To Refund Or Not To Refund – Beware The Black Hole

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Over the years I have heard of some pretty restrictive contracts. But recently I’ve spoken with a number of people who’ve come up against No Refund contracts.

Not just any No Refund contracts. One expensive event registration we know of offers a refund ONLY up to some time BEFORE the event begins. Once the event is underway, a refund is out of the question.

Perhaps the most egregious type of No Refund contract is a long term contract (six month, one year, two years) — most often for a coaching program to the tune of $10,000 , $15,000, $35,000, $50,000, $100,000 and even higher. And the contract is signed BEFORE the program begins, before you have any experience with the program or the coach’s style or approach.  And once you’ve signed the contract a refund  is out of the question – no matter the reason.

It’s the Law

Now, I must acknowledge that these types of No Refund contracts are legal. Should you be entering into a contract, especially a long-term coaching contract,  be absolutely certain that you read it thoroughly before you sign it, because the No Refund clause is often not made evident.

Oh, it’s there alright, but not obvious (at least in most cases). How many coaches, or most marketers for that matter,  would have the huevos to announce, up front, that as soon as you sign their contract your money is gone. Categorically, and without recourse, gone. NO REFUND.

No matter how they justify not making the No Refund announcement up front, they don’t because it’s a sales killer.

Black Hole

If you sign a No Refund contract, you are at the edge of a black hole, because, should you want your money back, and even for very legitimate reasons, you have no legal standing if the person who has your money refuses to refund it.

Now most merchants are ethical and honorable, and if your circumstance is reasonable, they will return your money. And it makes just good business sense to do so.

And some coaches offer their programs on a month-to-month basis. We are in a program like that right now and are getting tremendous value without  the desperate pressure of thinking — “I damn well better get everything I can, because my money is gone.”

This brings me to the point of this post.

What is the moral imperative with regard to a NO REFUND long term contract?

The fundamental point at issue here, no matter what good faith and actual value someone has to offer, is that there is no way of knowing whether that value will be effective for you if you don’t have a chance to test it and find out. If the No Refund policy is iron-clad, there’s no way to find out without the risk of losing your money with little or no value coming back.

The transaction places the entire risk in the hands of the buyer. The seller is free to behave in any way he or she wants to with impunity.

Immanuel Kant, a major philosopher of Western civilization, put it this way (this is my paraphrase, but the idea is close):  If the action you are about to take were to be elevated to the level of a behavioral principle for the whole of humanity to adopt, would you follow through with it?

Another way to ask the question is:  Would you want to be treated as you are about to treat others?

The evidence shows that there are those for whom this principle does not apply. Rather than some variation of the Golden Rule they opt for The Rule of Gold.

So beware when you’re presented with any kind of  contract. Most especially,  look first for the refund or return policy. And look in the small or fine print. That’s where you’re likely to find it.

And, of course, if you are satisfied, then go forward. But remember, enter into that No Refund contract as though your money is gone. Because, if down the road you cease being satisfied, there is no recourse. Your money is gone. Unquestionably and categorically GONE.

Judith and I understand that in certain cases, like offering downloadable products that cannot be returned, making the sale a No Refund transaction is reasonable –IF AND ONLY IF you make your No Refund clause completely visible during the buying process.

But in the case of buying without trying, or shifting the entire risk onto the buyer just because the seller “believes” he or she has a “so much value to offer” (which involves a degree of narcissistic grandiosity that, in itself, should be a warning sign)  NO REFUND contracts should be banned.

Because It’s All in the Connection,

Jim