Refunds…or Extortion? Part 3 of 3

Should you refund money when your client complains? Whether to refund a client’s money or not needs careful consideration. It may not be a good move for your business.

Let’s begin by stating that when you advertise a product or a service and take money for it, you are absolutely morally, ethically and legally bound to deliver as promised. Bearing this in mind should naturally lead you to realize you should never promise what you can’t reasonably expect to be able to deliver. If you stick with promising only what you know, you should be well within your rights to demand payment for goods or services rendered. But what happens when things beyond your control crop up?

In Part 1 of this series, we discussed how to respond to legitimate complaints by “making things right.” In Part 2 of this series, we discussed how to handle those “fake” reviews that sometimes crop up. Here, we’ll discuss what should be done to prevent and handle a “money back” demand.

Managing Expectations

When you book a service with a client, at some point you should be doing a consultation where the client tells you what they want and you tell them what you can do for them. This is the point where communication is key. If you do a good job in this stage, their expectations should fall into alignment with what you can provide for them. Some services are more complex (for example permanent makeup procedures, as compared to trimming bangs) and therefore, more complex services require greater care in setting expectations. When a client comes to you with photo of the latest silver ombre color fade and wants her solid black hair to be done this way, it’s going to take some explanations of what her realistic results will be. If a client has noticeably different eyebrows, you must carefully explain and perhaps diagram what you can (or cannot) do to bring her brows into balance. You should NEVER promise “perfect”…no one can expect to achieve perfection. But you can be clear that you are only promising “better.” Keep your promises realistic so that you have firm ground to stand upon if the service is called into question at any point.

The Complaint

So you have set up realistic expectations, you have performed the service to the best of your ability and now it’s time to seek the client’s approval…what do you do? One savvy PMU artist videos “the reveal” where the clients are handed a mirror and their reaction is documented. Whether you video or not, you must be sure to ask “what do you think?” And further you should ask “Are you happy with [whatever]?” Make a point to make notes right in front of the client — write their exact words down. This may be important later!

They go on their way, and for whatever reason, they call or text you a short while later and demand their money back because “they don’t like them” or “because they are not right.”  Doesn’t matter what they are claiming, the bottom line is if you did the work as promised and the client expressed they were pleased, the only reason they are complaining is probably buyer’s remorse.

Buyer’s Remorse is Not a Refundable Event

Sometimes, a client is perfectly happy with your work. They are happy with their experience. And they are happy with the transaction between you. Enter the “Significant Influencer.” Their husband, who is concerned about the money, or the girlfriend whose jealously is thinly veiled by the “I’m your friend” cover or a parent or someone else who exerts influence over their decisions has made a comment. This comment (perhaps a casual, off-hand one, even) puts them into a spin and their immediate reaction is to demand the money back.

“I spent more than I should” or “my girl friend says” is not justification for the provider to forego being paid for their products, time and skill. If you have performed the service as promised. See now, why it’s important not to promise something you can’t provide? You have every right to keep the money.

Bullies and Cheats

There is a time-honored school of thought put forth by Nordstrom’s: “The client is always right.” This may have worked in the Golden Age of Civility before social media attacks were commonplace. Now, that mantra should be “The client is always right, except when they aren’t.” There is a class of consumers who are making a living going about their lives seeking products and services—for free! They have a mind set that anything they purchase can be refunded–even after fully enjoyed! You should not cave in to their threatening tactics. If you have done the work you promised and are confident you followed acceptable and safe protocols, there is no reason to refund.

There was a time when giving them their money back just so they’ll go away was  an acceptable strategy. However, the understanding was that they would drop their negative review idea.  In more recent days, owners and providers are giving the money back, but the bullies are leaving the negative reviews in place–so the gesture is for naught. The owner can’t really announce that they refunded the money because the readers seeing it will think 1) something really went wrong and they’re just not saying or 2) other bullies will think “hey! new sucker for me!” Refunding when you haven’t failed to perform is a bad move. There’s no upside…don’t refund unless you can make it work for you and your business.

Conditional Refunds

If it truly comes down to refunding money–whether you were “less than perfect” in your execution, or because it’s your brother-in-law’s boss, or whatever reason compels you to make a refund, you should take some steps that protect you and your business.  Promise the refund only if your conditions are met.

Offer refunds only on the condition that they remove all negative reviews by a certain deadline. Give them 48 hours at least, but the idea is to get the negativity off the internet as quickly as possible.

Insist the person comes in to pick up their refund in person. That’s the only way you handle it….period. One consideration might be that you will remove their lash extensions or their nail products when they come in as a condition of their refund. In order to receive a refund, they have to give up the goodies!

When they come in, you will have a photo copy of a company check or the cash showing the serial numbers and a receipt for them to sign. The receipt should actually serve two purposes–it is written acknowledgment of their receipt of the payment and you should add a short statement: 1. They must not discuss this refund with any person. 2. They must never use any negative or derogatory statements about you, your employees, your business. If they are found to be breaking this promise, you will pursue every possible remedy to protect your business and its reputation.

You should read the receipt statement aloud to them, and get them to verbally agree.  Unfortunately this matter may not actually be over at this point; but fortunately, for you, this person will not likely realize the ramifications of  defamation of character and won’t understand that you’ve just documented your case, thoroughly. If you are agreeing to refund their money, they must meet your conditions. Never just give up and let them strong arm you.

Pro tip: this is an excellent opportunity to try out the new nanny cam (after posting a sign declaring “These premises are video taped for security” near the area where you are dealing with this matter, of course.)

Turn it Around

If you are concerned about reviews of your business, then you should actively seek reviews from your clients who love you. Ask them to share a word about their “favorite” thing you do for them. One innovative spa owner created a social media campaign where she solicited good Yelp reviews in exchange for a gift basket drawing. Make sure you have a “testimonials” section on your website and ask every client you see for an entire month to take a minute to write you a good note. You might even have a tablet, all logged in for them to do so in the waiting room!

Reviews Don’t Have to be Scary

In summary, you can create a positive impression of your business by the way you respond to every review that has a negative comment. It’s not that you never mess up (that’s not believable!) It’s how you respond when someone accuses you of it. Make that your testimony for your own business.