Sometimes the best and right thing to do is to give a customer a refund, but how your agents handle the process can make or break the customer’s experience and perception of your brand!
That’s why our Editor, Megan Jones, spoke to Dan Pratt, Isaac Hussain, Jamie Storer, Mark Evans, and Michel Stevens to capture their best advice on dealing with refunds in a consistent and positive way – covering everything from how to better support your agents to making life easier for customers.
Here’s what they said…
Take the Pressure Off Your Agents
Here are some key considerations to help take the pressure off your agents and remove unnecessary barriers:
Are Agent Targets Stopping Them From Doing What’s Best for Your Customers?
If your refunds process isn’t working as smoothly as you’d like, take a closer look at your KPIs and agent targets. You may find that agents are holding back from doing what’s right for your customers to protect their own interests.
For example, if they are restricted by the number of refunds they can issue each week, or have a bonus tied to the financial performance of the company.
You need to choose the right metrics for your contact centre agents. For advice on this, read our article: The Top 5 Agent Performance Metrics
Set Up a Clear Refunds Policy So Everyone Is on the Same Page
Do you have a refunds policy?
It can make a big difference to put one in place, as Jamie Storer, Sr Manager, Workforce Optimization at Columbia Sportswear Company, explains:
“It can be very difficult to manage refunds, because you’ve got to keep customers satisfied, and you’re trying to maintain a profit at the same time.
One of the best ways to overcome this is to have a clear policy in place outlining the refund criteria and procedure, so everyone knows what they’re doing and is on the same page. It’s all about consistency!”
Look for Opportunities Where Technology Can Take the Strain
Why not automate some of your refund process?
“If customers aren’t happy with the freshness of their food order, we give them the option to request a “no quibble” refund through an automated process, as it’s far easier for our agents and customers alike.
It only falls outside of this process if the refund goes over a certain threshold or appears unreasonable.” – Mark Evans, Senior Customer Operations Manager at Ocado Retail Ltd
Or look at where workflows can be set up to help agents make more consistent decisions.
“There are some excellent diallers and CRM solutions out there where workflows can be set up.
They’re normally able to isolate the order and you can run a qualification check to see if the customer is eligible for the refund.” – Isaac Hussain, Service Analytics and Problem Management Specialist at BT
When it comes to choosing your next technology investment you’re undoubtedly spoilt for choice. For advice on choosing what technology to buy next, read our article: What Tech Should You Buy Next? Here’s How to Choose
Make It Easy for Customers
It’s not just about making life easier for agents. You need to stop and think about what the smoothest journey looks like for your customers too:
Don’t Punish the Majority Based on the Behaviour of the Minority
When you drill into just how many refunds are actually challenged, investigated, and not issued for whatever reason, you’ll more than likely find that the majority of customers are acting in good faith with a genuine need for a refund, so always start the process with a positive outlook.
“We were able to overhaul our entire refund process and serve customers far more quickly when we asked ourselves ‘Why are we punishing 97% of customers when we know it’s only 3% of the cases that need more attention?’
We also saved money by trusting our customers up front, as it saved the very costly manual process of collecting and checking all faulty items from customers too. Too often, we get stuck in our processes and more often should ask ourselves ‘Why are we doing this?’” – Michel Stevens, Customer Experience Master (CXM)
“We try to be fair and reasonable with our refunds process and always trust the customer from the outset.
To manage this, we coach our team on how to handle refunds autonomously – with an escalations team on hand for when agents feel the situation needs further investigation, as sadly there are occasions where customers try to abuse our goodwill.” – Mark Evans
Don’t Make Customers Call In When You’ve Accidentally Overcharged Them
Take ownership of any mistakes and proactively give refunds out. Don’t wait for your customers to spot them and call your contact centre!
“In a previous role, there was a glitch with the system where we charged two months’ payments in one go.
Even though some people noticed and others didn’t, we automatically refunded everybody and sent out an email that explained what had happened, reassuring them their refund was on its way and there was no need to contact us.” – Dan Pratt, Founder & Director of DAP Consultancy
When you are aware of an issue, it’s in everyone’s best interests to take proactive steps to fix it – rather than wait for those disgruntled calls to inevitably come in and waste everyone’s time.
It’s time to to move away from reactive customer experience and deliver proactive CX instead. For advice on how to do this, read our article: Get Started With Proactive Customer Service
Don’t Drag the Process Out by Make Customers Jump Through Hoops
Make sure your refund process is simple and efficient.
“Your refund policy should be very clear and easy for everyone to understand. I’ve seen some companies that force customers to jump through hoops and it just leads to dissatisfaction. You’re not helping your cause or your brand like that! Just keep it super-simple and efficient, because once you start down the path of issuing a refund, there’s no need to drag it out – just get it done.” – Jamie Storer
Continuously Improve the Refund Experience
So once you’ve removed the initial barriers to customers and agents like, how do you empower your team to improve the customer experience when handling refunds?
Give Your Agents a Voice to Speak Up About What’s Working (and What’s Not!)
Empower your people with the voice and the confidence to tell you what’s wrong – because they’ll know what’s really happening on the frontline.
Involve your new recruits as well. Too often their voice is overlooked, but they can bring a fresh perspective.
You don’t want a whole team of people sitting there going “Oh, this doesn’t sound right, but I don’t dare say anything.”
For expert tips and strategies on how best to gather customer feedback from your frontline agents, read our article: Want Your Frontline Staff to Share More Customer Feedback? Try This!
Train Agents on How to Deliver “Empathy as a Service”
To take your refund process to the next level, train your agents on how to use empathy – following this 4-step process from Michel Stevens:
- Apologize Just Once – You don’t need to apologize throughout the conversation. If your agents keep doing it, they risk going into a negative spiral.
- Listen to Understand, Not to Reply – Train your agents to really listen to what your customers are saying and what they’re doing. This means not just listening to reply, but listening to understand, which is entirely different.
- Express Your Understanding – Next, agents should show empathy by expressing their understanding of the effects of the situation on the customer.
- Provide the Options That Are Available – Finally, they should provide the refund options that are available and resolve the matter.
Agents also need to take ownership of the situation to make customers feel reassured that their refund is being handled properly, as Dan Pratt explains:
“If a refund takes 3–5 days, the agent needs to manage the customer’s expectations and reassure them of the process. For example, by saying ‘I’ll call you on Tuesday to make sure it’s come through, and if it hasn’t come through, I will check for you.’ It’s all about giving the customer confidence.”
For advice on developing empathy in your teams, read our article: How to Develop Empathy as a Skill in Your Frontline Teams
Treat Refunds as an Opportunity – Not a Threat
Still seeing refunds as a threat to your customer experience? Here are some examples to make you think twice…
Neutralizing the Situation Isn’t Enough!
To truly rescue the situation, CX leaders must recognize that getting back to a neutral point in issuing the refund just isn’t enough. The customer still had a bad experience.
For example, if your flight was cancelled and you got your money back, you’re still worse off, as you still didn’t have the journey you initially paid for. This is where it can really help to think about what will not just get the customer back to neutral but also sweeten the deal on top!
This approach can pay dividends for long-term customer loyalty, as Dan Pratt explains:
“When goodwill gifts are issued to customers (for example, in the form of a £20 voucher to spend on a return visit), we typically found that, when these customers came back, they spent another £30 or £40 on top of that.
Not only that, but because the experience was good that second time, it helped us to prove ‘Look, we got it wrong last time, but this is how we normally do it’ – securing repeat business across the year.
By comparison, if they’d been given a straight-out refund, they’d have probably never come back again.”
And whilst it sounds more expensive in the short term, this seemingly more generous approach can also help to offset any potential reputational damage too, which is priceless!
If you are looking for ideas on the best goodwill gestures that can be used to build better customer relationships, read our article: Goodwill Gestures for Better Customer Relationships
Harness the Power of the Unexpected
A surprise gift of chocolates or flowers can also go a long way in winning the customer’s loyalty back.
“I worked in a pensions department where mistakes would have large financial implications for the customers. This department had a 9-month backlog on written replies (yes, this was 20 years ago, but also wow!).
The company parachuted in a troubleshooting manager to turn this around. He would speak to each customer on the phone and listen actively and empathetically while building rapport.
By the end of the conversation, he would have a good knowledge of the customer’s favourite wine or treats and be able to assure the customer that the issue would be resolved. He also had an account with a florist and other suppliers that would deliver chocolates and cards around the country.
He would then work to get the issue resolved, while arranging with one of his suppliers to send flowers or a favourite wine to the customer along with a personal note along the lines of ‘I’m sorry that you have had this issue. We are getting this resolved for you. You mentioned that you like chocolates, these are some of my favourites. I hope you enjoy them.’
We could be owing customers thousands of pounds, but this was an unexpected event for the customer and showed that he cared and listened. He was never asked for compensation and would only ever get ‘thank you’ responses.” – Jon Dainton, Head of Customer Service Operations, Fasthosts Internet Ltd
Sometimes going above and beyond what the customer expects can have a huge impact on perception. For advice on how to assess and exceed customer expectations, read our article: How to Manage and Exceed Customer Expectations – With Examples
Have You Heard About the “Service Recovery Paradox”?
Did you know? The Service Recovery Paradox says that customers actually become more satisfied with their experience with your brand when you resolve a problem they’ve had compared to if they’d never had any trouble at all.
As Michel Stevens says, “There are companies out there offering a poorer standard of product and service compared to some of their competitors, but because they handle customer refunds far better in their backend processes, the perception in the market is that they are an all-round better company to work with.
It’s a great example of the Service Recovery Paradox in action and shows the true power of handling refunds well!”
How You Handle Refunds Can Make or Break the Customer Experience
Handling customer refunds effectively is crucial for maintaining a positive customer experience and preserving your brand’s reputation.
However, there’s no single quick fix. It takes a multifaceted approach to remove unnecessary pressures on agents, make life simple for customers, and embrace goodwill gestures to transform dissatisfied customers into loyal advocates.
How Do You Handle Customer Refunds in Your Contact Centre?
Join our LinkedIn community to share your experiences.
With thanks to the following people for sharing their thoughts for this article:
- Dan Pratt, Founder & Director of DAP Consultancy
- Isaac Hussain, Service Analytics and Problem Management Specialist at BT
- Jamie Storer, Sr Manager, Workforce Optimization at Columbia Sportswear Company
- Mark Evans, Senior Customer Operations Manager at Ocado Retail Ltd
- Michel Stevens, Customer Experience Master (CXM)
If you are looking for more great advice on handling customer contacts and providing a top-notch service, read these articles next
- How to Handle Contacts From Challenging Customers
- The 5-Star Customer Service Skills Your Team Really Need
- Build a Customer Support Strategy That Shines
Author: Megan Jones
Reviewed by: Xander Freeman
Published On: 9th Dec 2024
Read more about - Customer Service Strategy, Customer Relationship Management (CRM), Customer Service, CX, Dan Pratt, Isaac Hussain, Jamie Storer, Jon Dainton, Mark Evans, Michel Stevens, Top Story
