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Should You Offer a Money Back Guarantee?
from:One of the questions many new Internet marketers ask is whether or not they should offer a money back guarantee. It is a question worth serious consideration because the answer could deeply impact your sales as well as your overall success. Put yourself in your customer’s shoes. You don’t know the person or company on the other end of the computer screen. Wouldn’t you feel more comfortable knowing you could get your money back if you weren’t satisfied?
Of course you would. Most people do and you will most likely see your sales reflect that fact. This would actually be a great basis on which to test your offers. Just run two identical offers; one with a money back guarantee and one without. Then notice the difference in your sales and you’ll know which way to tailor your future offers.
Guarantee Limitations
If you decide to implement a money back guarantee into your offers, you may choose to limit the time in which you will offer a full refund. Most such offers are limited to either 30, 60, or 90 days, although you will find some money back guarantees that are good for an entire year. This may be another point you will want to test to see which time span converts the best.
Refund Limitations
Some marketers offer a full refund with no questions asked while others will refund the purchase price if the product is defective. If you require a reason to issue a refund, be sure you are very clear in your wording or it could cause problems and you will have unsatisfied customers. By the same token if you offer a full refund with no questions asked, make sure you honor that and don’t make your customers feel uncomfortable.
Make it Easy
If you do offer a money back guarantee, make it easy for your customer to get his or her money back. If you make it too difficult, your run the risk of destroying the trust you have worked so hard to build up. The fact that your customer is requesting a refund may have nothing to do with you or your product so don’t complicate things by making them beg for it. Perhaps they have simply overextended themselves or perhaps your product isn’t quite what they thought it was. At any rate, keep their confidence by issuing their money back promptly.
Conditions
If there are any conditions attached to the refund process, be sure and state that up front. For example, if you charge for shipping and you have paid to ship the product, you probably don’t want to refund the shipping cost or you could end up losing money on the deal. Do state that at the outset, though, to avoid upsetting the customer who may not realize that the refund will be for the amount of the product only and not for the amount of the shipping. You might also state that the product must be in resale condition in order for it to be accepted for refund. Whatever your specific policies are, be sure and state them at the point of purchase.
Arbitrage Pricing Theory Specific links
Arbitrage Pricing Theory News
MIT and Harvard professors scoop Onassis prizes - Financial Times
MIT and Harvard professors scoop Onassis prizes Financial Times The finance prize has been awarded to Stephen Ross from MIT for his work on 'arbitrage pricing theory' and the 'theory of agency', both of which he invented, and for co-discovering 'risk neutral pricing' and of the 'binomial model' for pricing ... |
Onassis Prizes Honor World Leading Academics - The Maritime Executive
 The Maritime Executive | Onassis Prizes Honor World Leading Academics The Maritime Executive Professor Ross is best known for having invented 'arbitrage pricing theory' and the 'theory of agency'. He is also celebrated as the co-discoverer of 'risk neutral pricing' and of the 'binomial model' for pricing derivatives. |
Onassis Foundation announces 2012 prizes for trade, finance and shipping - New Statesman
Onassis Foundation announces 2012 prizes for trade, finance and shipping New Statesman Ross is best known for having invented arbitrage pricing theory and the theory of agency. He is also credited as the co-discoverer of risk-neutral pricing and of the binomial model for pricing derivatives. Three academics – Ernst Frankel, Richard Goss ... |
How investor sentiment causes stock mispricing - CBS News
How investor sentiment causes stock mispricing CBS News The argument against this belief is that any effects caused by sentiment should, in theory, be eliminated by rational traders seeking to exploit the profit opportunities created by mispricings. However, if there are limits to arbitrage, ... |
The Wacky World of Prices: Rental Cars, Hollywood, and HBO - The Atlantic
The Wacky World of Prices: Rental Cars, Hollywood, and HBO The Atlantic By Megan McArdle I study media markets and one of the interesting things about the entertainment industry is there's a lot of complex pricing. This includes both simple bundling (eg, basic cable) and two-part tariffs (eg, HBO). |