The $100 MBA Show MBA2630 Q&A Wednesday: Is My Refund Policy Too Generous?
May 28, 2025
Is your refund policy working for or against you? Discover the fine line between being too generous and too strict with refunds. Learn how a well-structured policy can boost conversions while building customer trust. Get insights on adjusting your target audience or product to manage high refund rates effectively. Plus, actionable tips for crafting a fair refund process that keeps customers happy and protects your business. Make refunds a strategic advantage and streamline your customer relationships!
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Refund Policy Builds Trust & Risk
- A generous refund policy can increase conversions by reducing buyer risk and building trust.
- Too vague or lengthy policies invite refund abuse and discourage customers from fully engaging with your product.
Ideal Refund Rate Benchmarks
- Industry data shows online course refund rates vary, commonly between 8% to 12%.
- Omar suggests aiming for refunds below 5%; higher rates indicate product-audience mismatch.
Set Clear, Balanced Refund Terms
- Set refund windows to allow customers enough time to evaluate and benefit—typically 14 to 30 days.
- Clearly communicate refund request steps to make the process simple and build buyer confidence.