Stats/studies to prove that money-back guarantees work for info products

March 15, 2008 11:57 AM

Can you point me to studies/stats or bona fide case studies on the use of money-back guarantees with information products?

Many sites, articles and books say that a money-back guarantee will increase the sales of products. However, while it takes effort to return a set of Ginsu knives, it really takes no effort to delete an information product (e.g. ebook) and there's no real way to make sure that the customer actually did delete it. Obviously, you just have to trust the customer and refund the money. And you shouldn't be making a guarantee unless you trust in your product. But there is still the risk that people will find your product valuable and ask for the money back anyway, costing you at least the processing fee and some of your time. I am looking for real studies/stats that show that a money-back guarantee for information products increases sales enough to offset the risk of being scammed. Thanks.

(PS: If you have personal experience and can vouch for a guarantee, I'll consider that, too. I just don't want to be pointed to questionable ebook gurus. Thanks.)

posted by acoutu to work & money (4 comments total)

Just because this is unanswered, I will tip in one experience. I bought an information product like this, with a 100% money back guarantee. It asked me to sign a statuary declaration and mail it to them for the refund. Similar to getting a notarized statement in the USA. For the $20 ebook I bought this was way more trouble than it was worth, and I wasn't actually looking for a refund, I just noticed this in the electronic packing slip.
So I would suggest you could get all the sales benefit from a money back guarantee (whatever that may be) by making it a little bit of work to get a refund, similar to the mail in rebates that often accompany a lot of retail software sold in physical computer stores - lots of people just can't be bothered.
And frankly, if somebody went to the effort, you should graciously pay them, with a note saying you understand it was a hassle but you hope they accept the refund with no hard feelings, and ask if they can recommend any ways to make the product better.
posted by bystander at 4:33 AM on March 16

Thanks. I don't want to make it a huge hassle...just enough to keep people from scamming when they really do get value from the products. However, perhaps there are enough honest people that the increased sales would offset any scams. I suppose I could test this.

I would graciously thank people, no matter what. I know what a huge risk it seems for some people to order on the Internet and I would rather know that there's a problem with the product than to keep selling things without having any feedback.
posted by acoutu at 9:29 AM on March 16

Joel on Software has mentioned a few times how he thinks his money-back guarantees are good for business.
posted by grouse at 9:33 AM on March 16

I poked around some more and discovered that guarantees were invented for mail order catalogues in the 1800. I suppose they are worth trying.
posted by acoutu at 9:00 PM on March 16