Every month I have several sales meetings with potential clients. Some work out, some don’t. It is the way business works. But something happened recently that made me rethink my policy and part of my contact. I met with a potential client who had a fairly large eCommerce website. They wanted to get off of their old system and onto a new up-to-date system. Pretty straight forward but would cost more than a few thousand dollars. After a 2.5 hour meeting, 2 follow up phone calls, another 45 minute meeting, they sent me a deposit out of the blue. I sent them a final estimate and my contract. The price was the same but I had added in a few things. I let them know if they had any questions to let me know, if not I would be by in two days to pick up the contract and information that I needed to get started. Two days later I had a signed contract in hand. I started working on the new site a few days later.
The following Monday called them to setup a meeting to look at the site mock up but they cut me off. They wanted their deposit back. They cited the cost was just too much. After a bit of back and forth they agreed to 1/2 their deposit back since I had already started work on the site.
It is rare that I get some one to commit then back out. It got me thinking about deposits and refunds. For most any service work a deposit should be collected before works begins. There are a few exceptions to the rule but in general, get a deposit up front. Depending on the size of the job I collect any where between 10% and 25%, which is usually enough money to get someone to commit. But what about refunding a deposit?
In doing some research I found pretty much three scenarios. 1. No mention of refund at all. (this was the majority) 2. Companies who offered a full refund if work hasn’t started (rare). 3. Strict no refund policies.
I’m still conflicted. My time is worth a lot as is any ones. I don’t like it when other people waste my time. At the same time, I know I need to change my contract and policy to deal with deposits and refunds. But I don’t like it, there is a part of me that says “I don’t do business this way”. Then again, the situation above is rare, it is not how I do business, nor do I want to do business with people who conduct themselves in that way. Thus it would call for a no refund. So maybe I need to do a full refund if work hasn’t started. No refund if work has started. I want my refund policy to be fair yet firm. Time to think about this some more.
My question to you this week is what is your refund policy?