Transcribed article based on the video above.
So I’m a very big fan of the 100% money-back guarantee both as a consumer and a business owner.
The main value of the 100% money-back guarantee is it gives the consumer a lot of confidence and trust that they’re going to buy that product. So if among lots of different options and limited time, if I know as a consumer there is a 100% money-back guarantee, there is a much greater likelihood that I’m going to buy that product.
But what is also really interesting to note as business owners, is we feel that if we offer that we are going to lose lots of money and that is typically not the case. For companies that offer 100% money-back guarantees, many of them see a return rate of less than 1%. Now the opposite side of that is that if you offer the 100% money-back guarantee, it’s going to force you to make sure that you have a great product or service because if you don’t, then you will see really high returns and people taking advantage of that guarantee. So, it’s going to force you to make sure that you have a product or service that a lot of people want.
And one of the most important things to note is a lot of times I think we feel that if we offer this guarantee, people will take advantage of us and cheat us for it, but I haven’t found that to be the case. I think most customers, in fact the vast majority, 95% plus, if they get a product or service online, physical, or at a store, that they are really happy with, they aren’t going to ask for that guarantee.
Jason Nazar is the co-founder and CEO of Docstoc. He’s a frequent author and speaker on small businesses topics. You can read more of his posts here on Docstoc and at his blogJasonnazar.com.