We Do Not Negotiate with Terrorists

http://ignitiondeck.com/id/we-do-not-negotiate-with-terrorists/

by nhangen • 13 years ago

36 55 13 years ago

gnu8• 13 years ago

The word terrorism is reserved for actions not approved by our government. Please don't dilute its meaning by using it for a customer insisting on a refund.

maaku2• 13 years ago

If you're going to nitpick, please be accurate. Terrorism is the strategy of taking actions to incite terror within a population to achieve some goal. It goes back much, much further than the current concept of a nation-state.

001sky2• 13 years ago

Its better surmised as just anti-civilian warfare.

rfrey• 13 years ago

I think gnu was being facetious, maaku. As in "only the government gets to redefine 'terrorism' any way they want".

john_b• 13 years ago

It's an analogy. "We do not respond to ultimatums" would also work, but then this post would belong more in their FAQ or policy section than a blog post.

And if anyone has diluted the word "terrorism" recently it has been various governments.

PeterWhittaker2• 13 years ago

Sometimes reading the comments helps me decide whether or not to read the article. I wasn't going to read this one, but your comment made me think I should - I fully expected to "+1" your comment, because on the whole, I agree with your statement.

Then I read the article, upvoted the OP, and decided to write this.

A better headline would have been "We don't negotiate with blackmailing, SOB bullies who string us along with songs of high praise only to demand - DEMAND - their money back for no reason after days/weeks of a fully supported free trial, and who threaten us with all the fury of god's own social network".

Well, that would have been a more accurate headline, perhaps not a better one.

Given the article, whose veracity I will for now take at face value, the headline used works for me. I have no problem with this particular bit of hyperbole.

It's certainly more SFW than "We don't negotiate with fuck-stick time-wasting rave-rave-rave-then-bail bullies".

Though I would have read that article before coming to the HN comments. :->

macspoofing2• 13 years ago

We don't negotiate with blackmailing, SOB bullies who string us along with songs of high praise only to demand - DEMAND - their money back for no reason after days/weeks of a fully supported free trial, and who threaten us with all the fury of god's own social network

There was no free trial. As I understood it, ignitiondeck does not do trials because they "want to discourage the process of ‘shopping,’ that is, someone testing many products in order to try them hoping to return the ones they do not like." (Is that really so bad!!!?!)

So no try-before-you-buy, no refunds. The customer claimed their plugin didn't work for them, after they bought it.

Their policy is what it is, I get that, but it really sucks, and they're just opening themselves up to this kind of negativity. The customer isn't looking so hot here with his ridiculous SEO threats, but neither is ignitiondeck.

glurgann• 13 years ago

Seems the party responsible behind this is vbsocial.com, who at this point, doesn't allow comments. Surprise? I think not.

http://vbsocial.com/ignitiondeck-scam

post_break• 13 years ago

Ignition deck turned off comments too. Don't try and make it seem like one is better than the other based on the fact that they don't have comments.

strathmeyer• 13 years ago

Well obviously they have a Facebook page and Twitter account.

zrail• 13 years ago

If "no refunds" is your policy, that's your policy, and there's no shame in sticking to your guns. If that was my policy and a customer told me they'd moved on and would like a refund, I'd tell them "tough cookies" and move on myself.

That said, my products[1] have a full money back guarantee. A very small percentage of my customers have taken me up on it and the ones who have have almost always had a pretty good reason. The refund policy has basically cost me nothing since Stripe refunds their fee.

[1] https://www.petekeen.net/mastering-modern-payments

dougmccune• 13 years ago

I can't possibly imagine the time and energy wasted on this blog post and back and forth with the customer is worth $300. Not to mention the PR implications... you're calling your customers terrorists! Good god. You have an unhappy customer, give him his money back and move on.

MartinCron2• 13 years ago

Both parties have become completely entrenched "on principle" and are now acting in a way that economists wouldn't consider rational.

Maybe this is a cautionary tale? Personally, I think that both strict no-refunds policies and SEO blackmail threats are antisocial behavior.

Come on kids, you can do better than this.

adrr• 13 years ago

Bad customers are a fact of life. A business should be able minimize damages from these types of customers.

drcube• 13 years ago

It's not about $300. It's about everybody else from now on who will discover getting $300 from Ignitiondeck is as easy as threatening some bad reviews.

Think of the bad PR as an investment. These people will hopefully move on to easier targets now.

Not saying I agree, but I think that's the rationale.

epsylon• 13 years ago

The angry customers aren't "getting" 300$. They're getting their money back. Virtuous giant lose virtually nothing in the process (perhaps the cost of the transaction and some man-minutes for processing the refund).

And customers wouldn't threaten some bad reviews if VG agreed to refund: They'd just get refunded and move on!

This is a pretty bad PR move in my opinion. In fact, it's worse than the threats that the original customer would have carried in my opinion.

comex• 13 years ago

While threatening to SEO negative reviews immediately voids, in my book, any sympathy the buyer might have generated, I'm curious why they can't attempt a chargeback.

macspoofing2• 13 years ago

Urgh. That $300 is not worth the aggravation and all the potential negative (and somewhat justified) PR. Not to mention they may pull the nuclear option and simply do a credit card charge-back. Just give them their money back. You're not looking like winners here.

On a separate note, with no try-before-buy and no refunds, what do you expect?

greenwalls• 13 years ago

I think in this case it may be worth refunding their money and moving on. These blog posts make both companies look bad.

Pxtl• 13 years ago

I appreciate not wanting to encourage a refund-oriented culture, but seriously this seems like the worst possible reaction.

spellboots• 13 years ago

How ridiculous. This post sounds like a pair of children fighting. And whilst your client seems very annoying, calling them terrorists for opting to exercise their perfectly valid rights to (a) engage you in legal proceedings and (b) write about their experience and publicise this writing make you look a lot less professional that they do.

6d0debc0712• 13 years ago

To be fair threatening to have your 'SEO staffers aggressively hit the forums and ratings hubs' seems a bit beyond standard writing about someone. It seems more like they're threatening to flood with lots of reports of bad service, where only one would really be an honest reflection of an experience that successfully picks out the company involved.

Which seems more akin to fraud than honest reviewing.

pm90• 13 years ago

Fraud, yes. Terrorism, no.

mikemikemike• 13 years ago

IgnitionDeck needs to accept that there are consequences for refusing to offer refunds to unsatisfied customers. Either accept the negative reviews, apologize for your policy decision, and move on, or rethink your policy, because UX extends to the sales process.

This customer may be rude, but name-calling and public call-outs don't strike me as a professional response. As others pointed out, they definitely spent more than $300 publishing this post.

TrainedMonkey• 13 years ago

Do not refund them. Send them $300 gift card, with hand written note explaining that you cannot issue official refund due to license they agreed to.

If such situations are as rare as they claim you will come out ahead.

patio116• 13 years ago

As a counterpoint: I have the opposite policy for refunds, and have for the last 8ish years. The official version, to satisfy my accountant [+], is a full refund with no questions asked for 30 to 60 days. The unofficial version is that I will give anyone a refund in (basically) perpetuity. I think my current record is 70 months after the transaction.

My refund rate for BCC is 2.7%. That's the easiest one for me to calculate with a single SQL query. Don't hold me to these, but I think AR and my other products are at about 1% and 0.5%.

Refunds are a very easy way to amicably part ways with ex-customers who are not good fits for you, rather than having the resolution where a) they can't use your software and b) they feel like you've stolen their money.

Refunds quickly remove problem customers from your inbox. This will save you time and, more preciously, sanity.

Prominent money-back guarantees frequently increase sales in a statistically significant fashion across your entire company. This is one of the cheapest A/B tests to implement, by the way, since you can create a guarantee by adding two sentences of copy.

Most customers have a fully functional put option on your digital goods, brokered by their credit card company and assignable to you instantly by saying the words "Internet merchant" and "chargeback." You should prefer that customers resolve disputes amicably, via refunds, rather than aggressively, via chargebacks. Chargebacks come with aggressive fees ($15 to $25 plus the purchase) and accumulating too many of them can get your merchant privileges revoked. (This is about the point in the post where somebody is going to suggest adopting Alpha Black Lotus Depository Certificates, which they believe to be superior to credit cards because ABLDCs don't have chargebacks. This is a moot point because your customers don't possess ABLDCs, but be that as it may, charebacks are net welfare enhancing for merchants because, like generous refund policies, they encourage transactions.)

Refunds will not typically meaningfully impact your cash flow in a digital goods business. You probably have stupendously high margins -- they absorb refunds as a cost of doing business quite easily. You can implement a rolling reserve on yourself [++] to cover them -- mine is $500, which is more than adequate at a revenue figure in the six figures.

+ Your accountant may not be happy if you sell goods with perpetual characteristics because it makes revenue recognition more complicated than it needs to be.

++ Rolling reserve = "Don't spend the last $500 in the checking account", which is good advice for a host of reasons, not the least of which being you'll never worry about refunds impacting cash flow.

networked• 13 years ago

I think my current record is 70 months after the transaction.

If you are comfortable sharing it I would love to hear the story behind that.

patio116• 13 years ago

> I bought a Mac in 1998. I bought Bingo Card Creator in 2007. My Mac broke and I lost my hard drive. I bought a new Mac, but Bingo Card Creator doesn't work on it. I can't use the online version because I'm on dialup that gets charged by the minute. I want my money back.

Signed, Surprisingly Common @ AOL.com

> Sorry to hear that. Apple changed something in 2010 or so, which makes it impossible to use the downloadable version of Bingo Card Creator on newer Macs. We unfortunately can't fix that on our end. I understand that you can't use the online version, which works on Macs and PCs. Thanks for using Bingo Card Creator for so many years, though. Tell you what, tell me your address and I'll write you a check.

tieTYT• 13 years ago

Do you offer money back guarantees for the consulting you provide, too? Or does this advice only apply to products?

patio116• 13 years ago

I was occasionally asked for that. My response was typically along the lines of "The model for consulting is typically that I'm guaranteed my rate and you're guaranteed all of the upside. If you want me to take on the downside risk for this project, I would want to share equitably in the upside. My sense of equitable is that if I double your sales I end up owning half of the company."

That typically achieved the laugh I was going for. But seriously, if my contracts included a no-fault do-not-pay-Patrick option, my rates would be positively Rumpelstiltskinian to compensate.

There's many ways to de-risk potential offerings. Back when I was consulting, a money-back guarantee was not one which I needed to fill my engagement calendar. Customer references, a bit of a brand name, case studies, and a history of doing pretty much exactly what I get paid to do in a pretty public fashion mostly sufficed.

I can also very easily think of situations where that would have been personally catastrophic to me without any fault of my own (e.g. six months down the line client X exits line of business I consulted on, triggers guarantee on our $50k contract after I've already used that money to pay for my wedding). That strikes me as not a great idea, at all.

BryanB55• 13 years ago

Agreed. We do the same and sell digital products. Not happy? No questions, no hassles, 100% refund. Hardly anyone asks for a refund. In fact, I'd say its less than 2% but I don't have an easy way to calculate it unfortunately. In most cases we try to work with people to fix any issues and after an email or two everything is fine. But we occasionally do get the "pathological customers" that patio11 likes to talk about. In those cases having the ability to give a refund is really nice because it is an easy way to part ways and "fire" customers you don't want to work with.

I think a lot of people are initially afraid to offer refunds, most notably for digital products. The ones I've talked to always say "but then they can just ask for a refund and get it for free!" Sure... they could, but, hardly anyone ever does from my experience. My advice would be to at least give it a try and see how it works, you might find out that it is actually an effective marketing tool and a way to gain trust while lowering the perceived risk for new customers.

spinlock2• 13 years ago

I have the same refund policy specifically for chargebacks. Here's a fun side note: despite the fact that I always issue a full refund, I had one customer chargeback a purchase. I decided to contest the chargeback and, amazingly, I won. I still don't know how that ended up in my favor but I feel like I just saw a unicorn and wanted to share.

patio116• 13 years ago

Here's my unicorn: CEO Bob buys the service, uses it happily for 6 months. Bookkeeper Cindy wonders what this strange recurring bill could possibly be, assumes it is credit card fraud, and initiates six chargebacks. I get on phone. Bob brings Cindy on call, explains the situation, and tells Cindy to call bank and cancel chargeback. We document the conversation over an email, which I file with my credit card processor.

I still lost.

ufmace• 13 years ago

What does a refund look like on AR, or any other recurring SaaS product, anyway? If somebody has been using it for, say, 6 months, then decides they don't want it anymore and asks for a refund, what do you refund? The most recent month? All 6 months?

patio116• 13 years ago

Officially, any payments you made in the last 30 days. Unofficially, if you tell me "Gadzooks I got billed for this for 6 months because I never canceled my free trial and missed the 6 invoices you sent me", I'll reverse 2-3 charges (I lose the capability to do so something like 60 days after the transaction) and then tell you that you have options for the remaining months: a) I write a check to charity, b) I write a check to you, c) you let me keep it. Pick whichever sounds fair.

$174 is, literally, less than rounding error.

I am aware of other companies which hew more closely to "Just your last payment", and even one prominent SaaS company with a declared no-refunds policy, but they don't strike me as being material improvements.

marshally• 13 years ago

Refunded license for Ignition Deck: $299

Transaction fees associated with refund: a few dollars

Making an ass of yourself in public? Priceless!

JonMatthews• 13 years ago

Wow - Patrick, I assume that £500 isn't your entire reserve, just the one for refunds? Natural variability in sales would make that a game of financial russian roulette!

patio116• 13 years ago

I honestly do way, way too much cash flow juggling and should just bite the bullet and build up a larger cushion than I have, but you're right, both in the "that isn't the typical cash-on-hand" and "if it were, that would be crazily risky."

adam12• 13 years ago

$300? This blog post makes that company look petty and cheap. Just pay the "terrorist" his money and move on. Wow.

moocowduckquack• 13 years ago

"The reason we do not offer refunds is because our products are digital in nature, and digital products can easily be copied and reproduced. Once a digital product has been downloaded, it cannot be recalled.

Additionally, refunds can be costly, as fees convert positive transactions into negative ones. In other words, we lose money every time we refund a product.

Lastly, we want to discourage the process of ‘shopping,’ that is, someone testing many products in order to try them hoping to return the ones they do not like."

You can't do business in Europe with that policy. The Consumer Rights Directive expressly forbids it.

"Consumers have 14 calendar days to change their minds and return the goods for any reason

Currently under English law consumers have seven working days to cancel a sales contract and change their minds. This is commonly referred to as the 'cooling off period'. This will be extended to a minimum of 14 calendar days. The 14 day period will begin from the time the consumer receives the goods – not at the conclusion of the contract as is currently the case."

http://www.out-law.com/en/topics/commercial/consumer-protect...

edit - oh, and as far as the Reagan thing, their memory seems selective. - "A few months ago I told the American people I did not trade arms for hostages. My heart and my best intentions still tell me that's true, but the facts and the evidence tell me it is not. As the Tower board reported, what began as a strategic opening to Iran deteriorated, in its implementation, into trading arms for hostages."

edit2 - Also, funnily enough, I am currently looking into buying various wordpress plugins for my employer, and I know for a fact that they would not even consider a company with this policy. So I guess I should thank Nathan for bringing this to my attention.

eliteraspberrie• 13 years ago

Canada has similar consumer protection laws. Here "no refund" means "stay away."

codegeek• 13 years ago

I understand that ignitiondeck has a no refund policy and hence they were technically/contractually correct in not giving the refund but seriously why would you go this far calling your customers "terrorists" ? Not to mention that to save the $299, they probably spent lot more time and hence money trying to fight with this customer.

"The reason we do not offer refunds is because our products are digital in nature, and digital products can easily be copied and reproduced."

Wait, what ? As a consumer, I personally dislike companies even if digital that do not offer refunds. yes people can abuse refunds but when it comes to abusive customers, there are many things they can do to waste your time and money even if you don't give them a refund. As far as the digital part is concerned, I don't understand the argument. If they have already downloaded the stuff, then it is always open to be shared with anyone and you really cannot control that. That is the risk of doing digital business. What does that have to do with refunds ?

I am sure most customers are not abusive and refunds can sometimes be genuinely needed. This company sounds like they are trying to be too protective by having these kinds of policies.I would even go too far by saying in my opinion, strictly no-refund companies are a no no for me. Just doesn't give a trustworthy perception to me at least.

rogerbinns• 13 years ago

Don't IgnitionDeck realise they can't win? The customer will do a credit card chargeback which almost always goes through.

Joel wrote about this - http://www.joelonsoftware.com/articles/customerservice.html - 7. Greed will get you nowhere

DanBC• 13 years ago

Hilarious that they write a wall of text about how no one ever gets their money back and how unreasonable this terrorist customer is, and then the last bit of small print is

…The best I can offer now is we downgrade your account to the IgnitionDeck + Membership level and return the difference of $150. It is not a full refund, nor is it a refund of ($299 – $100), but it is a compromise that allows both parties to meet in the middle.

Which is pretty much what the customer was asking for anyway.

adammil• 13 years ago

This sounds more like "We don't negotiate with customers." because even if the customer had been professional and polite about it, their policy is no refunds. Even considering the behavior of the customer, IgnitionDeck is getting some really bad PR for the sake of saving $300.

programminggeek• 13 years ago

A happy customer is potentially worth multiple other customers, a pissed off customer potentially costs you many other customers. Because the refund rate on everything is basically single digits, you should do a refund.

Why? Because the end result is basically going to cost you a lot more in potential revenue than you are "saving" by not giving a refund. Say it costs you like 3% to do a refund, that is like $9 on a $300 product. That $9 savings is going to cost you hundreds of dollars in negative customer sentiment. If they lose a single sale because of this episode, they are at a net loss of $300 because they really wanted to save $9.

Even if you wanted to factor in customer acquisition costs at say $50 to get that sale, you can't get that $50 back because you spent it either way. More importantly, due to the negative publicity this is generating in the way of "Ignition Deck Scam" type pages on the internet, it is now going to cost them more to acquire new customers. So, that eats up even more of those measly $9 in savings.

No matter how you look at it not having a sane refund policy is costing them more than it is saving them by a mile. What a foolish and shortsighted way to run a business.

bradleyland• 13 years ago

I think The Dude said it best: "You're not wrong, Walter. You're just an asshole."

I don't know IgnitionDeck, but this makes me want to never do business with them.

fmavituna• 13 years ago

This is quite pathetic.

When your customer is not happy just find a way to make them so. Start from solving their problems, then free license extension and get down to the refund.

If you are actually losing worthy money at the end of the year due to refunds, take a hard look at yourself, your business and the unreasonable expectation you set while selling your software.

We apply these principles to selling a software with $6K price tag and it works just fine, it should work much better and easier with $300.

P.S. If your policy is not to make any refunds (which is a bad policy) then make it clear, and when someone tells you stuff like this tell them to "Sorry you agreed our sales terms, no refunds. Thanks." And if they are aggressive, don't answer. Also don't blog about it, so at least rest of the world doesn't know that you are charging people for something they can't use and then announcing them bunch of terrorist because they told you that they'll write their bad experience about your product in various forums -even when they choose a bad way to express this-.

We Do Not Negotiate with Terrorists

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