specific. Are personalised items included in your refundable items? If so, are they only refundable until you’ve ordered the settings or until you’ve started, or not refundable at all?
- If you refund, do they need to return? If it’s an order with their ashes (for example) that are already made, you will neither want them back nor should the client be expected to part with them. You usually won’t be able to return a setting if it’s been used anyway. Personally on Tree of Opals I would be unlikely to ever allow a return on a keepsake unless it were faulty and I wouldn’t require a return unless it were a non-inclusion item such as an engraved-only necklace. Even a stacking ring, made to custom size, I can refuse to refund.
- What are the refund conditions? What constitutes a valid reason for a cancellation?
- What is the timeframe for a refund? 7 days? 14 days? 30 days? Be realistic and comply with any legal requirements in your region.
- How will the refund be processed? Will it be a full refund, store credit, or an exchange? How long will it take? Again, you must comply with any legal requirements in your region.
- What are the steps for initiating a refund? Who should the customer contact? What information do they need to provide?
Having a well-defined policy sets reasonable expectations from the beginning and minimises the grey area when a refund request arises. Make sure it’s prominently displayed on your website, at the point of sale, and even on invoices. I like to link in my terms and conditions to the law here in my area (England and Wales) which states a client’s right to return an item bought online unless it’s customised, or not of satisfactory quality HOWEVER there is also a rule here that states the “satisfactory quality” rule doesn’t apply if the client sends in their own materials used in the process. It’s to protect retailers who use, for example, use a client’s own marble to make a bathroom and the marble falls apart, the builder can’t be at fault. It’s good to find out if this rule exists in your area.
2. The Reason for the Refund Request: Understanding the “Why”
Not all refund requests are created equal. Understanding the reason behind the request is crucial for making a fair decision. Common reasons include:
- Change of Mind Cancellation: This is where your policy comes into play. You are generally not legally obligated to offer a refund for a change of mind if a piece is customised, but offering store credit or an exchange can be a good compromise for customer satisfaction. If your client has had a major emergency you might consider it, especially if your setting supplier will refund you. If you’ve bought something from me at Keepsaker Supplies, contact me on a case by case basis.
- Faulty or Damaged Goods: This is often a clear-cut case for a remake or replacement. You are responsible for providing goods that are fit for purpose even if they do contain someone’s own ashes etc. Usually the client will be happy with a remake. You can avoid this in the first place by using good quality findings and settings and sending proof photos before completing and sending the order
- Item Not as Described: If the product doesn’t match its description (size, colour, features), again you can avoid this with proof photos. Let clients know in the terms and conditions that this is an art not a science, so the colour of their jewellery may be dependent on the colour of the hair and ashes they provide, for example.
- Delivery Issues: If the item was lost due to your shipping provider’s error, you may need to consider a refund or replacement.
- Service Not Performed as Agreed: If you failed to deliver the service as promised, a partial or full refund might be necessary.
3. Customer History and Relationship: The Human Element
Consider the client’s history with your business. Are they a loyal, repeat customer? Handling their request with extra care might be beneficial for long-term goodwill. While this shouldn’t override your policy entirely, it’s a factor to weigh.
4. Legal Obligations: Knowing Your Rights and Responsibilities
Familiarise yourself with consumer protection laws in your region (e.g., the Consumer Rights Act in the UK). These laws often dictate minimum requirements for refunds and returns, particularly for faulty goods or mis-described items. Ignoring these laws can lead to legal trouble.
5. The Cost-Benefit Analysis: Balancing Customer Satisfaction and Profitability
While keeping customers happy is paramount, you also need to consider the financial impact of refunds. Repeated or unwarranted refund requests can significantly affect your profitability. Weigh the cost of the refund against the potential loss of a customer and the negative impact of bad reviews.
Making the Decision: A Framework
Here’s a simple framework to help you navigate the “Do I refund?” question:
- Does the request fall within your stated refund policy?
- Is the reason for the refund valid (e.g., faulty item, not as described)?
- Are there any extenuating circumstances to consider (e.g., significant inconvenience caused to the customer)?
- What is the potential impact on customer satisfaction and your reputation if you refuse the refund?
- What is the financial impact of granting the refund?
Ultimately, the goal is to find a solution that is fair to both your business and your customer. Sometimes, a full refund is necessary. Other times, an exchange, store credit, or a partial refund might be a more appropriate resolution.
Key Takeaways:
- Have a clear and accessible refund policy.
- Understand the reason behind each refund request.
- Know your legal obligations.
- Consider the customer’s history and the potential impact on your reputation.
- Weigh the costs and benefits of granting a refund.
- Communicate clearly and professionally with the customer throughout the process.
Navigating refunds can be challenging, but by having a solid policy, understanding the situation, and prioritizing fair and transparent communication, you can turn potentially negative experiences into opportunities to build customer loyalty and trust.
In the specific situation my client told me about, with a client requesting a cancellation because she no longer has milk, this was my answer.
There are two issues to consider here. I studied law here in the UK but I don’t know much about USA, AU and Can laws.
1. Her legal rights. Here in the UK she technically wouldn’t be automatically entitled to a refund because it’s a customised piece. If she hasn’t sent in the milk though, you won’t have yet been able to fully customise the piece. You may have purchased supplies, but under the UK law that wouldn’t be customisation unless the engraving has been done or it’s been made specifically to order. It’s a grey area here and case by case. If I made a client a size X ring (not too common) I could argue I’m unable to resell it so the customisation is already done. If it’s engraved then no full refund. However, if you’ve only bought a US size 6 ring (standard size) or a necklace setting etc then that’s not customised and here she might be entitled to a refund. Depends on the specific laws where you are.
2. Your duty as a business. You have a moral duty to provide good customer service. Here in the UK any customer can cancel UNLESS certain requirements are met (customisation etc) and I feel that’s right and correct. If I haven’t started then yes I’ll refund because ethically that’s the right thing to do. It also protects my business and ensures fairness. Anything you’ve already paid out perhaps can be deducted and an admin fee if it states so in your terms and conditions, otherwise a full refund and best wishes.
3. Middle path. As a Buddhist I like to try to always find the middle path, especially with customer interactions and resolutions. Firstly I’d be saying, don’t worry, just send me a lock of your baby’s hair and we will do a white background to REPRESENT your breastmilk, it will still contain all the love and sentiment of your amazing journey. As a little thank you I’m going to make you a little dangle charm (etc) as a gift as a thank you for your understanding.
If they refuse, then refund in full unless you’ve already spent money on the order. If you’ve ordered a ring from me for it then I’ll take a return on this occasion no matter what the size. As a goodwill gesture I’ll even take a return with engraving.
If you don’t refund it will come back to bite you and it’s bad customer service IMHO. I had a client force a refund once for a solid gold ring (hundreds). It went through PayPal. I called PayPal and explained it was customised and even though she hadn’t yet sent the milk, they sided with me. However the lady rang me in tears and asked nicely for the refund and I did it. One year later she ordered again and told me her ex wasn’t very nice and had forced her to get the refund. At the time I was actually experiencing domestic abuse myself in the form of financial abuse and hadn’t admitted it to myself but this was one of those little red flags I needed to realise it. Anyways, she was super happy with her ring.
Please refund and the client will probably come back to you in a year if she has another baby anyway. Not to be a bitch, but please put yourself in her shoes. This sounds really traumatic for her and $300 probably makes a lot of difference