You are under no legal obligation to offer a refund if a customer…
“…simply changed [his or her] mind, found it cheaper somewhere else, decided [they] did not like the purchase or had no use for it.”
However, offering an explicit guarantee in your marketing can do wonders for your increasing your conversion rates.
In fact, tests have shown that adding a 30-day money back guarantee, you are able to increase sales by 21%.
And in a study by Suwelack, Hogreve and Hoyer published in the Journal of Retailing titled “Understanding Money-Back Guarantees: Cognitive, Affective, and Behavioral Outcomes,” they found:
The results of two experimental studies show that in addition to cognitive effects, Money-Back Guarantees evoke a positive emotional response, thereby increasing consumers’ purchase intentions and willingness to pay a price premium.
The reason? A guarantee is a form of risk reversal.
A risk reversal is any strategy or tactic that reduces or removes the actual or perceived risk a prospect has about investing in your product, service or solution.
As a risk reversal, a prominently displayed guarantee lessens the risk for your customer, which helps them more readily make the decision to buy. The risk stays the same for your business – after all, you are already obligated to guaranteeing your product or service anyway, despite the fact that most consumers don’t know to what extent.
As an article by Dean Rieck at CopyBlogger points out, guarantees are excellent tools for reducing risk because they help you accomplish the following:
- Assure customers that you believe in the quality of what you are offering
- Spell out terms and conditions clearly
- Specify a generous time period for evaluation
- State what you will do if the customer is dissatisfied
More importantly, guarantees are required by law. So why not pivot and make it part of your marketing arsenal to help you increase conversions?
Plus, if they’re good enough for Denzel to offer in every movie, they are good enough for us.
In this essay, we will provide you with explanations, examples, and swipe templates of the following 10 guarantee types:
- The 100% Money-Back Guarantee
- The 100% Money-Back Guarantee PLUS keep the bonuses
- The ‘Prove You Used It’ Guarantee
- The 100% Guaranteed Results
- The ‘We’ll Pay You $100’ Guarantee
- The ‘We’ll Make It Up to You’ Guarantee
- The ‘Double Your Money Back’ Guarantee
- The ‘We’ll Pay the Competition’ Guarantee
Let’s take a closer look at 10 guarantees and templates that you can SWIPE and DEPLOY right now.
This is the absolute stock-standard guarantee type which you have probably seen a million times.
As mentioned, Neil Patel of Quick Sprout states that he increased his conversions by 21% just by adding a 30-day money-back guarantee. Patel goes on to tell us that, in his scenario, he increased overall revenue by 6.4% with his guarantee in place.
The 100% Money-Back guarantee actually comes in a few different flavors, three of which we will discuss here. We will rank them ‘good,’ better’ and ‘best.’
Guarantee Template #1: 30-Day Money-Back Guarantee (Good)
We are so sure you’ll be happy with your purchase that we offer a “30-Day Money-Back Guarantee” to ensure customer satisfaction of our [products/services]. If for any reason you wish to discontinue using the [products/services], we will promptly issue a refund.
Simply contact us at [email address] to speak to a customer care specialist about our 30-Day Money-Back Guarantee.
Guarantee Template #2: 90-Day Money-Back Guarantee (Better)
Put us to the test! Use our product for up to 90 days, risk-free. If for any reason you are not completely satisfied, return the product for a full refund.
Just drop us a line at [email address] to take advantage of our 90-Day Money-Back Guarantee.
The team over at Harmonica.com have gone the extra mile with their risk reversal, offering a full 1-Year Money-Back Guarantee.
Guarantee Template #3: One-Year Money-Back Guarantee (Best)
Try our products/services] for a full year. Put us through our paces, and see what kind of results you get. We’re so confident you’ll be happy after a year of using our [products/service] that we will offer you a full refund of the original purchase price for up to one year.
Try it out and see what happens for you – we think you’ll be pleasantly surprised. If you are not 100% satisfied, contact us at [email address] to take advantage of our one-year guarantee.
Note: Why is a one-year guarantee better than the others?
The answer is that the year-long duration of the guarantee has the greatest impact in the customers’ minds. It denotes the highest level of assurance on your part, and engenders the highest level of confidence from buyers.
The shorter 30- and 90-day guarantees meet with legal minimums, which is certainly called for in some instances. But the one-year guarantee is a smart marketing move – if you can live with the looming possibility of taking occasional returns several months after the initial purchase.
Now, there is also a sneaky little psychological factor here as well: the apathy effect. See, the longer the guarantee period, the more apathetic the customer often gets, thinking they have “plenty of time” to try, test and use the product before the guarantee period is over. They subsequently put it on the shelf, and then completely forget all about their purchase. Thus, shorter guarantees actually force the customer into a fight or flight use or return decision quickly, often causing higher refund rates than longer periods of time.
Also, as you may be wondering about by now, you have surely seen companies offering lifetime guarantees. This type of guarantee comes with a word of caution: if you make such an offer, you have to honor it – even if the refund request comes eight years after the sale. The lifetime guarantee has not been shown to yield better results than the one-year guarantee, so it’s better to establish a cut-off date for accepting returns.
The next major type of guarantees that we need to discuss is also something you have undoubtedly seen before. This type of guarantee hails from a mildly amusing example – the Ginsu knife infomercials of the late 1970s. Envisioned by the late Barry Becher, this classic offer always began with the words, “But wait, there’s more…”
The infomercial shtick usually went something like this:
“Buy the Ginsu knives and we’ll throw in a state-of-the-art handheld juicer for free. But wait, there’s more! Call within the next 30 minutes and we’ll send you a bonus set of filet knives FREE. If for any reason you are not completely satisfied, just return the Ginsu knives, and keep the juicer and filet knives as our free gift.”
The old Ginsu ads are obviously outdated according to today’s standards, but we can still apply their core lesson to what we do as marketers today.
This type of guarantee goes beyond the legal requirements and offers an incentive to buy, lending a healthy boost of confidence to the customer, which can make purchasing nearly irresistible.
Guarantee Template #4
As bonus, when you purchase our [product], we will send you a [bonus add-on item] for no additional cost to you. We are so confident that you are going to be happy with your order that, in the event you are not completely satisfied, we’ll refund [product] and you can keep [bonus add-on item] as our gift to you.
This type of guarantee exploits the fact that the law stipulates that consumers are entitled to a refund not because they’ve simply changed their mind, but because the product or service does not perform as advertised.
The ‘Prove You Used It’ Guarantee puts the buyer in the position to have to do a little something extra to substantiate that you have not met with their expectations – while still meeting with all legal requirements.
Proactiv (acne treatment) provides a guarantee of this type, requiring customers to return the empty product containers to take advantage of the company’s guarantee.
Guarantee Template #5
[Product] is yours to enjoy for a year, risk-free to you. If you are not completely satisfied with your [benefit], simply return the empty package within one year of the original purchase date for a complete refund of your purchase price (minus shipping and handling), no questions asked.
One of my favorite marketers, Ramit Sethi, recently used this type of guarantee in the offer for his ‘Zero to Launch’ info product.
Sometimes, you may want to guarantee the results without explicitly offering a refund. This is a common practice. But before implementing it, keep in mind that according to most legal definitions, you are still obligated to offer a refund if the customer presses the issue.
Approaching from the angle of guaranteed results helps reduce the risk of potential returns because it gets your customer out of the habit of thinking “refund.”
This result-based guarantee is most common in selling services (especially services like consulting or coaching). The idea is that if a customer is not happy with your initial consultation or coaching session, you offer additional sessions to tweak the customer’s perceived results as much as is reasonable.
The Action Coach Group is using this exact approach in its guarantee – “Guaranteed results, or your coaching is free.” That site’s offer is that if you do not see results within 17 weeks of coaching, your coaching will be free until desired results are realized – no questions asked. Note that, in this example, no mention of remuneration is made. The customer has to pay for 17 weeks’ worth of coaching, which is not refundable.
Guarantee Template #6
Our [services] have been tested and proven to work. We are so sure you will love the results you get from our [services] that we stand fully behind our work. If you attend all [sessions/meetings/workshops] for the first [number] months, and are not fully satisfied with your results, we will provide [services] free of charge until you get the results you seek. That means you can purchase with confidence knowing that, even if it takes a little longer than planned, you WILL get the right results.
The ‘We’ll Pay You $100’ Guarantee type is perhaps the most ambitious – maybe even bold – guarantee of all. This method turns a guarantee into a tangible incentive for your customers. PurePointGolf.com is putting this method to work in their guarantee, which reads as follows:
“If after diligently following the instructions and practicing at least 15 minutes every day for 30 days, you honestly feel that you haven’t improved a bit and working with my system has been a waste of your time, we want you to write and tell us. And we’ll write you a check for $100!”
Note that this method of offering a guarantee springboards off of the ‘Prove You Used It’ Guarantee method, only upping the ante by offering the potential of gaining $100 just for trying out the product.
Guarantee Template #7
If after trying out our [product/service] by following all [instructions/directions/advice] you are not completely satisfied after [duration], we ask that you please let us know. We’ll do everything we can to correct the situation, and if we can’t, we’ll refund your money plus $100 to show our appreciation for choosing to do business with us.
This type of guarantee is another bold one. In fact, it’s a twist on our previous example. Forecast Lighting guarantees a speedy delivery using this method. The company’s official guarantee reads as follows:
“Receive your order in three days or less! We know that it’s important to meet delivery deadlines, your time is valuable, and so if we’re late, we’ll pay you $100! Orders must be a minimum of $200.00 to qualify for a $100 credit. Is your order under $200? Don’t worry, you still earn $10 in your pocket! We know that deadlines are important, that is why we are happy to offer this free delivery guarantee service!”
Note that the above example side-steps the return process by drawing the customers’ attention away from the prospect of a refund. The Forecast Lighting example of the ‘We’ll Make It up to You’ Guarantee actually displaces some of the risk of shipping delays – something prone to happen in any type of product fulfillment.
Guarantee Template #8
We strive for order accuracy. In the event that you do not receive the correct order within the expecting shipping timeframe, we’ll give you [dollar amount] back – no questions asked.
Another very famous guarantee is the ‘Double Your Money Back’ Guarantee. Adaps, an Aussie recruitment company, offers this type of guarantee. The company’s guarantee reads as follows:
“If an Adaps contractor or permanent placement leaves your organization before the end of the three-month guarantee period, Adaps will refund double the fees received.”
As Martin Grunstein points out on his blog, the metric to keep in mind is, “99% of people who are impressed by a money-back guarantee will NEVER TAKE UP THE OFFER!” Now, those are good odds.
Guarantee Template #9
We want you to be totally happy with our [product/service], so we are proud to offer a double your money back guarantee if, after every effort to meet your expectations has been made in good faith, and you are not completely satisfied.”
Our last guarantee type is another seriously bold one. The We’ll Pay the Competition Guarantee is always surprising to see. Ohero Fishing uses this type of guarantee, in the following manner:
“If you are not completely satisfied with your purchase, we will buy you an equivalent from our competition!”
This type of guarantee sends a clear message to the customer that your company is fully confident in its products or services. After all, who in their right mind would endorse the competition?
The truth is, you may find a rare opportunity to enter into a joint venture or affiliate agreement with your competition to make the competitor guarantee more profitable – by securing for yourself a kickback each time you “lose” a customer to them.
Guarantee Template #10
If you are not fully satisfied with your purchase, we will purchase the competing [product/service] of your choice.
Wait! There’s more… (Sorry, we had to say that at least one time!)
You are probably thinking, “So, what is the difference between a guarantee and a warranty?”
The answer is that a warranty describes extra things that a product or service is supposed to do. For example, if you sell a chair, the guarantee is that it will indeed be a chair suitable for seating. If you state that that chair can hold 230 kilograms, that statement is the expressed warranty. In Australia, guarantees are something required by law, but warranties are optional extra promises you choose to make to your customer.
Also note that you generally do not have to guarantee “puffery.” Puffery is an advertising technique in which you blatantly overstate things for effect – like Tropicana’s claim that its product is “the world’s greatest fruit and vegetable juice,” much to the competing makers of V8, Campbell’s Soups.
P.S. Guarantees are just one type of risk reversal. In future essays, we’ll be discussing other types of risk reversals to help you pull the conversion level, on your way to doubling your business’s profitability.