How to Create a Refund Policy for Your WordPress Business

Posted on February 10, 2018 by in Tips & Tricks 3 Comments

How to Create a Refund Policy for Your WordPress Business
Blog / Tips & Tricks / How to Create a Refund Policy for Your WordPress Business

Your product is awesome. It’s the Next Big Thing. You know it, and pretty soon, your customers will know it. So you go live and launch the product. It’s a hit, and you just keep refreshing the page to see the numbers climb. And then it happens — your support inbox gets hit with the dreaded refund request.

It happens. As awesome as your products are, folks are going to not be satisfied, are going to use it once and request their money back, or honestly have bugs that keep them from using it well. That’s life as a developer or creator in any field. It’s heartbreaking, but it happens.

The big question then is, how do you create a refund policy that not only protects you, but is also fair to your customers?

What Will You Be Refunding?

Figuring out what kind of WordPress refund policy you should offer isn’t necessarily simple. The breadth of ways to make money with WordPress is astounding, and there’s no way we can cover every potential situation, so we’ll focus in on a handful of the most common.

You may sell…

  • a service (custom web design, custom plugins, monthly maintenance, etc.)
  • software as a service, or SaaS (like Divi)
  • freemium software (such as GiveWP or WooCommerce–a free plugin with premium addons)
  • premium software (such as CodeBard’s Patreon Plugin Pro or WP Rocket)

Each of these business models comes with its own benefits and pitfalls, and not one single refund policy will work for each one.

What Should You Include In Your WordPress Refund Policy?

Once you know that, there are 3 criteria you should probably be most conscious of.

  • What constitutes getting a refund? Does it have to not work or cause problems? No questions asked? What about if your company goes kaput, do they get a refund?
  • How much of a refund will they get? Full or partial? Will it be prorated by time or credits?
  • How do they ask for a refund? Can they use your website? Do they put in a ticket, live chat, or email your support team? Or is it automated?

It does depend a lot on what you’re selling, though, before you can totally write your policy, so let’s see some examples and scenarios.

Using WordPress to Sell a Service

This is a weird one. I don’t actually find that a lot of designers or custom plugin developers have a refund policy. They often have a structured payment plan and a cancellation policy, but in terms of refunds…nada.

If this is your bread-and-butter, the general take on it is to take a non-refundable deposit up front, but have milestones during the project that a client must pay for before moving forward. I have seen page-by-page or by category (page design, page creation, copy writing, etc.). If they need to cancel, they only pay for what work you’ve done.

These refund policies tend to be fair for both the client and the designer/developer, too, as they’re protective, not punitive. That said, you can always be ultra-confident in your work and offer full-refunds if they’re not satisfied (or a certain number of revisions/redesigns).

Software as a Service (SaaS)

When you’re working with a SaaS product, things can get a little sticky. Because you’re always updating, always changing, always working on the product, it’s a kind of fluid business. Divi, for instance, is more of a service than a piece of software. We offer a membership to Elegant Themes — we don’t actually sell you Divi. We sell you the whole suite of stuff that we offer: amazing support, a great community, Divi, Extra, Monarch, Bloom, and oodles of other themes that have been released over the years. You can join up for a year or your whole lifetime.

And you know what our refund policy is? Awesome. That’s what it is.

wordpress refund policy from divi

If you’re doing SaaS, a time-period based guarantee is probably your best bet. Not because we use it, no. But because it’s utterly and completely fair to your users. You give them enough time to get real-world experience with your products and see if they’re a good fit for them.

Additionally, you could offer no refunds on payments, but break your services into smaller chunks — generally month-to-month — so that their membership can be evaluated in the same way as they can with a 30-day Money Back Guarantee like ours. When they cancel, they have access to your SaaS offerings (updates, licenses, support) until their paid time runs out, similarly to how ET members re-up their memberships annually.

Freemium Software

Freemium software is a really interesting business model: your main piece of software is totally free to download and use. Look at WooCommerce: you can install the plugin from the repo and with just a few clicks start selling your stuff. If you want advanced functionality, though, that’ll cost you. It’s not quite premium (buy the whole software with all functionality included), but it’s not totally free, either.

But coming up with a good, WordPress refund policy for your freemium software can be a little confuzzling because you don’t generally do timed memberships, but instead sell licenses to the add-ons and extensions. Since it’s a hybrid, piecemeal business model, that would be your best take on a refund policy.

For instance, GiveWP sells add-ons individually and offers a “a full refund within 30 days of purchase no questions asked” with each one. They also give (heh heh) the same refund for their bundles of add-ons, too.

But by being freemium and piecemeal, the user gets a lot more flexibility with how they interact with the company and the products (for instance, they can stagger your refund periods with purchasing different add-ons as they need them, instead of having just 30 days to test and implement each and every one.)

This kind of WordPress refund policy works well, too, for freemium services, not just freemium software. Just replace each add-on purchase or bundle with additional features or membership levels/time periods.

Premium Software

And then, there are those WordPress software companies that are straight-up software companies. Instead of selling a license to a product or support or extensions, you buy whole, fully-featured doodads and geegaws right from the source. No fuss, no muss.

But that opens a whole slew of issues for their return policies, too.

Here’s the thing about premium software and WordPress refund policies: they’re digital. So if you have a pretty lenient return policy (like the Zappos 365 day, no-matter-what returns), you could potentially lose a lot of revenue. Someone buys the software, installs it, then gets a refund. They forever have your software downloaded, and you get zero moneys.

A lot of premium themes and plugins do offer a full refund policy. However, the real difference in these is that they are often very time-sensitive. Many premium software companies only have a 7-day period for new users, with others opting for 14 (though some do go for 30).

In order to prevent misuse and abuse, many publishers link updates and support with license keys. They may have no way to prevent users who get refunds from keeping and (unethically) using the software, the company can limit and prevent updates/support.

That way, while users may continue to use it, they will miss out on new features you add, not have access to help beyond Google and Stack Overflow, and the software will eventually be deprecated as new versions of WordPress are released.

The Key to a WordPress Refund Policy

In the end, setting up the right policy is finding a balance between your needs as a creator and your users’ needs. You not only want to be fair to them, but also to yourself and your team.

In some cases, no refunds at all works great (like if you’re a designer or developer whose product is a service and a service alone). People may not think a thing about it and happily buy from you.

But for others, saying you don’t offer refunds isn’t fair to them. Sometimes there are plugin conflicts, or your stuff won’t work with their host. Just remember: this is the internet, and people who feel spurned tell other people about it way more often than they tell people when they’re happy.

Which is why having a solid and fair refund policy is a major factor to business success with WordPress.

What are your refund policies, and what made you choose what you did?

Article thumbnail image by stickerama /

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  1. The last paragraph sums it up perfectly. Good artilce Mr. Keeton.

    I am a numbers guy so I would have liked to have seen some statistics. For example, I bet that 5% of purchases are from people that intend to get a refund before they try the product or even purchase it. We might add in ~15% for refunds in general due to the issues you describe: incompatibility, workflow issues, etc. So then we have 20% that are seeking refund. This is probably dramatically high but the point is that you could then say that you need to be profitable from 80% of your sales rather than 100%.

  2. Thank you. This is a very important topic for businesses to get right.
    I wouldn’t have tried Divi without the 30-day guarantee. And after 3 weeks I was ready for the lifetime license!

    I also think dealing with cancellations for service providers is also an important aspect of this issue, as one’s time is involved.

    I have many hats, but I basically run a consulting service. I have to do approximately 1.5 days’ prep before I see a client for the first time. So I secure a 50% deposit before I begin.
    I have a basic Privacy/T&C page on my site (also as an on-boarding pdf download) that has to be read first and agreed to (at the end of my Typeform booking form: and another handy link is there to the T&C page).

    If a client cancels the session within 1 day before the session, the deposit is forfeited, as I have already done the prep work and lost the consulting day for another client.
    But if the cancellation is within 2 to 3 days of the session, the deposit is still not refundable, but is transferable: the client can reschedule the session, or transfer it to a friend, etc, or a different service or products I offer.
    And if cancelling outside the 3-day limit for any reason, I refund the deposit — as my wise mother used to tell me: “Your reputation is worth more than money in the bank”.

    Of course, if someone’s house was to burn down the day before the session, I would give them a refund! Being a solopreneur, I have that option.

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