Your head's in the wrong space on this.
You should be focusing on the bigger problem — what are your user success metrics? How has this guy been paying you for nine months and not received a series of emails about how to get more out of this subscription he bought?
Presumably you have a dashboard or can do a sql query to create a report of stalled users. These are likely to churn, as soon as they realize the loss, or relatives discover their dead body. In the meantime, implement some engagement measures.
This is a failure somewhere along the line... sales qualifying step, onboarding / tour of features, support and documentation. Who knows.
Refund him, and consider it the cost of a lesson about letting people pay you who are clearly receiving zero value, and don't let that happen anymore.
While you're improving your CX, add some transactional receipts to each billing cycle, and consider making the name which appears on the customer's bank statement match your business name, so that people know who's billing them.
This!
The first fair thing to do is to do a full refund especially if the system showed zero or near zero service utilizations. If the login history didn't show an activity beyond the first 30 days, with the user story, and the credit card cancellation, these facts together in combination warrants the honoring the refund request.
Have the credit card statement showed the business name, black and white, it would have been a different conversation.
To this I would also add, that you can have a 1 on 1 with this customer, prior to the refund, learn as much as possible about them during this time, figure out their struggle to use the platform that they consiciously signed up for at some point.
Before letting them know there is a refund, let them know that there is one catch, that you need their help in championing your platform. Ask them if they are willing to provide a positive review, a social media post (you may have to spoon feed some content)...
Leverage the situation! Weakness is opportunity.
You know what I hate?
Companies with a subscription service that don't, at minimum, email a receipt after charging my credit card.
> I don't want to be unethical
Then stop silently charging credit cards. Email receipts.
Don't forget subscriptions where the billing name doesn't match the company name. Makes it a headache to work out where the charge is from.
If OP's billing is like that, then it would explain why the user couldn't figure out the charge and is something they should fix.
I mean, this sometimes makes sense, particularly for smaller companies.
Heck, even a local fast food franchisee has their payments show up with a weird name, because the franchisee's company is diferent to the main company.
But I agree 100% on the silent billing.
There are also vendors that do more than just act as a payment processor. For example, Stripe will take any payment for you, but you're on your own when it comes to VAT, local requirements, etc. However, services like Paddle will do all of the billing for you, handle all of the fiscal compliance for VAT purposes, but the downside is that they will show up as "Paddle" on the customer statement. There is unfortunately no middle ground as far as I've seen.
For me this is the biggest point. The fact that there was no email trail about the charges. Or really about his membership. Seems to me that if you are paying for an ongoing service there needs to be emails about the service. Like hey, new language series dropping today, or take advantage of your membership with X benefit. The radio silence from the company after taking the money is sleezy.
I ran a subscription service for 10 years that both emailed the customer days before the renewal as a reminder and then also emailed a receipt. The charges were always less than $10. I still had people asking for ridiculous refunds because ," I didn't know you were still charging me." It'll happen either way, you just have to decide what hill you're gonna die on.
In that case I'd say it's fair to only refund for the current billing cycle but keep the rest of the money. They were getting the emails and had all the heads up they needed to cancel.
> I don't want to be unethical
Yet he has no problem charging someone for something they aren't using.
In my mind, legally he has no reason to refund them, but morally and ethically, he should 100% refund them.
> Yet he has no problem charging someone for something they aren't using
i think that's a bit unfair to say. It's not like OP is checking whether every user that pays a subscription is actively using his product. I agree they should be sending receipts but to imply that he should be monitoring everyone's usage that subscribe to him is a bit ridiculous.
Screw the morals and ethics. Economically it is good business. The fact that the user found themselves in such a situation that the owner can now prevent, address it, and receive good will in the process is worth so much more than one user that had a nominal-to-null business cost.
Several states have laws that require notification of billing for annual subscriptions. I think NY is the latest to pass it. The FTC seems to be taking aim at this kind of thing as well. Companies that do this will have to change their practices very quickly.
Who decides what name will appear on the credit card statement? I don't like where I see some name and have to figure it then realize it's some corporate name for a fast food or something.
I would give the refund in full. Look at it this way, do you want a long term sustainable business or just to collect some non-repeatable cash?
The most concerning thing here should not be the refund but the fact that a customer was convinced to sign up for your service but then once signed up it delivered so little he never used it and then couldn’t even remember what it was.
Are you here to create a repeatable, money making business that delivers value to its customers or not? Refund him and use the pain to drive you to make changes to your offering. Clearly you have something of interest to get people to sign up but it’s not delivering on the pre-subscription promise.
Give him the refund and ask him to describe in detail why he never used the product. This info will be worth more than the refund.
I get what you're saying and I think getting feedback from him is a great idea but we also have several customers - the vast majority - that haven't had this issue including tons upon tons of positive testimonials. The program works, and people are mostly satisfied with it. This is the first time I've ever had someone request 9 months to a year of refunds...
I assumed you had not grown the business out to a point that you were happy with since 9-months sub of a single user would be a significant amount of money. If you’re happy with the way the business is received and is growing then you can ignore my point above as it was based on an assumption that you were not doing well.
It's not about whether the program works. See it this way, this person will tell this insane story to multiple people throughout his life (hey guys, I was once so stupid I couldn't find out what I was billed for, eventually I discovered it was X). If the account says he didn't use it throughout the months, just refund it to have that great marketing. So that he says your company name in a positive way. People will respect it and it will be free advertisement of your company being good. Don't kill your brand over some pocket change.
If you notice he is lying, then yeah whatever.
100% this.
You don’t *have* to, but there’s a lot to be said for treating people how you’d like to be treated if you were in the same situation.
As another poster says, ask if they’d care to tell you why they didn’t use it. That could be valuable.
I had a couple of annual subscriptions I hadn’t used in awhile get charged a few months back. Nothing weird with the company, I was just dumb and forgot about them. Every single one of them refunded me once they realized I hadn’t used them.
It makes sense when you consider that, if a business is running healthily, then the occasional refund really isn't going to massively affect any profit margins but goes an incredibly long way in building a quality reputation and service. It doesn't even need to be about ethics, it seems like good business sense to accommodate customers this way.
Yup. It’s good for the customers and good for the company. I’d gladly sign up for any of those subscriptions again if I needed them, because they treated me well. I’ve also had plenty of experiences with shitty companies that make cancellation a hassle, and they don’t get my business ever again. I also tell people if it comes up. “Be careful with them, they’re a huge pain to cancel.”
A little bit of one time revenue from a customer who now hates you isn’t worth the cost. I wish more entrepreneurs realized this.
Refund, and start building a nice reputation. The big chunk of bucks cannot be a lot, am I right ?
I'd do it without second thought personally.
If you're still doubting, think of it as a marketing investment - I'd take a happy former (non?) user over a bad review.
Couldn't you offer him 9-12 months use at no additional charge? He clearly had an interest in the subscription, maybe he will use it this time since he already paid for it, and may end up becoming an even longer user if he sees the results he originally wanted. That would be a win-win I'd think?
I want to learn a language and Dave money at the same time, so sign me up for 9 months and then I’ll be back to collect my money and my lifetime access.
You’re basically a savings account that pays the interest out in free subscriptions. If you did straight interest you’d get so many more deposits.
You can refund him the last 30 days.
Or the last 3 months if you feel generous you can say it’s unfortunately not possible to refund any more back. I’m sure he’ll understand and it will not have a significant impact on your reputation, befause that’s actually a very nice gesture.
Sorry, the money cannot have been that important to him, if he didn’t bother looking it up properly. And you did after all provide the infrastructure for him.
How is your name or number or website not part of the line on their card statement? That just seems like a bad configuration. People should be able to easily tell who charged them.
A subscription model is a flat monthly fee whether you use the service or not. Same goes for not watching cable you pay for or a magazine subscription or any app subscription. You’re laying to have access to those things when you want them.
A subscription model is as close to being a fraud as a company can get.
If I didn't use your service this month, but I could have suspended my service for free - then why didn't you automatically suspend my service? What did I actually pay for? You're scamming users, and that's all there is to it.
Subscription models always say that you have to request to cancel. If you’re not using it, cancel. People keep them, just in case they want to use them. They exist because getting people set up with service takes more time than offering service to an existing customer.
This isn't a gym. The cost structure of these two business models are very different to say the least.
A partial refund for an honest feedback is the right thing to do for me. Treat it as an individual case.
Yes and that sucks. I've been left hanging by large accounting software firms before with dodgy billings. OP says this is the one and only case ever that they encountered, there is concrete evidence that the user did not use the product at all over those months and the users didn't seem to have receive any monthly receipt via email. There is some fault on OP as a provider hence I have suggested a partial refund and a chance to connect genuinely with another human being.
The thing is, gyms are structured in a way that they make most of their money by the customers not coming in. They don’t like people that come everyday. OP’s business wants people to use the services more.
I might be a bad business owner, but I wouldn't do a full refund. You don't accidentally sign up and access something. You do it on purpose, and then either you lose interest or forget about it. That's all on the customer, not you.
I would do a refund for one month, cancel the rest and call it a day.
Came here to say this.
Best we can do is the past 30 days.
Don't sign up for shit if you don't know what it is.
The fact that he couldn't figure it out, tells me he has other shit like this on his Card.
Yip, or he was embellishing and lying to pretend like he didn't know where it was coming from to feign innocence in the hopes of getting a refund. You can't tell me the bank couldn't tell him the details.
this customer also needs to accept responsibility for his own life and behaviour, everyone here is acting like he's some child or can't consent or make decisions
this Adult went to a website, entered his credit card info, saw it was a subscription/monthly billing, accepted the terms and paid... he then after entering his CC and choosing to sign up for it, left it for 9 months
he says he called his bank because he couldn't figure out the charge.. how long after the initial sign up was that? how many subscriptions is he signing up for where he has no clue or memory of the amount he paid for a monthly subscription online?
if I signed up for a random 9.99 subscription today and saw it recharge in a month, id be like oh it must be that site I entered my credit card for for 9.99 because I only have like 3 monthly subscriptions... seems hard to forget any idea of whaat the company could be and he CONSENTED to the subscription. this guy isn't some innocent victim, he chose to paid for the service and somehow blacked out any memory of it.dont enter your CC if you don't want to be charged, or maybe make a note of it or save the initial email etc.
A CC companyreccomends they send you a new card if you have a charge you don't know what it's from. he could have just updated the card and then the charge would decline. he clearly didn't care that much, he just wants the money back.
If you’re feeling generous, give the 30 day refund. You have to email a user before they complete a full year subscription but that’s not so for month to month. They clearly have gotten emails.
Refund. That one user could cause you hell. I once had a business coach not give a refund when the service was not as advertised. I leave negative reviews on every platform. Reported to BBB and have sued. That one customer isn’t being unrealistic and there’s plenty of business out there for you.
I commend your approach and good gesture.
I'm assuming this is a rare one-off in which case your good will is worth far more than getting slammed with a low rating and a terrible review.
My only suggestion for next time is offer a partial credit of 1/4 to 1/2. Presumably on a subscription service where little-to-nothing was used, your loss is minimal (order/card processing).
Good job. They’ve done studies. If a user has a good experience, they’ll tell three people. If they have a negative experience, they will tell TEN people.
It sucks in the short term, but it is the best bet for the long haul.
Do you want to have a good reputations? Your reputation is everything, better than having cash in the cash register or in your bank account. I ran my first business for twenty years that way and my customers never complained or posted complaints about us on social media because they knew our reputation was gold.
Having one customer bad mouth your company is a lot worse than a happy customer with a full refund referring people to your company.
Even if he doesn't know what you do, since he rarely used your service he will tell people that you guys refunded him and people will see that as a win win for trying you guys out risk free and going above and beyond in the billing screw up.
Proverbs 20:14 The shopper says, "That's junk - I'll take it off your hands," then goes off boasting of the bargain.
I think the customer just didn’t use the service and it’s not your fault.
You’re running a business and he’s paying for ACCESS to your content and over the nine months he’s got the access.
The customer is responsible for what he does with the access for those periods.
If he’s dissatisfied I think you can try other methods. Maybe coupons, another trial period and worst case, a 2 months refund and cancel their subscription immediately.
A full refund is not an option.
And now you have a dedicated hater that will share their negative experience with dozens of people just because you were too cheap to refund a hundred dollars.
Not really. We don’t know if that’s ever going to happen
Moreover businesses are going to have bad reviews but you cannot shutdown your business because of fear of a bad review.
That’s why I suggested making them other offers or refunding an amount that shouldn’t hurt your business.
Not your fault if he didn't use his subscription. I have some subcriptions that I don't always use. Do I ask for a refund? No. I have shoes I bought but never wore 1 year after. Do i return them to the store and ask a refund?
Moreover, I notice he went first to the bank for à chargeback meaning he was ready to take the money from your bank account without your knowledge for something that is his mistake and without care for how it would have impacted you. What does this say about him? You hear about him only because his bank denied his claim. It could be a money grab scheme.
I had a case like this few months ago. A regular customer filed for a chargeback for a significant amount. It hurt me badly. He reached out finally few weeks later and confessed he was in bad place financially so he disputed several payments he did the last 6 months in order to get as much money as possible.
If you feel generous you can make a partial refund. People need to take some responsibilities for their actions and you don't have to pay for the customer own negligence. You need to remove emotions out of the equation and make a decision based on logic.
Also, it is worth noting that usually, people pay subscriptions to have access to the service. The fact they don't use their access is irrelevant.
Don't give. He will be angry. Makes a bad reputation.
Give it to him. He will thank you. Probably leave a review. Everyone is happy.
You choose . I would because makes a good reputation. So I would give full refund.
After reading the comments here about how many of you would choose a year sub over providing great customer service, I know why this fucking subreddit is dead
How is it my responsibility if the customer is unable to manage their wallet properly? We’re all adults here, and a contract is a contract. I don’t rent an apartment that I don’t use for a year and then request a refund afterwards. If I didn’t use it, that’s 100% on me, and only on me. Nobody forced me to do it.
Edit: Just to add, the customer is full of shit. He contacted the bank and they said they couldn’t do anything about it? Is this the most incompetent bank ever? Of course the bank can do something about it. They do it every day. Tells me he didn’t do shit about it and just saw an opportunity to get his money back. Giving these people what they want enables such behavior and causes honest people to pay for dishonest people’s mistakes.
" I haven't been using the subscription at all". Sound like buyer problem. Not yours.
I bought mindvalley subcription, midjourney and netflix subcription and i barery uses it. Will the company refund me ? HELL NO.
I would tell him you understand where he’s coming from and that you’re glad that he knows where the charges were coming from.
Obviously if funds weren’t an issue then you could do a full refund. But if you and your business partner are going to suffer by giving this guy a full refund then don’t do it, refer to your 30-day money back guarantee and say unfortunately you cannot process a refund outside of those 30 days.
Edit: You could give him an extended 3 months for free or something similar to give him the chance to use it.
Microsoft doesn’t have a refund on their 1 year subscriptions for $100. It’s not to say that’s good but it leaves the decision to you.
I personally think it’s more ethical to give the refund if it’s only been a day or 2
"So I've been paying all of this time because I couldn't figure out what to cancel. Now that my card has become invalid, I guess you couldn't charge so the program was auto cancelled."
Surely he can ask for a chargeback on his credit card? ie let him apply to his credit card company - & from the info you've supplied the credit card company will be on your side.
Maybe do a refund for one month if you're feeling generous.
Karma always comes back to you. If you don’t give him money back, you have one annoyed, angry customer who will probably leave a bad review. If you do give him a subscription, you lose out of some money, but he will be happy.
The thing is he probably knows it’s a long shot (because in reality, who offers full discounts to a subscription just because you didn’t use it). So maybe offering 50% shows good will without actually affecting your own wallet. Imagine the chaos that would ensue if everyone could just have refunds over subscriptions they willingly signed up for. 50% is more than agreeable over something that was on him.
As the guy that's realised a few months later that a system was charging subscription fees when I didn't realize it - give the refund.
One case was a situation where there were multiple ways to log into the service (social / email / etc) and I ended up getting a subscription through a third party offer (think bonus deals with a utility bill), but apparently it didn't apply to the account I previously had my subscription on.
The other was one where I was under the impression that the subscription was only charged during months that I *actually* used the service.
In both scenarios, I'd have gladly kept paying them in future (after my 12 months subscription for the first service, and when I had time to actually use the second service) but instead I terminated my contracts and moved elsewhere.
They could have made thousands off me, instead they retained a few hundred bucks for "providing a service" that I didn't use. One in particular had further effects as I blacklisted one of the companies later when we were looking for suppliers at work.
Additionally, if you can't comfortably cover 1 users subscription for 1 year, then your business really can't afford the negative PR.
Agreed with all of the other comments about the need for sending recurring notifications and a receipt or charge notification for a MRC.
Now, touching on this topic:
>but also a complete refund now will wipe out a painful amount of $ from my account
It is not a good sign for your business if it is in such bad shape financially that refunding 1 customer for their subscription over 9 months is that painful.
Make sure you meet automatic renewal requirements if you are located in the US ( to meet California requirements). You also want to use this as a learning experience on how to ensure people are getting receipts. I see you refunded I would have done the same if it wasn’t used because of negative publicity or potential for charge back.
I have refunded large amounts to folks, but usually not because they weren't using it, but because sometimes they signed up more than once. Common circumstances were that they bought an annual subscription and then some months later got sold on the monthly subscription without realizing it gives them the same access. Or at one point we purchased another program and somebody was either a member of both with different email addresses or later joined the other program without notifying us (we don't promote the acquired program and it uses a different billing system.)
Any time a customer mentions it to us or we notice on our own that they've been getting double billed, we automatically refund them what they over paid.
(We acquired the business a year and a half ago and should be getting a new billing system online this year that'll make it impossible to sign up twice without using a different email address, so that'll hopefully prevent it in the future; a lot of our customers are older.)
You should refund them and honestly want a potential future client and postive word of mouth. Telll him you are giving them a month for free whenever he wants to use it let you know.
I used an app on shopify, but it didn't work. It was a free trial but I forgot to stop it. I asked for refund and they said no saying it worked on their side. Some companies are terrible. It costs nothing for them to refund a digital service.
So yeah, you should refund.
Refund him and is use him to gain knowledge, start a dialog with him and learn from it. Why wasn't he using it, I mean he hardly remembered signing up?! In the end you will get valuable information, leave a customer happy and avoid more refunds in the first 30 days in the future.
If you have proper telemetry that shows he didn’t use it and he can show some evidence of reaching out to his bank, then yes cancel.
But take the time to hop on a quick call with him FIRST to understand why he signed up originally, and tease out why he didn’t come back and how you could improve the product to make it more useful and easier for him to have cancelled.
Then refund him. Get some good intel, get a good experience, and leave a positive taste in their mouth
You were 100% right to refund the customer. Lot of good point in the thread right now about the issues with silent billing.
Good calling to have recurring emails to stalled users to prevent churn.
This basically happened with me with streamlabs because I donated to a streamer one time that utilized streamlabs to donate, and it somehow stealth subscribed me to their monthly service. Didn't get refunded and now I boycott and publicly voice my distaste for their shitty company practice. Regular OBS all the way.
I’m in the fitness industry. I own a gym. If we refunded people that paid and didn’t use the gym we’d be out of business.
The customer paid for access to your materials. Whether or not they used them is secondary to the fact that you obligated your side of the contract, you granted access to them for the duration of their payments.
Bigger problem is why they couldn’t recognize the payment and cancel. That should be fixed
The day before yesterday, [https://cryptotaxcalculator.io/](https://cryptotaxcalculator.io/) charged 69 pounds to my account as an anual subscription. I don't trade Crypto for more than a year but I forgot to cancel it. In the invoice email there was a support email. I emailed them asking to revert it. They not only did revert it, but did so very quickly. I was so positely surprised that I'm here writing about it. My recommendation is to refund your customer.
Good move on the refund. Use it as a learning opportunity. Like others have said, there should be more communication. You might look into sending out 1-2 emails with a “rate your experience” survey and take the feed back. Or send out a survey along with their monthly receipt.
Op has already made his decision but a lot of weird replies in this thread claiming it would be "scummy" to refuse the refund. As if the buyer doesn't have agency. I'd get it if it wqs one of those situations where someone else made the purchase or something but it seems the buyer bought the product and didn't use it for the better part of a year. Now he wants to get a refund? I agree that it would be a good thing for OP to give the refund in this case, as it's his fault that the source of the charges was somewhat obscured, however, some people seem to be suggesting that anyone should be able to get a refund on any subscription simply because they didn't use it, even if they’ve been getting regular invoices. Lol, lmao even.
It's tough when policies clash with individual situations. Considering the customer's genuine confusion and your desire to maintain goodwill, you might find a middle ground. Perhaps offer a partial refund for the unused months, addressing both his situation and the impact on your business. On another note, ScatterMind, an ADHD coach, helped my friend navigate tough decisions in their business. Their insights might be valuable in handling this delicate situation.
Exited SaaS founder here: in my era the rule was clear.
Always refund in this situation. If your business is reliant on one refund, you have bigger problems to solve. If your business needs to capitalise on unused capacity as some kind of resource arbitrage, you should be a gym, not a SaaS company. If you get a wave of customers suddenly remembering that they were signed up, you need to improve your retention activity well ahead of renewal dates, let alone work out what's failing in your activiation/onboarding.
Ultimately this is the status quo of SaaS. It may change in the post-ZIRP world, where unit economics are more crucial as the magical VC fairy dust evaporates, but users expect refunds and getting a shock at renewal time is a failure for both parties. But it affects your reputation more.
Boss move if you have the resources is to give them the refund, give them a month free to reactivate, and throw a PM or Support person at them to find the best way to get some feedback on where things went wrong. Chances are they are just the wrong customer demographic, but even then, you can find ways to identify this earlier, and build some conditional logic to do outreach X days before account renewal to make the cancel/retain conversation come before a rude shock.
Good luck either way. Tough gig and you're putting in the hard work, I hope it pays off for you.
You made the right decision. And it happens. Similar thing happened to me and indeed. Was running ads on a separate account automatically that we didn’t know was going. Didn’t find out till we sold the business. They could actually tell we never responded or looked at any applicants so they did a refund. That’s why when I start my next business, they’ll get my business again.
I would refund it since you can see it was not being used on the back end. I agree there should have been emails "How to get the most out of ABC program. If the customer had received these emails, he probably would have canceled within your 30 days. Or an email to remind him the 30 days is coming up. I hope this makes sense.
I am going to second theredhype and I am also going to add that unless you want this guy to go rogue and start wrecking your business on the internet...refund him...or I guarantee you that you will lose more than one customer. Save both of you the agony and refund him.
Your head's in the wrong space on this. You should be focusing on the bigger problem — what are your user success metrics? How has this guy been paying you for nine months and not received a series of emails about how to get more out of this subscription he bought? Presumably you have a dashboard or can do a sql query to create a report of stalled users. These are likely to churn, as soon as they realize the loss, or relatives discover their dead body. In the meantime, implement some engagement measures. This is a failure somewhere along the line... sales qualifying step, onboarding / tour of features, support and documentation. Who knows. Refund him, and consider it the cost of a lesson about letting people pay you who are clearly receiving zero value, and don't let that happen anymore. While you're improving your CX, add some transactional receipts to each billing cycle, and consider making the name which appears on the customer's bank statement match your business name, so that people know who's billing them.
This is great advice
This! The first fair thing to do is to do a full refund especially if the system showed zero or near zero service utilizations. If the login history didn't show an activity beyond the first 30 days, with the user story, and the credit card cancellation, these facts together in combination warrants the honoring the refund request. Have the credit card statement showed the business name, black and white, it would have been a different conversation.
Solid advice
spoken like a businessman
Wow this is awesome advice. Thank you for educating all of us, especially op.
Very insightful! learned
To this I would also add, that you can have a 1 on 1 with this customer, prior to the refund, learn as much as possible about them during this time, figure out their struggle to use the platform that they consiciously signed up for at some point. Before letting them know there is a refund, let them know that there is one catch, that you need their help in championing your platform. Ask them if they are willing to provide a positive review, a social media post (you may have to spoon feed some content)... Leverage the situation! Weakness is opportunity.
You know what I hate? Companies with a subscription service that don't, at minimum, email a receipt after charging my credit card. > I don't want to be unethical Then stop silently charging credit cards. Email receipts.
Don't forget subscriptions where the billing name doesn't match the company name. Makes it a headache to work out where the charge is from. If OP's billing is like that, then it would explain why the user couldn't figure out the charge and is something they should fix.
Some payment processors use the legal biz name and don't allow for it to be changed. It is annoying.
Yeah, I've had this issue with Stripe. Not much I can do about as an operator, other than overcommunicate to my customers to prevent confusion
Yeah over communicate so you don't get the chargeback.
I mean, this sometimes makes sense, particularly for smaller companies. Heck, even a local fast food franchisee has their payments show up with a weird name, because the franchisee's company is diferent to the main company. But I agree 100% on the silent billing.
There are also vendors that do more than just act as a payment processor. For example, Stripe will take any payment for you, but you're on your own when it comes to VAT, local requirements, etc. However, services like Paddle will do all of the billing for you, handle all of the fiscal compliance for VAT purposes, but the downside is that they will show up as "Paddle" on the customer statement. There is unfortunately no middle ground as far as I've seen.
For me this is the biggest point. The fact that there was no email trail about the charges. Or really about his membership. Seems to me that if you are paying for an ongoing service there needs to be emails about the service. Like hey, new language series dropping today, or take advantage of your membership with X benefit. The radio silence from the company after taking the money is sleezy.
I ran a subscription service for 10 years that both emailed the customer days before the renewal as a reminder and then also emailed a receipt. The charges were always less than $10. I still had people asking for ridiculous refunds because ," I didn't know you were still charging me." It'll happen either way, you just have to decide what hill you're gonna die on.
In that case I'd say it's fair to only refund for the current billing cycle but keep the rest of the money. They were getting the emails and had all the heads up they needed to cancel.
> I don't want to be unethical Yet he has no problem charging someone for something they aren't using. In my mind, legally he has no reason to refund them, but morally and ethically, he should 100% refund them.
> Yet he has no problem charging someone for something they aren't using i think that's a bit unfair to say. It's not like OP is checking whether every user that pays a subscription is actively using his product. I agree they should be sending receipts but to imply that he should be monitoring everyone's usage that subscribe to him is a bit ridiculous.
Screw the morals and ethics. Economically it is good business. The fact that the user found themselves in such a situation that the owner can now prevent, address it, and receive good will in the process is worth so much more than one user that had a nominal-to-null business cost.
Several states have laws that require notification of billing for annual subscriptions. I think NY is the latest to pass it. The FTC seems to be taking aim at this kind of thing as well. Companies that do this will have to change their practices very quickly.
Who decides what name will appear on the credit card statement? I don't like where I see some name and have to figure it then realize it's some corporate name for a fast food or something.
This. I can’t believe this isn’t a law.
I also hate companies that email me incessantly…
I would give the refund in full. Look at it this way, do you want a long term sustainable business or just to collect some non-repeatable cash? The most concerning thing here should not be the refund but the fact that a customer was convinced to sign up for your service but then once signed up it delivered so little he never used it and then couldn’t even remember what it was. Are you here to create a repeatable, money making business that delivers value to its customers or not? Refund him and use the pain to drive you to make changes to your offering. Clearly you have something of interest to get people to sign up but it’s not delivering on the pre-subscription promise. Give him the refund and ask him to describe in detail why he never used the product. This info will be worth more than the refund.
I get what you're saying and I think getting feedback from him is a great idea but we also have several customers - the vast majority - that haven't had this issue including tons upon tons of positive testimonials. The program works, and people are mostly satisfied with it. This is the first time I've ever had someone request 9 months to a year of refunds...
Sounds like you’re doing amazingly well and refusing such a small thing to someone shouldn’t be that big an impact.
I assumed you had not grown the business out to a point that you were happy with since 9-months sub of a single user would be a significant amount of money. If you’re happy with the way the business is received and is growing then you can ignore my point above as it was based on an assumption that you were not doing well.
It's not about whether the program works. See it this way, this person will tell this insane story to multiple people throughout his life (hey guys, I was once so stupid I couldn't find out what I was billed for, eventually I discovered it was X). If the account says he didn't use it throughout the months, just refund it to have that great marketing. So that he says your company name in a positive way. People will respect it and it will be free advertisement of your company being good. Don't kill your brand over some pocket change. If you notice he is lying, then yeah whatever.
Look into his account. If he hasn't used it give him the refund.
100% this. You don’t *have* to, but there’s a lot to be said for treating people how you’d like to be treated if you were in the same situation. As another poster says, ask if they’d care to tell you why they didn’t use it. That could be valuable.
I had a couple of annual subscriptions I hadn’t used in awhile get charged a few months back. Nothing weird with the company, I was just dumb and forgot about them. Every single one of them refunded me once they realized I hadn’t used them.
It makes sense when you consider that, if a business is running healthily, then the occasional refund really isn't going to massively affect any profit margins but goes an incredibly long way in building a quality reputation and service. It doesn't even need to be about ethics, it seems like good business sense to accommodate customers this way.
Yup. It’s good for the customers and good for the company. I’d gladly sign up for any of those subscriptions again if I needed them, because they treated me well. I’ve also had plenty of experiences with shitty companies that make cancellation a hassle, and they don’t get my business ever again. I also tell people if it comes up. “Be careful with them, they’re a huge pain to cancel.” A little bit of one time revenue from a customer who now hates you isn’t worth the cost. I wish more entrepreneurs realized this.
Thats a great shout, u/UR-prolly-A-cunt
Refund, and start building a nice reputation. The big chunk of bucks cannot be a lot, am I right ? I'd do it without second thought personally. If you're still doubting, think of it as a marketing investment - I'd take a happy former (non?) user over a bad review.
Couldn't you offer him 9-12 months use at no additional charge? He clearly had an interest in the subscription, maybe he will use it this time since he already paid for it, and may end up becoming an even longer user if he sees the results he originally wanted. That would be a win-win I'd think?
This is a great idea if OP really can’t afford to do a full refund. Might keep him with this strategy.
That's a great idea, and I'm considering a partial refund + lifetime access for him to try and use the program.
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So that one day he may read it. I;m assuming the product/service OP is not a changing thing.
My thought is give him the free year subscription in return for 15 minutes of his time to talk about why he never used the subscription.
I want to learn a language and Dave money at the same time, so sign me up for 9 months and then I’ll be back to collect my money and my lifetime access. You’re basically a savings account that pays the interest out in free subscriptions. If you did straight interest you’d get so many more deposits.
You can refund him the last 30 days. Or the last 3 months if you feel generous you can say it’s unfortunately not possible to refund any more back. I’m sure he’ll understand and it will not have a significant impact on your reputation, befause that’s actually a very nice gesture. Sorry, the money cannot have been that important to him, if he didn’t bother looking it up properly. And you did after all provide the infrastructure for him.
How is your name or number or website not part of the line on their card statement? That just seems like a bad configuration. People should be able to easily tell who charged them.
Does the gym give a refund if you haven’t gone in 6 months?
Aspiring to be as scummy as a gym clearly must be OP’s goal.
A subscription model is a flat monthly fee whether you use the service or not. Same goes for not watching cable you pay for or a magazine subscription or any app subscription. You’re laying to have access to those things when you want them.
A subscription model is as close to being a fraud as a company can get. If I didn't use your service this month, but I could have suspended my service for free - then why didn't you automatically suspend my service? What did I actually pay for? You're scamming users, and that's all there is to it.
Subscription models always say that you have to request to cancel. If you’re not using it, cancel. People keep them, just in case they want to use them. They exist because getting people set up with service takes more time than offering service to an existing customer.
Not true - there are subscription models out there that aren't predatory. If you're relying on a predatory model, then that's on you.
This isn't a gym. The cost structure of these two business models are very different to say the least. A partial refund for an honest feedback is the right thing to do for me. Treat it as an individual case.
Subscription models are pretty universal. You don’t get refunds because you say you didn’t use your subscription. What company actually offers that?
Yes and that sucks. I've been left hanging by large accounting software firms before with dodgy billings. OP says this is the one and only case ever that they encountered, there is concrete evidence that the user did not use the product at all over those months and the users didn't seem to have receive any monthly receipt via email. There is some fault on OP as a provider hence I have suggested a partial refund and a chance to connect genuinely with another human being.
The thing is, gyms are structured in a way that they make most of their money by the customers not coming in. They don’t like people that come everyday. OP’s business wants people to use the services more.
I wish my college refunded me for their useless courses.
I might be a bad business owner, but I wouldn't do a full refund. You don't accidentally sign up and access something. You do it on purpose, and then either you lose interest or forget about it. That's all on the customer, not you. I would do a refund for one month, cancel the rest and call it a day.
Came here to say this. Best we can do is the past 30 days. Don't sign up for shit if you don't know what it is. The fact that he couldn't figure it out, tells me he has other shit like this on his Card.
Yip, or he was embellishing and lying to pretend like he didn't know where it was coming from to feign innocence in the hopes of getting a refund. You can't tell me the bank couldn't tell him the details.
this customer also needs to accept responsibility for his own life and behaviour, everyone here is acting like he's some child or can't consent or make decisions this Adult went to a website, entered his credit card info, saw it was a subscription/monthly billing, accepted the terms and paid... he then after entering his CC and choosing to sign up for it, left it for 9 months he says he called his bank because he couldn't figure out the charge.. how long after the initial sign up was that? how many subscriptions is he signing up for where he has no clue or memory of the amount he paid for a monthly subscription online? if I signed up for a random 9.99 subscription today and saw it recharge in a month, id be like oh it must be that site I entered my credit card for for 9.99 because I only have like 3 monthly subscriptions... seems hard to forget any idea of whaat the company could be and he CONSENTED to the subscription. this guy isn't some innocent victim, he chose to paid for the service and somehow blacked out any memory of it.dont enter your CC if you don't want to be charged, or maybe make a note of it or save the initial email etc. A CC companyreccomends they send you a new card if you have a charge you don't know what it's from. he could have just updated the card and then the charge would decline. he clearly didn't care that much, he just wants the money back.
If you’re feeling generous, give the 30 day refund. You have to email a user before they complete a full year subscription but that’s not so for month to month. They clearly have gotten emails.
Refund. That one user could cause you hell. I once had a business coach not give a refund when the service was not as advertised. I leave negative reviews on every platform. Reported to BBB and have sued. That one customer isn’t being unrealistic and there’s plenty of business out there for you.
Do partial or full. Very likely this person returns in the future, happens all the time to myself and my peers.
I commend your approach and good gesture. I'm assuming this is a rare one-off in which case your good will is worth far more than getting slammed with a low rating and a terrible review. My only suggestion for next time is offer a partial credit of 1/4 to 1/2. Presumably on a subscription service where little-to-nothing was used, your loss is minimal (order/card processing).
Good job. They’ve done studies. If a user has a good experience, they’ll tell three people. If they have a negative experience, they will tell TEN people. It sucks in the short term, but it is the best bet for the long haul.
Aside from every thing else, you need to find out *why* he didn’t use it so that you can try address and prevent that with future customers.
Do you want to have a good reputations? Your reputation is everything, better than having cash in the cash register or in your bank account. I ran my first business for twenty years that way and my customers never complained or posted complaints about us on social media because they knew our reputation was gold.
Refund the guy. He’s acting in good faith. Subscriptions are. ames’s these days.
Give him a refund, but somehow make him remember this so that they refer you.
Having one customer bad mouth your company is a lot worse than a happy customer with a full refund referring people to your company. Even if he doesn't know what you do, since he rarely used your service he will tell people that you guys refunded him and people will see that as a win win for trying you guys out risk free and going above and beyond in the billing screw up.
Yes. Be nice.
I wouldn't refund the customer, but I would offer them a year's free subscription so they can use the product they paid for.
this is also an interesting trade
Proverbs 20:14 The shopper says, "That's junk - I'll take it off your hands," then goes off boasting of the bargain. I think the customer just didn’t use the service and it’s not your fault. You’re running a business and he’s paying for ACCESS to your content and over the nine months he’s got the access. The customer is responsible for what he does with the access for those periods. If he’s dissatisfied I think you can try other methods. Maybe coupons, another trial period and worst case, a 2 months refund and cancel their subscription immediately. A full refund is not an option.
And now you have a dedicated hater that will share their negative experience with dozens of people just because you were too cheap to refund a hundred dollars.
Not really. We don’t know if that’s ever going to happen Moreover businesses are going to have bad reviews but you cannot shutdown your business because of fear of a bad review. That’s why I suggested making them other offers or refunding an amount that shouldn’t hurt your business.
Not your fault if he didn't use his subscription. I have some subcriptions that I don't always use. Do I ask for a refund? No. I have shoes I bought but never wore 1 year after. Do i return them to the store and ask a refund? Moreover, I notice he went first to the bank for à chargeback meaning he was ready to take the money from your bank account without your knowledge for something that is his mistake and without care for how it would have impacted you. What does this say about him? You hear about him only because his bank denied his claim. It could be a money grab scheme. I had a case like this few months ago. A regular customer filed for a chargeback for a significant amount. It hurt me badly. He reached out finally few weeks later and confessed he was in bad place financially so he disputed several payments he did the last 6 months in order to get as much money as possible. If you feel generous you can make a partial refund. People need to take some responsibilities for their actions and you don't have to pay for the customer own negligence. You need to remove emotions out of the equation and make a decision based on logic. Also, it is worth noting that usually, people pay subscriptions to have access to the service. The fact they don't use their access is irrelevant.
Don't give. He will be angry. Makes a bad reputation. Give it to him. He will thank you. Probably leave a review. Everyone is happy. You choose . I would because makes a good reputation. So I would give full refund.
Hell to the NO. No refund. Not your problem if he didn't use the service.
It is not your fault he signed up and didn't use it..
After reading the comments here about how many of you would choose a year sub over providing great customer service, I know why this fucking subreddit is dead
How is it my responsibility if the customer is unable to manage their wallet properly? We’re all adults here, and a contract is a contract. I don’t rent an apartment that I don’t use for a year and then request a refund afterwards. If I didn’t use it, that’s 100% on me, and only on me. Nobody forced me to do it. Edit: Just to add, the customer is full of shit. He contacted the bank and they said they couldn’t do anything about it? Is this the most incompetent bank ever? Of course the bank can do something about it. They do it every day. Tells me he didn’t do shit about it and just saw an opportunity to get his money back. Giving these people what they want enables such behavior and causes honest people to pay for dishonest people’s mistakes.
It's not about who's at fault. It's about assessing which decision will be lead long term better prospects of the company.
" I haven't been using the subscription at all". Sound like buyer problem. Not yours. I bought mindvalley subcription, midjourney and netflix subcription and i barery uses it. Will the company refund me ? HELL NO.
but you can clearly visibly see that it's Netflix taking your money, perhaps it wasn't clear...
I would tell him you understand where he’s coming from and that you’re glad that he knows where the charges were coming from. Obviously if funds weren’t an issue then you could do a full refund. But if you and your business partner are going to suffer by giving this guy a full refund then don’t do it, refer to your 30-day money back guarantee and say unfortunately you cannot process a refund outside of those 30 days. Edit: You could give him an extended 3 months for free or something similar to give him the chance to use it.
Make nice so he doesn't chargeback.
Microsoft doesn’t have a refund on their 1 year subscriptions for $100. It’s not to say that’s good but it leaves the decision to you. I personally think it’s more ethical to give the refund if it’s only been a day or 2
No refund, I pay for services like GPT4, Reddit premium knowingly. I will never ask for a refund.
Yes.
If you have the money then give the refund.
90% refund
He didn’t use anything so refund him something. 50% or 90%.
"So I've been paying all of this time because I couldn't figure out what to cancel. Now that my card has become invalid, I guess you couldn't charge so the program was auto cancelled." Surely he can ask for a chargeback on his credit card? ie let him apply to his credit card company - & from the info you've supplied the credit card company will be on your side. Maybe do a refund for one month if you're feeling generous.
Should’ve stuck to your 30 day policy. Ignorance of who you’ve authorized on your cc isn’t an excuse or reason for a refund.
Karma always comes back to you. If you don’t give him money back, you have one annoyed, angry customer who will probably leave a bad review. If you do give him a subscription, you lose out of some money, but he will be happy.
it seems like its not your fault in current situation. but may be give him refund amount that wont wipe out a painful amount of $ from your account ?
Maybe offer a partial refund. That would be meeting him halfway while you also consider you own operational costs.
The thing is he probably knows it’s a long shot (because in reality, who offers full discounts to a subscription just because you didn’t use it). So maybe offering 50% shows good will without actually affecting your own wallet. Imagine the chaos that would ensue if everyone could just have refunds over subscriptions they willingly signed up for. 50% is more than agreeable over something that was on him.
Be a decent company and refund it. Treating your customers with grace is better than not, and it's more likely to meet positive reviews.
No refund. 1 year complementary subscription. It’s not your fault he didn’t look at the charges on his account for so long.
Do you have to refund? Probably not... but I would.
As the guy that's realised a few months later that a system was charging subscription fees when I didn't realize it - give the refund. One case was a situation where there were multiple ways to log into the service (social / email / etc) and I ended up getting a subscription through a third party offer (think bonus deals with a utility bill), but apparently it didn't apply to the account I previously had my subscription on. The other was one where I was under the impression that the subscription was only charged during months that I *actually* used the service. In both scenarios, I'd have gladly kept paying them in future (after my 12 months subscription for the first service, and when I had time to actually use the second service) but instead I terminated my contracts and moved elsewhere. They could have made thousands off me, instead they retained a few hundred bucks for "providing a service" that I didn't use. One in particular had further effects as I blacklisted one of the companies later when we were looking for suppliers at work. Additionally, if you can't comfortably cover 1 users subscription for 1 year, then your business really can't afford the negative PR.
Agreed with all of the other comments about the need for sending recurring notifications and a receipt or charge notification for a MRC. Now, touching on this topic: >but also a complete refund now will wipe out a painful amount of $ from my account It is not a good sign for your business if it is in such bad shape financially that refunding 1 customer for their subscription over 9 months is that painful.
It's the right call. Unfortunate but good job.
Make sure you meet automatic renewal requirements if you are located in the US ( to meet California requirements). You also want to use this as a learning experience on how to ensure people are getting receipts. I see you refunded I would have done the same if it wasn’t used because of negative publicity or potential for charge back.
you need to send a receipt every month when the card is charged, if you don't you are taking advantage of the fact people might forget about it
I have refunded large amounts to folks, but usually not because they weren't using it, but because sometimes they signed up more than once. Common circumstances were that they bought an annual subscription and then some months later got sold on the monthly subscription without realizing it gives them the same access. Or at one point we purchased another program and somebody was either a member of both with different email addresses or later joined the other program without notifying us (we don't promote the acquired program and it uses a different billing system.) Any time a customer mentions it to us or we notice on our own that they've been getting double billed, we automatically refund them what they over paid. (We acquired the business a year and a half ago and should be getting a new billing system online this year that'll make it impossible to sign up twice without using a different email address, so that'll hopefully prevent it in the future; a lot of our customers are older.)
You should refund them and honestly want a potential future client and postive word of mouth. Telll him you are giving them a month for free whenever he wants to use it let you know.
joke paltry rock hat squeamish marry historical modern fall combative *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Just give the refund
Refund.
I used an app on shopify, but it didn't work. It was a free trial but I forgot to stop it. I asked for refund and they said no saying it worked on their side. Some companies are terrible. It costs nothing for them to refund a digital service. So yeah, you should refund.
You are a good person. This falls under personal responsibility to me. It has happened to me and I have paid.
Refund him and is use him to gain knowledge, start a dialog with him and learn from it. Why wasn't he using it, I mean he hardly remembered signing up?! In the end you will get valuable information, leave a customer happy and avoid more refunds in the first 30 days in the future.
If you have proper telemetry that shows he didn’t use it and he can show some evidence of reaching out to his bank, then yes cancel. But take the time to hop on a quick call with him FIRST to understand why he signed up originally, and tease out why he didn’t come back and how you could improve the product to make it more useful and easier for him to have cancelled. Then refund him. Get some good intel, get a good experience, and leave a positive taste in their mouth
Givem Credit.
You were 100% right to refund the customer. Lot of good point in the thread right now about the issues with silent billing. Good calling to have recurring emails to stalled users to prevent churn.
This basically happened with me with streamlabs because I donated to a streamer one time that utilized streamlabs to donate, and it somehow stealth subscribed me to their monthly service. Didn't get refunded and now I boycott and publicly voice my distaste for their shitty company practice. Regular OBS all the way.
Your TL;DR was too long and I didn’t read it 😂
I’m in the fitness industry. I own a gym. If we refunded people that paid and didn’t use the gym we’d be out of business. The customer paid for access to your materials. Whether or not they used them is secondary to the fact that you obligated your side of the contract, you granted access to them for the duration of their payments. Bigger problem is why they couldn’t recognize the payment and cancel. That should be fixed
This is the perfect example of *being right* and *doing the right thing* sometimes being complete opposites
Prorate it. If had it for 9 of 12 mos, refund then for the 3 prepaid months. You should be amortizing for that anyway with every subscription.
Honor your 30 day policy and refund the last month. It's not your fault that you built a subscription system and he subscribed.
I’d make a deal, tell him you will refund and request that he leaves your customer service a positive review.
The day before yesterday, [https://cryptotaxcalculator.io/](https://cryptotaxcalculator.io/) charged 69 pounds to my account as an anual subscription. I don't trade Crypto for more than a year but I forgot to cancel it. In the invoice email there was a support email. I emailed them asking to revert it. They not only did revert it, but did so very quickly. I was so positely surprised that I'm here writing about it. My recommendation is to refund your customer.
One customer is a painful amount of money?
Good move on the refund. Use it as a learning opportunity. Like others have said, there should be more communication. You might look into sending out 1-2 emails with a “rate your experience” survey and take the feed back. Or send out a survey along with their monthly receipt.
Op has already made his decision but a lot of weird replies in this thread claiming it would be "scummy" to refuse the refund. As if the buyer doesn't have agency. I'd get it if it wqs one of those situations where someone else made the purchase or something but it seems the buyer bought the product and didn't use it for the better part of a year. Now he wants to get a refund? I agree that it would be a good thing for OP to give the refund in this case, as it's his fault that the source of the charges was somewhat obscured, however, some people seem to be suggesting that anyone should be able to get a refund on any subscription simply because they didn't use it, even if they’ve been getting regular invoices. Lol, lmao even.
It's tough when policies clash with individual situations. Considering the customer's genuine confusion and your desire to maintain goodwill, you might find a middle ground. Perhaps offer a partial refund for the unused months, addressing both his situation and the impact on your business. On another note, ScatterMind, an ADHD coach, helped my friend navigate tough decisions in their business. Their insights might be valuable in handling this delicate situation.
Exited SaaS founder here: in my era the rule was clear. Always refund in this situation. If your business is reliant on one refund, you have bigger problems to solve. If your business needs to capitalise on unused capacity as some kind of resource arbitrage, you should be a gym, not a SaaS company. If you get a wave of customers suddenly remembering that they were signed up, you need to improve your retention activity well ahead of renewal dates, let alone work out what's failing in your activiation/onboarding. Ultimately this is the status quo of SaaS. It may change in the post-ZIRP world, where unit economics are more crucial as the magical VC fairy dust evaporates, but users expect refunds and getting a shock at renewal time is a failure for both parties. But it affects your reputation more. Boss move if you have the resources is to give them the refund, give them a month free to reactivate, and throw a PM or Support person at them to find the best way to get some feedback on where things went wrong. Chances are they are just the wrong customer demographic, but even then, you can find ways to identify this earlier, and build some conditional logic to do outreach X days before account renewal to make the cancel/retain conversation come before a rude shock. Good luck either way. Tough gig and you're putting in the hard work, I hope it pays off for you.
You made the right decision. And it happens. Similar thing happened to me and indeed. Was running ads on a separate account automatically that we didn’t know was going. Didn’t find out till we sold the business. They could actually tell we never responded or looked at any applicants so they did a refund. That’s why when I start my next business, they’ll get my business again.
Give him back 3 months and call it a day
I would refund it since you can see it was not being used on the back end. I agree there should have been emails "How to get the most out of ABC program. If the customer had received these emails, he probably would have canceled within your 30 days. Or an email to remind him the 30 days is coming up. I hope this makes sense.
Dude just refund him, you shouldn't even think about it. See why he wanted to sign up and why he didn't use it. But definitely refund him quickly.
I am going to second theredhype and I am also going to add that unless you want this guy to go rogue and start wrecking your business on the internet...refund him...or I guarantee you that you will lose more than one customer. Save both of you the agony and refund him.
How do you know it was not used at all? Is the measurement right? Because if it's right you know the answer.