If you’re a commercial plugin developer, one of the things you’re bound to come across sooner or later is a refund request.
You’d do well to decide from the onset what your policy on refunds is going to be. In this post I will take a look at the 3 most popular policies that I have come across, and my thoughts on each.
No Refunds
The thinking behind this policy is that we are selling digital products, and it’s hard to assimilate the concept of returning physical products with digital products. If I sell you a plugin, you cannot really return it to me. What I can do is revoke the license, essentially meaning that you wouldn’t have access to any more support and updates for the plugin. You might think that this is a very stiff policy, but you’ll be surprised at the number of vendors who have this kind of refund policy in place, among them giants like iThemes and CodeCanyon.
My opinion is that this policy is too strict and doesn’t promote a healthy and friendly relationship between developers and prospective clients. Even with such a policy in place, you would still get people asking for refunds. Most people never read the refund policy before buying a plugin (which in itself is bad, but that’s how things are) and will therefore tend to end up disenchanted when you point out the fact that you don’t offer any refunds at all. Worse still, they might even go out of their way to bad mouth you and encourage others to boycott your plugin/s.
Unconditional Refunds
On the opposite end of the spectrum we find unconditional refunds. Here we’re basically saying that we are 100% convinced about the value of our products, and if for any reason you don’t like the plugin, you can have a refund.
The most common fear associated with this kind of policy is that people can take advantage easily by downloading the plugin, then asking for a refund, essentially having the plugin for free. This policy seems to be more common in the theme niche rather than with plugin vendors, with WooThemes and StudioPress being prime examples of shops having this refund policy in place.
I think having an unconditional refund policy makes a lot of sense for theme vendors, as it’s not that easy to know how a theme will work for your particular site. Even if the theme vendor offers a demo (which they should) the big thing you’d want to test is how the theme fits around your existing content. You can only test that after having downloaded the theme.
Moreover, with the incredible amount of competition in the themes niche, having a 100% unconditional money back guarantee can help a theme vendor rise above the rest and actually lead to more sales. Therefore, if I were to sell themes I would probably go for this refund policy.
Conditional Refunds
The third popular refund policy is that of conditional refunds. For selling plugins I like this one best. What we’re saying here is that we offer refunds only if the plugin does not fulfill its promise or has some bugs which the developer cannot fix in a timely manner. The customer is responsible for reading the plugin’s description carefully before purchasing and we expect him to know what functionality the plugin is promising to provide.
Every piece of software out there has bugs, and if I purchase a plugin and encounter said bug/s, the natural thing to do is to contact the developer and notify them about the situation. What I would expect is that they test things on their end, and if they verify that there is indeed a bug fix it promptly. In most cases, such issues can be resolved within a couple of days. The developer is happy as he has improved the product, and the customer is happy as he can now work with the plugin without any problems. No need for a refund.
Giving refunds is a time consuming process for a developer. He has to issue the refund from PayPal or other payment processing system he has in place. He also has to make sure that his e-commerce system marks those payments as refunded. Most of all however, there is usually some time spent in communication with the client, and this time has to be written off if a refund is given. All these things add up.
Plugins are usually quite easy to set up demos for since they don’t normally depend so much on the site’s content. As a plugin developer, you should make sure that you keep the plugin’s description updated, include screenshots and even video walkthroughs and tutorials and a complete documentation section. A live demo is also essential for most plugins. Having those things in place will enable a prospective client to be well informed before taking the decision to purchase.
Therefore this license is the one that makes most sense in my opinion, and respects both the developer and the client. Some major plugins that follow this way of thinking are Easy Digital Downloads, WP RSS Aggregator, SearchWP and Soliloquy.
Conclusion
If you follow my recommendation and go for conditional refunds, it’s important to keep in mind that some degree of flexibility from both ends is essential for a happy relationship. It’s not the first time that I’ve granted a refund to a beginner who bought an add-on by mistake because he genuinely misunderstood something. Each refund request should be dealt with on a case-by-case basis.
Hopefully you won’t have that many refund requests so this will be far from an overwhelming exercise.
What are your thoughts on refund policies? If you are a plugin seller, let us know what your experiences were, and if you are a user, we also want to hear on your thoughts on which refund policy you find to be the most fair and which one most encourages you to buy.
