What’s the #1 reason you’d give a refund?
Has a customer ever said, “I should get this for free!” Implying because they did not like your product, they should get the product free? As a small business owner, you’ll quickly learn not all customers will like your product. A refund request is imminent. There may come a time when a cancellation, refund or return may be in order.
What will you say when a customer walks up and says, “Give me a refund, I can’t eat this.”
- What would you do? Would you issue a refund?
- Do you have a pre-established process for handling this type of request?
- Draft a set of emails to send
- Who handles complaints about your business?
- What would you do if I told you I want a refund for your product or service?
- Is a pre-established process for handling this type of request in place?
The Refund/Complaint Scenario
After a really great production run a customer you thought was totally happy with the product calls and asked for a refund. This experience can totally paralyze may small business owners.
It absolutely sucks when someone tells you that they don’t love your product.
- Refunds happen
- Know your nature
- Be kind and gentle (service without a sense of attitude)
- Make your policy super clear
- Pre-write email responses
- Outsource this responsibility
Let’s look at a few policies you’ll want to consider.
Customers can rarely return perishable food. Create a refund policy if damaged or contaminated occurs. How you word your Refund Policy is up to you. You may want to speak with an attorney.
Would this statement be a consideration for your business?
- Perishable food products cannot be returned.
- Please contact us directly at XXX-XXX-XXXX to resolve problems with your order.
Refunds (if applicable)
If a customer sends a photo of the product, showing the damage. You can ask them to bring the product back or resolution. email to notify you that we have received your returned item. If a refund is in order that is your decision. You can also offer a gift certificate or a percentage off their next order.
Return Policy vs Give a Refund
Return policies are rare when the product is food. That does not mean you should not have a policy that sets guidelines.
The guidelines determined by the foods you sell. If you sell celebration cakes and you write the wrong message, own up to it. Make a decision on how you will compensate the customer.
If you are preparing a custom order for a customer and they paid a deposit, you may want to forfeit the deposit. You can also make it a general rule once an order is received and confirmed, cancellations are not allowed. Consider no cancellations within X number of days from delivery. Consult with an attorney if you are not sure of the verbiage.
Only you can determine the policy that is best for your business. If you have concerns investigate the policies of other businesses in your industry.
Why Give a Refund?
There is no such thing as free food in the Cottage Food Industry. One of the primary ways a Cottage Food Operator can avoid getting stiffed is to get paid first. Avoid making a product and agreeing to accept payment upon delivery.
The work you do is often custom or made to order. The customer came to you because they believe you have skills and will do an amazing job.
Why should you have to do the work first and then get paid? You give the customer all the power. At any time they can decide not to pick up the order and you are stuck with an unpaid product.
Below are a few strategies you can use to assure you get paid what you’re worth.
- Ask for payment upfront.
- Request a minimum of 50% upfront. *nonrefundable
- Draft a refund or return policy. * food should not be returned
- For orders over $100 consider a contract to address all aspects of the order.
- Decide during the startup phase of your business how you will address complaints.
- If you are not the sole owner of the business, decide who has the best temperament to address an unhappy customer.
Another article you may want to review is how to address hate email.