It’s time to reframe refunds as an opportunity, not an inconvenience. In Wirecard’s 2019 Credit Balance Refund Survey, we discovered that customers care about the refund process and even factor in this experience when they consider going back to a former service provider.
In Part 1 of our two-part series on reclaiming the refund as a competitive advantage, we examined how a better refund could help utility companies stand out from the pack and, surprisingly, reclaim customer loyalty. In Part 2, we’ll explore how giving your credit balance refunds a makeover is both a way to reduce costs and inefficiencies for you, and an opportunity to give consumers the upgraded experience they deserve.
The Cost Advantages of Customer Service
If you’re like most utilities and service providers, refunds are the backyard to your customer service philosophy. They’re not as visible as what happens in the front yard, like accepting customer payments and ensuring your services meet high standards. So, why bother with landscaping?
In fact, the credit balance refund is part of a bigger picture.
Customers may be owed a refund for any number of reasons, like overpayment on an account. So, they’re not always collecting a refund on the way out the door. And, they want what’s owed to them as quickly and efficiently as possible — just as they expect to enjoy fast internet or timely HVAC servicing. Digital refunds deliver on those desires, affirming customers’ needs and preferences while upholding your brand values.
While industry axioms about the value of customer retention abound, it’s hard to quantify the value of customer service. That said, there is evidence that better customer care may lead to lower costs and reduce churn for transactional and subscription-based services.
What is easier to name is the cost of giving customers what they want. In fact, it’s less expensive than maintaining clunky legacy methods, given the high costs of issuing checks – not to mention downstream support implications, like customer service and escheatment. As demographics change, values shift, and digital payment processes overtake checks, upgrading your refund process based on consumer preferences will become not only more cost-effective, but an economic and competitive necessity.
A Shift Toward Seamless
From our credit balance refund survey, we extracted a familiar snapshot of today’s consumer: busy, digitally savvy, and in search of ways to make life easier. When a customer is owed a refund for a utility or other service, it’s far from the most important thing on their plate. So, that makes it all the more critical for the refund to be seamless at every step.
Nearly half of our survey respondents preferred digital payments (like virtual open loop cards and ACH) over traditional payment methods, like checks. Beyond that, customers wanted to receive communications about their refunds electronically, not by snail mail. 59 percent said email was their preferred method, while 22 percent preferred text messages. This points to the demand for a customer journey that remains in the digital realm from start to finish.
The Implicit Need for Digital
Not all customers claimed to prefer digital payments, but most made one thing clear: speed matters. 76 percent of customers expected their refunds within no more than one week. And at their fastest, digital payments like a virtual open-loop card can meet customer expectations 100 percent of the time — even for the 13 percent who expected to receive their refunds in one day or less. By contrast, checks met the expectations of less than 24 percent of consumers.
Another customer value that points to the need for a digital solution is choice. About 73 percent of customers “somewhat” or “strongly” agreed that receiving their choice of payment method would make the refund experience better. Digitizing payments is a way to support diverse payment preferences while keeping the start of the journey the same for everyone: a convenient digital touchpoint where customers can select how to receive their refunds.
In summation, the refund experience is more than just an inconvenient necessity. It’s a chance to bring innovative technologies into play while delivering on changing customer values. All this actually comes with cost savings and improvements to operational efficiencies, pointing to digital transformation as the clear way forward.
For the full 2019 Credit Balance Refund report, download your free copy of Destination: Digital Refund.