Refunds and Customer Service

er290 I got an email asking about returns and refunds. A search revealed a nice post about returns from late 2006 (published the day after Christmas – I actually had good timing with a post). However, I have never covered refunds in too much detail.

A refunds is different than a return (which often entail an exchange). A refund can also be given for a service or for a defective product. What makes a refund a refund is that there is money be returned – often issued back to a credit card (or a charge being voided) and sometimes the money being given back as cash.

Refunds are more billing related than anything. Depending on the software used by the particular company, giving refunds can often be tricky and rather time consuming. I’ve seen systems that can issue a refund in 15 seconds and ones where it takes 15 minutes (plus a manager approval) to do the same thing.

There is often a lot of paperwork (that the company insists upon) to do a refund. Customers are sometimes forced to fill out forms and all of these annoying things. Don’t make your customers do this – just refund it to their credit card and maybe have them sign one receipt with everything on it.

When someone asks for a refund, you don’t want to go into an annoying retentions situation, but it’s fair to ask why the customer is asking for a refund. You have to word it like “Okay. I can definitely do this refund. May I ask why you’re requesting a refund, though? Is everything okay?” You have to be sure not to sound as if you are trying to hassle the customer.

Another issue with refunds (especially via credit cards) is customers are often unsure of how they will look on their bill. I advise representatives to briefly explain how it will look so there are no surprises (and calls to customer service) in two or three weeks when the bill comes in.

To make the refunds process as simple as possible:

  • Have a computer system that makes it easy (this is probably the most important thing).
  • Ask customers why they are requesting a refund (but don’t make it a big deal).
  • Explain any unique policies or procedures to customers (such as how a charge or refund will appear on their card).

Like with most things related to customer service, if you think the refund process through and keep the customer in mind, it’ll make sense.

2 Responses to “Refunds and Customer Service”

  1. Richard Rinyai said:

    Jan 23, 08 at 2:01 pm

    I agree with most of this article. The only part I would disagree on is the fact that if the paperwork for the refund is blank, the customer shouldn’t sign it, since the employee/manager could write what they would like on there. This would not be good for the customer.

    I would make sure I understand what I am signing first.


    Richard Rinyai

  2. Service Untitled said:

    Jan 23, 08 at 5:44 pm

    Well, if the paperwork is blank, no one should sign it. If there is no paperwork, though, that makes it easier.

    Thanks for your comment!