136: How to Handle Refund Requests
Refunds happen. They're not fun, but they're a rite of passage that most of us must learn to manage even though we wish we could avoid it. As someone who has had that pit-in-the-stomach experience of opening your inbox to see an email with the subject line "Refund request," I've found that they're much easier to handle if we prepare for it in advance.
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Refunds happen. They’re not fun, but they’re a rite of passage that most of us must learn to manage even though we wish we could avoid it.
As someone who has had that pit-in-the-stomach experience of opening your inbox to see an email with the subject line “Refund request,” I’ve found that they’re much easier to handle if we prepare for it in advance.
Today I’m sharing primary, secondary, and tertiary prevention strategies you can use to create a plan that you can turn to when a client requests a refund.
Before we dive into the logistics and tools, I want to emphasize that as ethical coaches, refund requests do not say anything about your worthiness as a person or as a coach. They’re just a part of doing business. I hope this episode will give you some structure and guidelines for handling refund requests and the complex emotions that can come with them.
- Resetting your thinking around refunds
- How clear communication can minimize the number of refund requests we experience in our coaching practices
- Key elements to include in your coaching contracts and terms and conditions documents
- Red flags that suggest someone might be thinking about asking for a refund
- How to partner with a client considering a refund to find a mutually agreeable solution
- What to do once you receive a refund request
- Create a plan for taking care of yourself emotionally and energetically
- Coach with Clarity Collective
- Connect with Me on Instagram
- Connect with Me on TikTok
- Email Me: firstname.lastname@example.org
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Well, hello there, my friend. Welcome to the Coach with Clarity Podcast. I'm your host, Lee Chaix McDonough and I am so honored that you are joining me for today's episode. If you are a longtime listener of the Coach with Clarity Podcast then you know, I really make an effort to balance the topics for the podcast when it comes to the craft or the art of coaching, and the business of coaching. And today, today is going to be more of a business oriented episode. And in fact, I will be addressing a topic that no one wants to think about, no one wants to talk about, and yet everyone has questions about. That's right. Today we are talking about refunds and what to do if you have a client or a student or a customer request a refund from you.
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I think this topic is a little taboo because there is a sense that if someone is requesting a refund from me, then I must have done something wrong. On some level, I must have failed if this person is asking for a refund. And so before we get into all of the logistics and how to’s when it comes to refunds, I just want to take a moment to pause and reset our thinking around refunds. Now, I am going to make an assumption here, because you are a Coach with Clarity Podcast listener; my assumption is that you are someone who prioritizes ethical behavior in your business, and that you are committed to providing the highest quality of coaching services and products to your people. So making that assumption, I can safely say that if someone is requesting a refund for a good or product or service that you have delivered, it is not because you as a person have done anything wrong. It is far more likely that the refund request has something to do with the personal or professional circumstances that your customer is facing. There may be a financial concern present for them that is making it so that they can no longer safely afford your product or service. It may be that they didn't do their due diligence, they didn't read your sales page, or they weren't clear about what they would be receiving from your product or service. And it may simply be that they're just not a fit for the work that you do. All of these things have more to do with the customer or client than they do with you. So because I know you are a coach who is dedicated to providing the highest quality service or product to your people, and that you do so in a way that is grounded in strong ethics. So you are not coercing people to work with you, you are not using sleazy sales tactics. Because I know this about you, I know that these refund requests are not personal.
Now I say that because I know that refund requests can feel incredibly personal. And I say that as someone who has received refund requests, everything from a $27 product that I've offered, all the way up to a four figure purchase. So I have received refund requests for all of it. And I know that pit in your stomach you get when you see that email, and that subject says “Refund Request.” I get it. Refund requests are not fun, they're not fun for you as the coach, they're also not pleasant for your client or customer. So that's why in today's episode, I want to talk both about what to do when someone requests a refund. And also the steps that we can take to prevent refund requests from happening in the first place. But before we even dive into that, I just want you to know, refund requests do not inherently say anything about your worthiness as a person or as a coach. They are a part of business. If you've not yet had a refund request, my friend, just wait. It's coming. It's a rite of passage, I think. And so hopefully, this podcast episode will provide you with some structure and some guidelines for handling refund requests.
So let's start with the concept of prevention. And now my public health routes are about to show as many of you know, I have a Master's of Social Work and a Master's of Science in Public Health. And so I'm always looking at things through the lens of prevention. And in public health, we actually talked about three levels of prevention, primary, secondary and tertiary – 123. And I think it's really helpful to apply this approach when we're looking at things that we want to prevent in our businesses as well. So when we're talking about primary prevention, we're talking about how to prevent something before it even starts. Secondary prevention is about detecting something early, and intervening quickly to prevent it from getting worse. And then finally, tertiary prevention is how do we actually handle this once it is happening. So that's more like intervention. So I want to approach discussing refunds using this primary, secondary and tertiary prevention approach. So let's start with primary prevention, how can we minimize the number of refund requests that we are experiencing in our coaching practices? Well, the very first thing, and I've alluded to this already, in terms of the assumption that I am making about you as a coach is that we want to make sure that the product that we are providing, whether it's a coaching service, whether it is a book, a course, a download, whatever it is, that we are selling, we want to make sure that we are doing so from a place of our highest integrity. That we are following through on what we've promised, so that we are delivering what we've told the client we're offering. We want to make sure that we are acting in integrity. So that means clearly articulating expectations around what we're providing, so that our clients know when they pay for this service, “This is what I'm getting, this is what I can expect. And also this is what is not included in what I'm paying for.” So in essence, preventing refunds starts with providing a high quality service or product, being really clear about what that product or service includes, and making sure that our clients and customers understand all of that, before they hit that Buy Now button. This is why it is so incredibly important that you are clear about what it is you are providing. And you can do this in a number of ways. Certainly, you can do this in a sales call. So if you are having a zoom call, or a phone call or a conversation with someone, you are clearly explaining the benefits and expectations from working with you.
So if we're talking about a coaching package, your client is clear on how many times you're meeting, how long you're meeting, the type of contact they can expect from you between sessions, any additional resources you're providing, we want to be explicitly clear about that. We also want to address the potential results a client can achieve, and the level of commitment and work the client will need to put in outside of the coaching sessions. This can be a little tricky, because in sales, we want our client to understand what's possible for them, and how our service or our product can help them get there. So we want to paint a picture of what's possible, and talk about the ideal results. And we also have to be clear that our program or service is not a magic wand. It's not simply that they buy something and then automatically this is going to happen. That's not how it works in coaching, at least. It is going to require a level of commitment and dedication from the client. It requires that they take action on their own outside of the coaching session and beyond the coaching relationship. And so that's why it's important that whether it's on a sales call or on a sales page, you are really clear about not only what is included in your service or product, but also the expectations you have for that client or customer in terms of how they will use your product or your service. In addition to talking about this on a sales call or on a sales page or on an email, however you are communicating it, you also want to make sure that you are addressing this in your written agreements with your clients. These written agreements are so important because they protect you as the business owner and they also provide additional clarity for your client or customer. So if you are engaging in one on one coaching, I strongly recommend that you have an attorney prepared coaching contract that you are using with your clients. Now, there are lots of options out there in terms of finding that template. Of course, my favorite is inside the Coach with Clarity Collective. That is my group coaching program. I'm really proud of it and one of the benefits of being inside the collective is that you have access to an attorney prepared coaching contract template that you can take and tweak and use with your clients. It will help ensure that you and your clients are on the same page from the very beginning. And inside that template, we walk you through how to include what is in your coaching package. And there is also language around your refund policy right there in the template. It is so important that you are clear on what your refund policy is and that you have clearly stated that on your sales page, in your sales calls, and yes in this written agreement as well.
So for one on one work, I highly recommend using a contract. If you have a group program, you may not need a contract, especially if it's a larger group program, you may want to use terms and conditions. So for example, when someone joins the Coach with Clarity Collective, because it is a larger group coaching program, when they go to the sales page, and they enter their name and information and their credit card or payment information, there is a little box there that says “I agree to the terms and conditions.” And they have to check that box before they are able to pay. And I have hyperlinked terms and conditions so that when they click on it, it opens up a separate web page. And it details everything that they can expect from the program, as well as the refund policy. It's very similar to a contract, but it's a little more global in perspective. And instead of requiring a signature, it simply requires that they check that box before they pay. I also include those terms and conditions inside the welcome module of the Collective because again, I want to make sure people are aware of what they are consenting to, what they are participating in, and if they ever have questions, they can always go back and find those terms and conditions easily. So whether you use a contract, or whether you're using terms and conditions, make sure you're really clear in that document about what it is you're providing, the expectations your client or customer can have, your refund policy, and all of the other logistics that are involved in your program or service.
So when it comes to primary prevention for refunds, it really is about communication. And making sure from the beginning that everyone is on the same page with what's expected and that people are informed in advance of your refund policy. So this leads to another question, which is well, what should my refund policy be? Do I have to offer refunds? And the short answer is, it's your business, you get to set your policy, you get to decide how you want to move forward. Generally speaking, in my business, I have a no refunds policy, because I feel really clear about my sales process and how I communicate with my clients. And yet, there have been times in my business where I have issued a refund from everything from that $27 product all the way up to a four figure investment. Within my refund policy, I generally state that I don't offer refunds. And I also reserve the right to amend this policy in the future. And this allows me to offer grace, when I choose to. The times that I have issued refunds in my business, it's generally because someone has moved on to a different place in their business, maybe they're no longer coaching, maybe they've had some significant changes in their personal or professional life that is affecting their ability to safely afford my services. There are all sorts of reasons why someone might request a refund and to be honest with you, on some level, that's not my business, I don't make it my business to get inside my clients wallets, they understand their finances, they understand what they're committing to, and it's not my job or responsibility to talk to them about what they should or shouldn't do. I'm here to provide a service, which is really powerful coaching and instruction. And I trust that if they're engaging with me, they're ready to make that commitment. If they're requesting a refund, something has happened that is causing them to question whether they're able to continue making that commitment. So I will have a discussion with them, we'll kind of see where we're at.
And then this brings us into the secondary prevention piece of preventing refunds. So, secondary prevention is about detecting something early and intervening early. So if I get the sense that something's not working, or there's a concern here, if they've reached out to inquire what my refund policy is, then we go into the secondary prevention mode. Oftentimes, what's happening here is there's a misalignment between what the client actually needs and what they've purchased. So it's not necessarily that they don't want to work with me. It's more that “You know what, this isn't really meeting what I need right now.” So then what happens is I engage in a conversation with them sometimes via email, sometimes through a zoom call, but my role is to assess what it is they really need. And if there is a way that I can meet that need, then instead of issuing a refund, I'm more likely to switch out my offer. Now I have done this before when someone has registered for a group coaching program, and they've really realized, “You know what, I really need more one-on-one assistance than what this program is able to provide.” So that's when we have a conversation. And I can say to them, “Alright, you've already invested this much in the group program, you've got a couple options, we can take what you've already paid and apply it to one of my one on one offers, whether that is a single session or whether it's a longer package, or we can take that payment, and we can apply it to a different type of group program that offers more one on one service.”
When I approach the conversation from that perspective, the client and I are typically able to come to a resolution. So it doesn't require that I'm refunding what they've paid. But it does require me to adapt what I'm providing. And so in that sense, I think secondary prevention can be a really important tool inside your coaching business. It's also a great way to build a relationship of trust and understanding with your client. So instead of automatically refusing to work with them, and saying, “I have a no refunds policy,” you're demonstrating a willingness to work with them, while still holding true to the energetic boundaries that you've set around your refund policy. In this way, we're modeling the behavior that at least I hope that my clients are exhibiting with their clients too. And we are partnering with them to really come up with something that's going to better meet their needs.
Another option when it comes to secondary prevention is to postpone your work with the client. So this is something I have done when a client is facing a short term situation that is preventing them from fully engaging in coaching or in a program, maybe they've had an illness come up or they are a caregiver for someone, maybe they've hit a financial hiccup. And so what I can offer is to press pause, and then allow them to start back up in the future. So in essence, what they've paid thus far becomes a deposit on future services. I've done this for one on one work. And I've also done this for group programs where I know I have another cohort coming up. So if you're not able to move them from one program or service into another, you may want to explore postponing involvement, until they're at a point where they're able to invest financially and energetically with you.
So when it comes to primary prevention for your refunds, it's all about communication, setting clear expectations, and making sure everyone is on the same page from the start. Secondary prevention looks at preventing the refund after something has already happened. So instead of being in a position where we're refunding someone's payment, instead, we're moving them into a different product or service that may better meet their needs. So now it's time to talk about tertiary prevention when it comes to refunds. And in essence, this is the refund request has come in, what are you going to do about it? They're not interested in postponing or switching services, they want a refund. All right? Well, the very first thing we need to do is to do our own work. Okay, we need to pause and take a breath, we need to calm the body, clear the mind and remind ourselves that although this can feel intense, and although this can be uncomfortable, it is a part of doing business, it is a business transaction, it does not mean anything about you as a human being. And I know that based on those assumptions that I've made about you in terms of being an ethical coach who really puts their client's needs first and wants to serve them powerfully. So before we respond, let's do our own work to bring ourselves into a regulated state, where we can address this calmly and neutrally with our client or customer. Once I've taken some time, whether it's a few minutes, a few hours, even a day or two. Once I've taken that time to regulate myself, then the next step is to get curious. And it's to ask questions of your client or customer to learn more about why they're requesting the refund request. Once we have that info, and we really understand what's going on, then we can decide what path we wish to take. And we do have options here. In fact, we've already talked about some of them. Certainly if you have a no refunds policy, and it is explicit in your contract or your written agreements that you do not issue a refund, you don't have to issue a refund, you can politely decline. Now that doesn't necessarily mean it's the end of the story. If your client has paid using a credit card, they can issue a dispute with their credit card company and they can request that the credit card company intervene and pull the payment back. Like a clawback. It doesn't happen a lot, but it does happen. And unfortunately, credit card companies have a tendency to side with the consumer, not with the business. So just know that even if you have a no refunds policy and you're clear about it, your client may still pursue a refund through their payment source, typically a credit card or maybe PayPal. Now, if that happens, all is not lost, you are still able to appeal that decision with the payment source. It often means providing documentation of your refund policy, the fact that the client was aware of this and consented to it. Even still, though, I have heard stories where business owners have done all the right things, and their payment is still clawed back. So I just want to be honest with you, from the very start that you can have a no refunds policy but that doesn't necessarily mean that your client can't get a refund if they go that route.
That's why I want you to be prepared, and why I think it's so important that we treat this as an opportunity to partner with the client to figure out what's going to work best for them. So you can say no refunds, I'm not offering a refund, you can offer an alternate solution, like we discussed before maybe moving them into another program or postponing. But if your client or customer is not interested in that, then you may be looking at issuing a partial or a full refund. Now, if this person has received services from you to date, whether they've been a private coaching client or they've been in a group program, it may be appropriate to issue a prorated or a partial refund. That way they have paid for the services they receive from you thus far. So you've been compensated for your time and energy to date. But then you offer the partial refund that covers the services they would have continued receiving had they stayed on with you. So oftentimes a partial refund is a way to go. And then there may be times where a full refund is energetically better for all involved. I recognize that this can be a tough choice to come to as a business owner, it is not fun to issue a full refund, especially if the person has already accessed part or all of what you've delivered. And yet there are times where it is in everyone's best interest, yours included to offer that refund if it will save you time and energy and heartache down the road. It's also totally understandable if you are harboring a little resentment about having to issue a refund to someone that is a normal reaction to that situation. And I know it doesn't feel good. I know it's kind of uncomfortable, and yet it's perfectly understandable. So if you are feeling angry or upset or resentful, or sad, or guilty, any of those feelings around a refund, please know that that is totally understandable. This would be a great opportunity for you to work through some of those feelings with your coach or with a trusted business colleague.
It may also be an opportunity for you to do some inner work, even some healing around this refund. I can share that I'm thinking about one issue in particular, where after I issued the refund, I did a cord cutting ritual, where I imagined that I was energetically connected via this energy cord to this person. And I cut the cord I released them, I returned their energy to them and pulled my energy back to me. I wished them nothing but goodness as they moved on. And then I felt like we were done. Energetically we were disconnected, financially the refund was issued and now we can move forward. So regardless of what decision you make, about whether to issue a refund, how much to refund, how to move forward, I strongly encourage you to have a protocol in place. Think about this ideally before it happens. And also think about how you will take care of yourself personally and professionally after a refund is issued. Because in business refunds happen. Hopefully they're not happening a lot, but they will happen from time to time. It's normal. So let's prepare for them. Let's pull in these primary, secondary and tertiary prevention strategies so that we have a plan ready to go if and when a client or customer requests a refund. And with that, let's head into this week's Clarity in Action moment.
For this week's Clarity in Action moment, I am asking you to audit your current refund policy. I want you to take a look at your written contracts, your terms and conditions. Anything that you have in your business that articulates your refund policy. I want you to go back and read it. Look at the language you're using, and ask yourself how you feel about it? Is this the policy that you want to have in place in your business? Is there anything that needs to be tweaked or changed? Then I want you to make sure that you have that refund policy easily accessible to your clients and customers. So making sure is it on your sales page? Do you have an FAQ section that addresses your refund policy? If you have a group program or a membership, is your refund policy accessible inside your portal or wherever it is you house your content? So in this audit, I really want you to take a look both at the language of your refund policy to make sure it still accurately reflects how you want to approach refunds in your business. And I want to make sure that that refund policy is located in all the places where it needs to be, specifically your coaching contracts, your terms and conditions and on your sales pages. Now, if you don't have a refund policy in place, that's okay. In fact, that's the purpose of an audit to see what we have and what we don't have. But I want to strongly encourage you if you do not have one in place. Let's add that to your business. Let's make sure that we have a robust refund policy in all of your written documents so that you and your clients are on the same page. And of course, if you need support with that, come on over to the Coach with Clarity Collective, where one of the many benefits of being a Collective member is having access to that attorney-prepared individual coaching contract template. And yes, we have refund policy language in there for you to use as is or to modify based on your business needs. So to learn more, head on over to coachwithclarity.com/collective, where you can learn all about what you get as a Collective member. The four live calls a month, access to the Coach with Clarity Vault, which includes that coaching contract, all sorts of trainings and templates and guides, you will be blown away at what is waiting inside the collective for you. So head on over to coachwithclarity.com/collective To learn more, to join and to get your hands on that coaching contract template.
All right, my friend. That is it for this week's episode of the Coach with Clarity Podcast. And I want to thank you first off for spending almost 30 minutes of your time with me this week, especially talking about an issue that can be as activating as refunds. I know it's not fun to talk about. But these are the kinds of things that when we can prepare for them in advance. It may make it just a little easier to handle when it happens in the moment. And again remember, refund requests happen, they're a part of doing business and they are not a reflection of who you are or how you operate as a coach, as a business owner and as a human being.
So if you have any questions about how to handle refunds in your business, let's continue this conversation. You can find me on Instagram and on TikTok @CoachWithClarity and I would love to connect with you then. I will also connect with you next week with a brand new episode of the Coach with Clarity Podcast so make sure you are subscribed to the show. It is free to subscribe just hit that little plus sign or follow or subscribe button in whatever platform you're using to listen to the show. That will make sure next week's episode automatically shows up in your feed. So we can continue our conversation then. And until next week, my name is Lee Chaix McDonough reminding you to get out there and show the world what it means to be a Coach with Clarity.