Refund policy for SaaS

#1

Hey everyone!
Got a question.

SaaS, refund policy.

What it should be? What is the expected period for no questions refund policy?

Should I even have it?

If using Paddle – am I obligated to have a refund period?

Thanks a lot in advance!

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#2

Hey Kostja. I did a small research on this topic.
Most SaaS projects offer a 30 days ‘no strings attached’ refund.
I added this to my project too. I haven’t noticed the conversion boost because my volume is small. But I’m sure it has an effect.

None of the clients asked for a refund yet.

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#3

Hey Kostja,

I had tried applying a refund policy one year back and it didn’t work out. An alternate way I found out by experimenting was to offer a trial extension.

Why you should not offer a refund policy in my opinion is:

  1. Your payment charges will get increased. First, you pay a charge to your payment gateway when payment reflects and if you offer a refund then also you will have to pay the charge to your payment gateway.

  2. Prediction on revenue will not be accurate

  3. Sometimes users will get selfish and they will use your app for 30 days and get their work done and ask for a refund.

  4. If your users are getting what they want, then they really don’t care about refund policy :slight_smile:

Let me share a small story or experience of mine :slight_smile:

  • I was having a conversion with my potential customer and he has already completed his trial period of 14 days and he reached out to me with some sales questions.
  • After two days I reached out to him since he hasn’t upgraded his account and was inactive from the last two days, I shamelessly asked him what is stopping him to upgrade his account and he wants to try for some more days.
  • Then I informed him that we have a refund policy of 30 days. He said ok let me think.
  • Two days went no response from him and nor any activity
  • Again I proactively reached him and simple told him that what if I extend his trial for 7 days and I suddenly got a positive response.
  • After this, he tried for a couple of days and he added a card and became our yearly customer.

With the above experience, I concluded that users don’t want to put their card until they are convinced with the value they are getting.

I hope this helps. Sorry for the long response :wink:

#4

Hey, Utsav!

That is interesting.
I came up with a free plan that doesn’t allow custom domains and number of servers and apps allowed in Appliku.
So they can create many accounts if they want to, but there is not much they can benefit from.
No custom domains, means they will have to use our subdomain and this limits them in being ready for production usage, e.g. making money with their apps (you wouldn’t ask for money on a site on subdomain if a hosting, right?).
But with 1 app and 1 server you can test drive our service for as long as you want.
And no refund policy.

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