How to Handle Membership Refunds? Best Tips & Tricks
When a customer requests to refund a subscription, it feels like the sky is weighing down on you. Issuing refunds is no pleasure at all. Grant them too readily and you risk losing money. On the other hand, you invite a backlash or a stream of negative reviews by denying a refund on subscription. Both ways, your hard-earned membership metrics can come crashing down. So, you must deal with it delicately.
So, where is the balance, for you and your clients?
Fair and transparent policies are your guideline in this situation. We’re talking in detail about this by providing you with tips on how to properly manage membership refunds, from reaching out to former members with a win-back strategy to consulting a lawyer!
Top 5 Tips to Consider for a Refund Subscription Process
Update Your Membership Refund Terms & Conditions
Before signing up for your membership website, prospects want to know how complicated it can be to cancel, and whether any extra costs are involved.
So we recommend starting with the Terms & Conditions policy page that works for you – and most importantly, making that page clear and easily accessible for your clients/prospects.
- Ask clients to keep the necessary documents, such as a copy of your membership agreement or proof of payment.
- State the exact window for requesting a refund, for example, within 7, 14, or 30 days after purchase or within a trial period.
- To ensure complete transparency, make clients aware of any potential deductions or cancellation fees that may apply.
- List refund circumstances in detail to let clients understand if that may apply to them.
- Regularly review and update your refund policies.
Refund Membership Only within Free Trial Periods
Want to get a refund? Yes, it is allowed, but only if you do that within a certain time frame.
It’s a nice tactic to offer refunds within a fixed time or a trial period.
During this time, enable clients to cancel their membership for a full refund. Give them a full taste of your membership, teaching style, courses, etc. Anything they need to make a conscious decision of whether they want to stay with you or move on.
Gyms, yoga studios, and other wellness businesses that sell memberships, whether for in-class or online lessons, offer such an option. You can easily implement similar tactics of free trials even on your online-only website. This is an easy way to allow canceling subscriptions and refunds.
Clarify Your Money-Back Guarantee in Simple Language
Some online memberships offer a money-back guarantee when clients are not satisfied with the service or content. A money-back guarantee also reflects your confidence in your offering.
But describing this dissatisfaction within the right time frame is important. Display your money-back guarantee details in simple language and at various places:
- Create an FAQ page with questions answered in simple language.
- Write a blog post and update it regularly to reflect current policies.
- Include this information in your marketing copy, email footer and other website pages.
- Create welcome emails with a disclaimer to refund a subscription policy.
Save Some Money with Deductions & Fees for Refund from Subscription
As a content creator, educator, or service provider you suffer reasonable costs when clients cancel their membership and ask for a refund of subscription. Those vary from administrative and website hosting to preparation and equipment expenses.
What you can do to save some money and discourage clients from membership cancellations? By laying down a set amount of deductions. Just like for flight booking cancellations, you can set rules for membership cancellations!
But how exactly can you approach this task?
- Charge clients a prorated fee for the number of days used and refund for unused time period.
- Have a transparent refund policy fee or deduction percentage that is easy to access and read on your website.
- Ensure fairness in fees.
Here’s a sample of the fee deduction table you can adapt.
| After 1-3 days of purchase | Full Refund |
| After 3-10 days of purchase | 90% refund |
| After 10-15 days of purchase | 80% refund |
| Between 15-30 days of purchase | 50% refund |
| After 30 days of purchase | No Refund |
This kind of policy will keep your membership site safe from people who hop on your platform, download all content in a few days, and request a refund!
Enlist the Support of a Lawyer
Lawyers are good at picking the right words for solving conflict situations.
If you’re facing a high volume of refund requests or complex legal issues, consulting with a lawyer can save you time and potential legal trouble.
Moreover, having a lawyer consultant (even as an outsourced specialist) regularly can minimize the risk and save you time in every specific case.
Tips to Minimize Refunds from Subscription
The best way to deal with refunds is to discourage them or reduce them! Of course, there are always personal reasons here and there, but your task is to understand how to reduce refund rates across all your membership services. And here we have a few tips as well:
- Promote long-term membership commitments with discounted rates of annual plans.
- Offer easy downgrades to other membership levels instead of full cancellations and refunds.
- Provide additional value to your membership with extra content and workshops to discourage refunds.
- Dive into the most common reasons for a refund. Why do people cancel? Are these cancellations due to personal circumstances, or are there recurring patterns that can help you improve your membership services?
- Send out automated reminders when it’s time to renew.
- Rely on the explicit Refund Policy page when you see reasons for not giving refunds.
- Deal politely and delicately with refund request customers. Hold your business ethics high and make sure the customer feels the value of being associated with you.
Collect Feedback & Communicate Openly
Failing to communicate with clients or follow your own policies (e.g., not issuing a refund within the timeframe stated on your policy page) is a big risk.
On the contrary, open and friendly communication with your members is key to upholding your membership brand reputation.
Don’t set yourself into the mindset of the battle against refund requests when you get them – rather think of how you can solve the situation with a positive image for your brand. This doesn’t mean you should give refunds easily – it implies you should have a detailed and explicit Refund Policies page you can rely on when you need to stand your ground.
Also, communicate with clients before renewal to collect their feedback on what they like and what they find difficult.
When a refund happens, collect feedback to make conclusions:
- Use exit surveys.
- Schedule a meeting with a client to discover more about why they don’t want to continue using your services.
- Reach out to former members with special offers to win them back.
Essential Components of a Membership Refund Policy
For a transparent and strong policy for refund subscriptions, follow the following tips.
- Clear definition of eligibility to claim a refund of subscription
- Specify the time frame under which customers can refund subscriptions
- Clarify the steps, process, and proofs required to get a membership subscription refund.
- Define the mode of payment and any deductions or fees that will be charged
- Mention the conditions under which a refund request is accepted and rejected.
By keeping these simple tips in mind, you can create a very sound refund policy that would keep you out of disputes.
Conclusion – Deal with Refund of Subscription Effectively
Membership refunds are not to be happy about but you can still make the most of the situation.
Learn from every case, document your experience, and adapt your site pages.
- Provide a detailed list of refund circumstances to help clients understand if they may qualify (on the dedicated Privacy Policy page as well as the normal home page or service page).
- Keep fair and open communication with clients.
- Follow your own policies.
- Charge cancellation fees.
- Support your clients cheerfully instead of taking refunds as a battle.
A WordPress site owner? Try ARMember for building a membership site that helps you deliver your content and courses in the best possible way, discouraging cancellations and refunds.
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Brian Denim
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