How To Reduce Refunds and Returns

How To Reduce Refunds and Returns

We are entrepreneurs competing in a very competitive marketplace. There is almost a 100% chance that what we have to offer, our service, our product, is not at all unique, and this creates a dilemma for our prospective buyers. Which do they choose, yours our a competing offer? And this act of choosing causes stress in our buyers psyche.

Eventually, and with a little help from your evil marketing skills, the buyer chooses your product or service. Unfortunately the stress doesn’t actually end there, because the buyer will enter into a period of post-purchase rationalisation. This period of time will vary depending on the relative cost of the purchase – the lower the cost to the buyer, the shorter the period of rationalisation. Conversely, the higher the relative cost, the longer the period of rationalisation will be.

During this rationalisation period the buyer experiences a mental discomfort driven by two factors: the relative cost to them (I.e. the cost of the item relative to their weekly, monthly, annual income), and a feeling of guilt because they did not choose a competing product or service.

You will know this feeling very well:

Did I really need this?

Did I make the right choice?

Have I been fooled into buying this?

This self-questioning, this ‘Buyers Remorse’ is amplified by our one-click checkout world in which we live, and it’s during this period rationalisation that your buyer is most likely to return the product or request a refund.

So as a vendor, how do you minimise the risk of a return/refund during this period of post purchase rationalisation?

Thankfully there is an in-built human characteristic that drives us to try to self-justify our actions and choices in life. 

Cognitive Dissonance is a reaction to mental discomfort that causes us to alter our belief, attitude or behaviour in order to reduce our discomfort. In short, we always try to self-justify our actions. People are biased towards seeing their decision as correct.

We need to help our buyer to satisfy their need to self-justify their actions, and we do this by giving them a great experience.  

If you have ever bought a product from Apple, you will know that when you receive your iPhone, Laptop, Tablet, there is a thrill to unboxing and then unwrapping your item. Beautifully packaged, beautifully presented. The item you purchased may be devilishly overpriced for what it is, and compared to equally functional competing products, but what you purchased was an experience, a status.

Want to see an example? Take a look at the American Felling Axe on BestMade.com. https://www.bestmadeco.com/products/american-felling-axe

The price – $248 to $368 – for an Axe!!

Now look at this one – http://www.hatchetsandaxes.com/condor-michigan-felling-axe

This is also a felling axe using American Hickory, and it has a lifetime guarantee. The price? $51.99

So how does Best Made Co use cognitive dissonance to reduce buyers remorse? Yep, they turn the buying into an experience and provide lots of reasons for the buyer to justify their purchase.

It’s not just any old axe you are purchasing because it has “an iconic American axe head design”, and you know this because they tell you “Every axe is emblazoned with our trademark logo on the handle, and a removable American Felling Axe sticker on the head.”

Further, the product listing shows multiple beautiful photographs of the axe. There is a quality video showing you the packaged axe. And when you receive it, it comes in a beautifully crate and you even get a manual with it!

HOW TO USE THIS:

So to reduce returns and refunds

Remind buyers why they made the right choice – after they have purchased. Send them an email highlighting the great decision they made and how great your product is. 


If you are sending a physical product, make sure it is beautifully packaged.

Add low-cost items to your product or service to help confirm that they made the right choice. For example, an unannounced free gift of some sort.

Further reading should you feel the urge!…..

Post-purchase rationalization … https://en.wikipedia.org/wiki/Choice-supportive_bias

Cognitive dissonance … McLeod, S. A. (2018, Feb 05). Cognitive dissonance. Simply Psychology. https://www.simplypsychology.org/cognitive-dissonance.html

How to Avoid Buyers Remorse … https://thehustle.co/how-to-avoid-buyers-remorse

The Experience Economy …  https://en.wikipedia.org/wiki/The_Experience_Economy

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Andy Wood

Andy Wood

My mission is to guide and empower you with the tools, resources, strategies, and tactics to help you succeed in your online business, and (of course) EXPLODE your income so you can live life on your own terms.

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