Should I offer refunds?
I am the founder of www.CuratedFunding.com an online library that helps Creators and Founders discover hard to find Grants, Awards and Funding initiatives. I have recently set up a 7 day free trial which has brought in over 25 new customers in a month. I made it clear when you sign up that you can cancel anytime in the first 7 days or you will be charged.
However, now I have 3 separate customers asking for Refunds after their Free Trial. Should I offer refunds to these customers? What would you do?
Generally I give out refunds whenever customers ask for it. It sounds like your 7 day free trial requires a credit card, and the card is charged on the 8th day. With this pattern I think a lot of people will forget to cancel.
Keep the customer happy, and start talking to them about whatever they're up to. I think your customer conversations will be worth more than the money you lose in refunds.
Another thing to consider, if you don't process their refund the customer may request a charge back which is effectively a refund - $50
most free trials require you to input a credit card right?
Seems to be a trend yes
I would offer a refund in this scenario.
People forget to cancel trials all the time and it is very common for companies to refund folks in this scenario.
Hanging on to their money when they didn't want to pay for the product will:
Good advice. What percentage of charge backs could potentially get you booted?
"Dispute activity above 0.75% is generally considered excessive, although this varies by card network"
IME in B2B SaaS, anything above 0.1% is probably a sign of a problem that needs fixing, I can't imagine having a product anywhere near 1% for any length of time.
I always refund.
It’s just not worth the trouble and mind space to fight over it or have to handle a credit card dispute.
Note that with 25 customers, 3 could just be an outlier, so refund and see what happens next month, if the percentage stays this high, start working on a fix.
Offer the refund but ask why. You might learn more about your customers.
Are they requesting a refund because they forgot to cancel?
How long after the trial?
Did the product meet their expectations?
Did they just grab the list of grants/awards/funds and run to use it for personal use, offline later?
Those are all questions you could look into.
Always always always offer a refund for customers who aren’t going to actually get any value. Doing so means you cement a reputation as being someone who prioritizes providing value. Not doing so will quickly brand you as just greedy.
As others said, refund - not worth the headache. Especially if it is within a week of the trial ending. Also, they aren't going to be a long term customer, so not worth creating a bad rep over one month payment.
Do you have a self-serve cancel mechanism? That usually lowers the incidents of asking for a refund since the user can cancel themselves and are shown when their subscription ends.