Indiana Jones and the Ecommerce Refund of Doom: why we set a hard time limit on ecommerce refunds
Great news everyone: the latest Indiana Jones movie is out. Entitled Indiana Jones and the Dial of Destiny, it is the usual story of finding (stealing?) priceless artifacts and fighting the armies of darkness. Tickets are available here.
Digging up the past
Speaking of archaeologists trawling through ancient areas in search of the facts, those of us involved with the CU Ecommerce service often have to resort to the archives to dig up the past. This is usually because a customer of one of our clients requires a refund. Of course, we are happy to oblige. Having a sound refund policy – and acting on it – is a good way to increase customer loyalty and good PR as we have discussed before. Also, as mentioned before, having a refund policy is mandatory. You can read some sample policies here to help craft your own.
However, while Indiana Jones movies are fun fantasies, believing that a refund on a credit card payment can be granted at any time after a purchase is more like a horror film so terrifying you can hardly bare to watch. Our clients on campus have been asked for refunds up to 27 months after a purchase has been made. That’s a long time even for those of us who remember seeing Raiders of the Lost Ark in the movie theatre when it came out.
Why we don’t like bringing up ancient history
There is more than one reason that we do not allow for refunds over two years later. The first and most practical reason is that we physically cannot do so. We are limited to viewing 24 months of ecommerce transaction records in the clearing system we use, E-xact. As we need to be able to view a transaction in their system to be able to refund it, that means we cannot execute such refunds.
Searching for purchases are often conducted with vital pieces of information. For instance, the customer sends us the registrant’s name rather than the card holder, or the date is missing from the request. We can also only search in blocks of six months to search through 25 months of transactions could involve five searches.
In these situations, the user might then request we simply repay the fund by cheque. Web Services cannot do this. While an individual unit can go through the process, the credit card industry strongly advises against using this method It’s bad customer service as the card user expects a refund to be seamless. And of course when it comes to the good ol’ fashioned cheque, as Indiana Jones would say: “It belongs in a museum!”
Security is another reason we limit refunds. The credit card industry tells us that the longer the period of time available to request money back on a purchase, the more time malicious characters have to infiltrate a credit card holder’s account and request refunds – allowing them to then steal more money from the card.
Research also shows that if we state on a refund policy that we only accept refunds up to X days after a purchase we are saving time: customers don’t have to contact merchants on campus to ask, and merchants then don’t have to ask us in turn.
When we execute refunds it also causes mismatches in the accounts for an event. If it is an annual event we will redress that imbalance the following year, but if it is a one-off ITS Finance has to claw back money we have already paid out, a fear of ours which is akin to Dr. Jones’ phobia of snakes.
Finally, there is a presumed reasonable refund period. It is basic business operations to tell a customer they have 60-days to request a refund. That is the most the majority of businesses in Canada allow for. (You may allow for longer – see below.)
How to avoid refunding purchases older than Harrison Ford
For all these reasons we are suggesting you add the following text to add to your refund policies:
We allow refund requests up to 60 days after the date of purchase. We cannot make refunds after this time.
Note: You may have already covered this eventuality because you have set a refund policy which does not allow for refunds after an event begins (e.g., the first day of a conference).
On the other hand, you may wish to extend the 60 days to longer if you still want people to be able to withdraw from an event up until it begins. For example, you launch your registrations on May 1st for a conference which begins on September 1st. If you limit your refunds to 60 days that means by the end of June they can no longer request their money back. In this case it would be perfectly acceptable to set a refund policy for 120 days.
There you have it then: don’t make us break out the bull whip – please consider limiting your promises around refunds to a period of time that is both fair to your customers and manageable for you (and us).