(Still practising my headlines - got your attention?)

Not content with stirring everyone into a seething frenzy in the logging thread, here's another huge bombshell.

Let's say I want to totally eliminate my money back guarantee. Not just hide it from the site, but actually mean - "You've got the game, you know it works because it had to run for you to register it, you had the chance to evaluate it, and you've played it good and proper: now we've got your money in return and you've broken the shrinkwrap."

The reasoning goes... imagine you've test driven that new car. It's great, the salesman greases his pen and it's yours. The moment you put a key in a car and start the engine, it's secondhand, and you lose a third of its value (unless you bought a BMW... damn!) No-one's going to give you your money back when you come back a week later and say after all it's not fast enough. You're entitled to a refund or replacement or repair at the vendor's discretion only after actual defects are discovered (ie. not meeting the sold specification or not performing as can be "reasonably expected"). You know this when you buy a car, but it doesn't stop you buying one.

We have anecdotal evidence from one or two sources that a money-back guarantee increases sales.

Now consider that you found some way of selling 100x as many copies of something, and this somehow gets money up front out of consumers. (I'm hoping, for example, that by a combination of a) ingame purchase b) ultra low price and c) attract mode only demos that I will be able to achieve a high sales rate). It's likely that your return rate will probably soar too as people have their hour of fun and then decide that it wasn't worth $10. But as a business you might not be trying to let people decide how much they want to pay for their fun: imagine a restaurant where you filled in your own bill at the end. Out of business in a very short time! As a business, you put a price on your fun, and if $10 is the price of an hour's fun with your game, that's what you want - and no less.

At the end of the day - what sort of customer is really going to be unhappy without recourse to a refund if they decide later that they'd rather just have their money back? How does the amount involved affect perceptions? If it's $10 would you bother? $20? $30?

Discuss.

Cas :)
ps. this is hypothetical. If you'd like to get all personal with me about it... well, don't, it'll spoil the debate.

Wouldn't it be a better deal for everyone to make a game that no one wants to return? You make more money and keep happy customers.

If your return rate is high, you need to figure out why, rather than screwing over the customers.

I mean "you" generically, not Princec-ifically.

You need to use the impersonal pronoun then :)

What got me thinking about this is the Letter of Destruction thread. The whole reason for the letter of destruction existing is in every way just as sneaky, nasty and underhand as hiding stats log agreements in the "EULA that nobody ever reads" - if you want to look at it that way. The LOD's purpose is clear: it has nothing whatsoever to do with consumer satisfaction or peace of mind. It's very unlikely to even be legally binding, or enforceable in those places where it might be binding, for any number of obvious reasons. What it does is very simple: it presents the user, already pissed off at wasting time and money, further barriers to getting their money back. By presenting a bunch of shitty beaurocracy to the user you're effectively saying, "Yes, you can have your money back. But first I want you do a whole bunch of pointless and meaningless things for me, just because I say so."

And we know it works.

What if your game had a big red button in it saying "Refund me! This game is shit!" What do you think your return rate would be like? If you're really honest you'd say, probably a lot higher, because it's so easy to get refunded. Which means conversely... that the LOD is about making it hard - even unpleasant - for the customer to get their money back.

If we're deliberately trying to make it hard, why not be absolutely honest about it and take it to its natural conclusion: NO, you can't have your money back. We don't want to give it back to you. You've had your game experience. Give the game to a friend if you don't like it. Whatever.

Cas :)

There's an old expression when it comes to sales: "You can fleece a sheep many times, but you can only make mutton chops out of it once."

It depends on what you are trying to do. If you are focused completely on one title, get everything you can get out of it and getting out of dodge and moving onto a different line of work... sure. Why not? Do what you can to get all the money you can right now, and forget about tomorrow.

If you are instead trying to build a sustainable business, and you don't want to have to go through the pain and agony of trying to get sales going from nothing every single time, your greatest asset is REPEAT CUSTOMERS. You want a reputation for being a business people like & trust... not just your games, but also your customer service, tech support, and people feeling comfortable dealing with you. You want to win the popularity contests.

So - that means doing everything within reason to build up a base of customers that like you. If they feel that you are giving them a "hard sale" every time they visit you, they are going to quit wanting to visit. If on the other hand they have this perception that they are getting the better part of the deal every time they visit you, and you are working hard to address their needs, they'll be anxious to send more business your way.

And while I've never gotten a money-back guarantee on a car, software's not an automobile. And I've gotten money-back guarantees on many other things. And I've taken merchants up on it many times. I've only once had a merchant give me a tough time about a return... and guess what? I quit going there. In a couple cases I came in gearing up for a possible argument... and the staff were friendly, courteous, CASUAL, and quick to take care of me. Guess where I still take my business?

Yep, my thoughts too. Make a game that folks love and want to tell everyone about, not a game they regret ever buying.

The idea of a guarantee has a lot less to do with folks actually returning the game and a lot more to do with how people feel about wanting to fork out their hard earned money

If your game is that likely to get returns, then there is something that should be fixed in the game.

Don't you want them to buy more games from you? Well if I bought a game from you and I thought it wasn't very fun and I felt ripped off, I'm not very likely to purchase from you again.

So there is two things that SEEM related but kinda not.

1) a disgruntled customer.
2) a concerned customer who wants to buy but is worried.

If you tell folks that " hey if you don't like it tough" then you are really stabbing the 2) customer who really WANTS to give you money.

2nd the do you really want a disgruntled customer spreading ill will of how you ripped them off?

3rd, if you are using credit cards, you are giving a 60 day money back anyway. so you just lose more in the long run because they are gonna get their money if they want it back anyway, AND you don't get the benefit of encouraging the folks that WANT to buy but are on the fence.

It's a lose-lose deal.

lastly, don't be confused that your product is your game. Thats just one piece of the puzzle. there is customer service, feeling good about a purchase, etc etc

Seems valid at first but I see a lot of assumptions about the customer based on a personal experience.

Let's try it from a different analogy.

When was the last time you went to the cinema and decided the film sucked and you wanted your money back? Did you ask for it? Did you get it? Have you been back to the cinema since? Games software is very much like cinema entertainment; you're trading money for a finite amount of entertainment.

What about a DVD rental? Did you rent a horror movie recently, decide it wasn't worth the $5 (yes, that's how much they cost to rent here for the night!!) and demand your money back? If not, why not? Did you decide that it's not worth it over $5? Has it turned you off going back to the video rental store and trying another video next weekend?

What I'm getting at here is - where lies the difference, can it be quantified or qualified or measured in some way, and acted upon?

Cas :)

From my perspective, if I watch a film at the movies, I’m paying for the privilege of watching it on their big screens, and with their surround sound. I'm not paying for the movie itself; in essence I’m paying for a service. I don’t leave the theater with the movie in hand, so I haven’t purchased any goods. If the movie stinks, tough luck, I was paying to watch it on a big screen with nice sound.

If I rent a film from the video store, I am in essence paying for the right to view that film for a period of time. If I viewed it and I didn't like it, too bad, I paid them for the right to view it. If I take the film back to the store and say it wouldn't run in my DVD player, they will instantly let me pick a new film or get another copy of the same one.

However If I go to Wal-Mart and pick up a copy of a film, then I am paying for the film itself. I don’t know how it is in the UK but in the US, these stores have very liberal return policies. They will take just about anything back to keep their customers happy. I was in Costco the other day and saw a woman returning an uncooked pizza she had bought because "her family couldn't eat it". They took it back no questions asked.

Go ahead and make you're return policy a "no refunds" policy. You'll be eating your profits with chargeback fees, assuming people trust you enough to buy from you in the first place.

The most basic reason to offer a money-back guarantee is that it will generally increase sales more than you'll give up in returns. However, if you end up getting a lot of returns (more than say... 2%), that's a signal that there's something wrong with the product.

Usually when a customer requests a refund from us, they do it within the first week after their purchase, even though our guarantee extends for 60 days. And usually they tell us up front why they're asking for a refund. One common reason for returns is that the game is too hard. Frequently parents and grandparents will buy a logic game such as Aargon (which is intensely cerebral) for their kids or grandkids, and then they find that the kids can't solve a single level and can't really enjoy the game. About 50% of our returns are because a game is too hard for the intended customer. But overall returns are still at a very nominal level (in the single digits each month).

How do you know if a money-back guarantee will improve your sales? Of course, there's only one way to really know. And that's to test it (ideally with an A-B split test).

We've been offering our guarantee for about four years now.

LOL! Only in America eh?
Here in the UK, they're a lot less forgiving of customers. Especially the trend in software - you open the box, therefore it's yours. If you make a scene in the shop you're likely to get your money back but probably not if the packaging is in any way damaged. This is supposedly an anti-piracy measure. After all, it wouldn't take long for me to figure out I can go into HMV and buy all the records I wanted, rip & burn, and then take them back for a refund. And in the UK, that's exactly what many people would do if they were allowed.

Now, I'm suggesting that if you paid $20 for your DVD rental or cinema ticket you would be pissed off if it was shite. Of course the shrewd cinemagoer reads the reviews, sees the trailers and listens to the advice of friends before laying down some cash: but there comes a financial point where you feel cheated.

I'm suggesting that if you paid $20 for a game that turned out to be crap after all you'd be annoyed, even if you saw or played the demo and it looked good. Imagine for example that you played it but discovered that you finished the whole game in an hour. But - what if that game was merely $10? Or $5? Would you be so inclined to bother complaining about it at all?

My theory is that there is a psychological point at which a sum of money is underneath the threshold at which people feel cheated enough to bother with a refund, or even cheated at all. If it's only a fiver, what were you expecting? You've maybe got a couple of hours' fun out of it - a bargain by most people's standards.

See what I'm getting at?

Cas :)

As usual, I think you've got it right Dan. I go to a theater for the experience. I've had times where I didn't get quite the experience I paid for. In those cases, I didn't even have to try to get any type of compensation. When it's was a minor glitch, they've already had an employee waiting at the door handing everyone a coupon for a free drink. The one time I had a REALLY bad experience, again they already had a person at the door saying "were sorry, here's a free pass". So I expect something from the theater and I either get it, or they are glad to compensate me (and I'm convinced that had I gone to a manager and said "I don't want a free coke, I wan't a refund", they would have given it to me).

However, there is also another side of the movie experience. I go to see a good movie. If I think the movie sucked, I don't expect the theater to compensate me (they did their job properly...there is only so much you can do to make a piece of crap enjoyable). I expect the movie studio to do that. However they don't. My response....I'm a lot less likely to see a movie unless I'm pretty sure it's good. There have been a lot of movies that I've been borderline on seeing. I wasn't sure, so I waited for it to get to cable. When it did, I actually like the movie quite a bit. Had I known I could have gotten some satisfaction from the studios, I would probably have taken the risk to see it in the theater.

Back to the game business directly, if a customer tries your demo, buys the game, then wants a refund, either one of 2 things happened.
1) That person is a crook and just wants a free game. Chances are they would have no problem issueing a chargeback against you. That's going to cost you money (and if you get enough of them, it could cost you your merchant account). Fighting a chargeback is so expensive that even if you win (which is unlikely since you don't have a signature), it will cost you more to initiate the investigation that you stand to recover. So either way, they crook has screwed you over...cut your losses and take the least expensive way out...issue the refund.

2) The person thought they would enjoy the game but they were mistaken. This probably means your demo was not representative of the full game. Maybe your wording of the extra features was unclear. Whatever it is, somehow the two of you didn't connect on the game. At this point, there probably isn't the slightest bit of ill will. However, if you say "sorry, not my problem" there will be.

Regarding the letter of destruction, I don't see it as a way to hassle the customer. If a customer was irate and scolded me for hassling them with the LOD, and I saw no way to resolve it, I'd skip the LOD and just issue the refund and wash my hands of them. I more see the LOD as a means to:
1) Make sure the customer understands exactly what the refund means to them. It's not just a "yada yada yada...click the button" thing. It's a "if I'm gonna sign this, I better make sure I understand it" situation.
2) To hassle the cowardly theif...the one who has no qualms about anonymously stealing your game but gets frightened when you want them to put their signature on the line because they think that might be the first step to going to jail

Originally posted by Dan MacDonald
I was in Costco the other day and saw a woman returning an uncooked pizza she had bought because "her family couldn't eat it". They took it back no questions asked. That reminds me, a few years back, I was at the grocery store the day after Thanksgiving. A lady walks in with a turkey carcass completely bare of any sign of meat. I laughed when I saw her walk by me. She walked up to the customer service counter, said the turkey was bad, and they issued a refund without asking her a single question.

This highlights a huge gulf in the retail/custom habits of Americans and the rest of the world.

Cas :)

Originally posted by princec
This highlights a huge gulf in the retail/custom habits of Americans and the rest of the world.


Probably true. And since this is the market that's resposible for half of our sales, I think it makes good business sense to go the extra mile to meet or exceed its expectations.

"Caveat Emptor" just doesn't go over too well where I live (Los Angeles). If I go see a movie and don't like it, I can tell the theater manager, and he'll give me a free pass. If I eat a meal at a restaurant and it's not quite right, again I can tell the manager, and he'll probably tear up the check or give me some free gift certificates. If I rent a movie at the local video store and tell the clerk it wasn't very good, I get a free rental. If I buy a book at the local bookstore and take it back to the store a year later saying that it wasn't very good, they'll give me a credit slip for the full amount, even if I don't have a receipt. All of the above have happened to me. As a result I've come to expect this kind of treatment. Now when I receive a lower level of service, I feel something's not right. These service leaders have spoiled my palate for substandard service. (How absolutely insidious of them!)

Sure, all these generous businesses can be abused. But the small percentage of abusers are nothing compared to the hordes of satisfied customers who will buy again and again. Providing really good customer service is hard, so it becomes a competitive advantage for those who can manage to provide it.

I rather like that many retail software stores have an "all sales final for opened software" policy. That allows me to fill a need they can't -- reducing the customer's perceived risk. It's less risky to buy a game from Dexterity; you can do the purchase and the return (if needed) all without leaving your home. Customers that experience this level of service from us are consequently having their palates spoiled as well, such that they begin to feel something isn't quite right when a company won't back up their software with an unconditional guarantee.

Actually, the US retail experience seems to pretty much mirror the New Zealand retail experience. Maybe it's just in the UK that retailers hate their customers?

Well to be honest I agree with the original post. I don't offer a money-back guarantee of my games, I DO price them reasonably, and I do offer free demos of all my games. If someone tries the demo and doesnt like it, then thats fine, if they play the demo, like it, and then pay the $10-$20 for the full version, then I think its pretty clear what they are getting.

As the games I do are slightly more hardcore-gamer than dexteritys, I dont think I have the same customer base. Most people who play dweep are probably a bit older, more mature, and less likely to scam the company. On the other hand, do you think there will be a money-back guarantee on Half-Life 2 or Doom 3? If there was, most of the kids who buy it would finish it in a week then ask for their cash back.

I try very hard to make games people are glad they bought, and had hardly any complaints in the 4 years I've been running. In those cases where people are dissapointed with the full game, I've tended to give them free copies of other games as a sign of goodwill, rather than refund them.

If you want to try "No Money Back" (although I'm surprised if you're actually getting enough refund requests that this is a problem!) I'd suggest just upping the bar for getting a refund. Don't say anything about money-back on the site. Make them have to hunt around your site a bit to find an appropriate way to contact you. Then make them explain WHY they don't want the game anymore and why they paid for it after seeing the demo. (The shy will shut up at that point.) If they've gone through all that, give them the refund already.

At least one of my credit cards wanted proof I had attempted to resolve the issue with the merchant before processing a chargeback for an online purchase. If they've gone to the trouble of tracking you down and asking and you blow them off, even the shy will feel morally justified in holding you to the coals. :)

But if the price is low and you're not advertising "Money Back Guarantee" anywhere it'll be a pretty rare person who makes the effort, I think. Most people don't issue chargebacks unless they're personally pissed off. Especially, as you said, at a $10 price point I think most people would just shrug and eat the cost.

There is only one way to decide whether or not to offer this kind of guarantee. That test is this. Do I make more money with it or without it?

I offer 30 days. I have very very few refunds. Almost none. Offering a money back guarantee is a way to kill one reason an impulse buyer will put up for not purchasing. Its a good psychological safety factor for the consumer and has been shown in many experiments to work. Your own experiment is the definitive one though since everyone's customer base varies.

Lastly I'll say that if a product has many returns then your business is doomed to failure. IMHO A business that is based on getting a sale and then keeping the money from a dissatisfied customer won't have any repeat business and I believe that's the foundation to growing a company.

Reading this thread reminded me of the screensaver, SereneScene. This is one of the most popular (if not the most popular) screensavers in the world. It has a demo that you download and test, and a buy button that takes you to their website.

But upon hitting the order page, the first thing that greets you in big bold red text is a message saying:

All sales are final!! We absolutely do not refund any orders!!

Would sales be higher if they did decide to offer a refund? Who knows. Only they could tell by testing it. But the point is, the lack of a refund policy (and a huge in-your-face warning!) has not been a barrier to sales.

Yes, in the UK things are very, very different when it comes to buying stuff and getting free stuff. The general attitude is "sod off", and if you're lucky, "take your money, and sod off".

I notice Cliff is a UK-based indie.

There's a stark difference between shouting "Give us your filthy cash, you'll never see it again!" and simply not having a money-back guarantee on the site. Try the "Refund me!" button in your game.

I'm afraid I'm not really in a position to test it unfortunately because I only make about 10 sales a month and don't have any returns*.

Cas :)

* To date I've only had 1 return and that was an accident. As I say, this is all hypothetical, and largely irrelevant unless some way can be found of getting the money out of customers up front instead of after 99% of them have wandered off to find another game to play.

I agree on the testing part. Mistaril sells about 5-10% more because of the refund, when counting in the costs with a refund. But you have to test it yourself.

I use the LOD to scoop up information about why people decide to get a refund. It has been invaluable in this respect.

Originally posted by princec
I'm afraid I'm not really in a position to test it unfortunately because I only make about 10 sales a month and don't have any returns*.
I guess I'm confused by the whole point of this thread and your desire to eliminate something that hasn't been a problem for you. If it isn't broken, don't fix it. Worry about identifying and fixing those things that HAVE been a problem for your business.

princec: I take it you've never bought anything from Game, the UK's largest games retailer, where they offer a 14-day no questions asked refunds policy?

And that is a policy which is pretty much mirrored across all shops, games retailers or otherwise. Nearly all clothes shops I've ever been to, offer no-quibble refunds/exchanges.

So basically I'm not sure there is such a big gulf between the USA and the rest of the world.

Originally posted by simonh
princec: I take it you've never bought anything from Game, the UK's largest games retailer, where they offer a 14-day no questions asked refunds policy?

And that is a policy which is pretty much mirrored across all shops, games retailers or otherwise. Nearly all clothes shops I've ever been to, offer no-quibble refunds/exchanges.

So basically I'm not sure there is such a big gulf between the USA and the rest of the world.

Some GAME shops don't offer this (for the PC) and have refused to refund Unreal Tournament 2003 when it first came out.

I too was under the impression that Game offer 14 day returns.

I thought the biggest difference regarding this type of stuff between the UK and the USA was that in the UK people are less likely to complain than people from the USA.

scott

I worked at EB (now GAME) for a couple of years (95-97) and I can confirm that there was a 10-day return policy put in place by the American management (John Steinbecker I think).

The store I worked in even refunded an expensive piece of translation software (~£200) that a customer had bought from PCWorld. It hadn't worked well when he tried it, but when he took it back to PCWorld they refused a refund because he had opened the packaging.

In their defence, Dixons (PCWorld's parent company) had just paid a £20,000 fine because they refunded someone who brought back some s/w on floppies, but then sold them again as new. The next buyer found the last guys stuff on them and complained to trading standards who then hammered Dixons.

I've always wondered how GAME get away with it. Refunded games were always re-sold as new when i was there. I even had a customer complain to me once that the gameboy game i sold them had the previous guys saves on it. Despite the 10-day no quibble guarantee the previous buyer had lied as to why they were bringing it back and told me it was a duplicate gift. Customers are weird!

SC

LordK, this has nothing to do with me, this is a hypothetical debate designed to get you all thinking about things instead of accepting gospel.

Cas :)

Originally posted by princec
LordK, this has nothing to do with me Oh, I'm sorry. I guess I was confused by the phrase "I want to totally eliminate my money back guarantee". I see now that I totally missed your little disclaimer line at the bottom of your original post.

Originally posted by princec
this is a hypothetical debate designed to get you all thinking about things instead of accepting gospel. A hypothetical debate is often no better than gospel. This is particularly relevant, since the argument in this case involves speculation about people's behavior rather than deduction from true premises. Dexterity's A-B method of testing the effectiveness of money-back guarantees is worth a lot more than a hypothetical debate, and it certainly isn't gospel.

I think you've missed the point somewhere...

Cas :)

Originally posted by princec
I think you've missed the point somewhere...

Cas :) Have I? Please elaborate.

By the way, the smiley in your signature has assumed a rather ironic character of late, don't yout think?

Oh no it hasn't!
The point was simply discussion as an end in itself; the thread was purely philosophy. Nothing more, nothing less. I seem to be rubbing a lot of people up the wrong way, perhaps?

Cas :)