30 day money back guarantee hurting hosting biz?

[Talk2Me]

I'm just a customer but I have always been wondering:

Is the 30 day money back guarantee hurting a web hosting business? If a customer cancels within 30 days you basically lose money on it: the bandwidth he has used and the credit card transaction costs associated, etc. Is that a problem in general for the hosting business?

[HarborNetworks]

It can be. There are always people out there that will use your service for a specific need then cancel the account and open another one somewhere else. Yes you can loose money, but the question is do you want to offer it? You don't have to offer this money back guarantee, you could simply offer a refund to the user if they are unhappy with the service. Same concept, just not advertising to the world that you do it

[kk]

Unfortunately we did get people who abused our 30 day money-back guarantee, they would sign up, cancel on day 30 and find another host and use them for 30 days and so on...

So we reduced our guarantee to 14 days and this has eliminated this problem. 2 weeks is more than enough time for our customers to assess our service.

[northwind]

Well, the thing is, in your tos, you can state that refunds will be given for "acceptable" reasons.

And state them.

We have no problem issuing a refund, just as long as they give a valid reason. (eg. Just because isn't a valid reason.)

Also, you can include to discount the actual price they paid to cover the costs of bandwidth, storage they used.

[eHostSpace]

Basically, there will be some students out there who actually will pounce on such offers as they don't require much time for their projects.

Afterwhich, they can give you a load of reasons, which may sound logical. You are cheated again.

I will never offer a money back gurantee.

[HarborNetworks]

I don't blame you... It's a rough world and unfortunately there are always people that will abuse the system.

[kk]

Too true.

[eHostSpace]

There are always such sadistic living organisms in this world haha and if this happens to those people, they will just start cursing and swearing around, and never thought that they have actually done this before last time :lol:

[mediopia]

Well. You can always have a cover. That is how we do. We have a non-refundable setup fee attached to all our plans which give 30 day money back guarantee. So, although the recurrent fee gets refunded, the setup fee does not.

Besides, I think it is only fair to the customer to have such a guarantee. A web host should have atleast this much confidence in its service that a customer will stick by for more than a month.

Just my two cents.

[advantagecom]

Originally posted by mediopia@May 19 2003, 03:15 PM
Well. You can always have a cover. That is how we do. We have a non-refundable setup fee attached to all our plans which give 30 day money back guarantee. So, although the recurrent fee gets refunded, the setup fee does not.

Exactly....setup fees should be non refundable.

You can even go so far as saying customers only receive a refund if requested.