It may be an afterthought for many service providers, but upgrading the refund process has clear benefits — from cost savings to positive consumer reviews.
In Part 1 of our series on customers’ expectations and outcomes surrounding the credit balance refund experience, we unveiled consumer preferences for speed, choice, and digital communications. 48 percent of survey respondents wanted digital refunds, and the majority asked for features that digital payments excel at delivering — like improved funding speed.
Our report revealed that not only did refunds matter, but customers’ preferences for digital payments aligned with service providers’ goals of reducing the costs of issuing payments. What’s more, a positive refund experience was connected to winback and other desirable outcomes.
But could the refund experience really set service providers apart from the crowd?
In sectors that have undergone deregulation, like utilities, customers have their choice of provider and can switch to get a better price or experience. By the same token, customers often switch back to a former provider.
In our survey, over 61 percent of respondents said they’d gone back to a service provider they’d used in the past. Again, price was the biggest driver of this decision. But, consumers also said their exiting experience played a role, with 82 percent of respondents saying the credit balance refund was “somewhat,” “very,” or “extremely” important in the choice to go back.
This points to exiting and returning customers as part of an ecosystem where loyalty is fluid and decisions to leave aren’t final. In other words, it doesn’t have to be a bad thing when customers move around, especially if you keep the door open via a positive exiting experience.
If changing customer loyalty behaviors lead to an increase in exiting and returning customers, what does that mean for service providers that want to lower the costs of issuing refunds?
Some providers, amid controversy, have changed their policies in favor of not offering refunds, at all. By refusing to offer pro-rata repayment for unused services (where laws permit), companies may save money — but at what long-term cost?
Digital payments offer a better alternative, by allowing providers to streamline their refunds and reduce issuing expenses. So, instead of paying as much as $12 per refund check, companies could issue a digital refund that costs less than $1.
This reduces hassle and expense for service providers while delivering a frictionless experience customers will remember the next time they shop around for a provider. Again, today’s notion of loyalty includes returning to former service providers when the deal is right. Digital refunds can help you send customers off with zero negative baggage, while ensuring the process is time- and cost-efficient for you.
It’s not only customers’ personal experiences that matter when they choose a provider. The opinions of friends and strangers, alike, factor into consumer choices, with 86 percent of consumers saying they read reviews for local businesses. Another 57 percent only do business with companies that have four or more stars.
But you may be surprised to learn that less than 1 percent of customers actually write reviews, according to a recent study. That means a tiny minority of your customers have a very public voice about your brand. Most are motivated to review your services because their experiences fell on either end of the spectrum: they were extremely satisfied or extremely dissatisfied.
For service providers that regularly issue credit balance refunds, it’s important to note that refunds are often trigger events for social sharing — like leaving a formal online review or simply telling friends and family about the experience. Consumers had roughly the same likelihood of sharing a negative experience as a positive one, meaning a better refund could tip the scales in your favor.
At the end of the day, a refund can be so much more than another administrative task. It’s a chance to flip a less-than-ideal customer service scenario into a share-worthy story, while streamlining your payment process to maximize efficiency at every level.
For the full 2019 Credit Balance Refund report, download your free copy of Destination: Digital Refund.