Money-back guarantees exist widely online. Almost every sales website you look at has some kind of “badge” showing you that if you are not satisfied you can get your money-back, no questions asked. Indeed, under current legislation in the UK, for instance, you are required to offer either a 7-day money-back guarantee or three-months plus seven days, depending on specific circumstances. Similar laws exist in many countries around the world, so it is no surprise that you see these badges showing “30-days guarantee” for example.
But is a “1–month” guarantee any better than a “30-day” one? Or is a “365-day money back” offer better than a “1-year” money back offer? We can use different numbers to signal the same things,; so which kind of numbers should we use to help increase the likelihood of sales in the first place? Consumer research has looked into this and the results might surprise you.
When people were offered mobile phones with a 731-day guarantee they were less impressed than when the same phones were offered for sale with a 2-year guarantee, even though these are the same thing. Two things are apparent from this research. Firstly, people need to have guarantees and money-back offers expressed in numbers they are used to. Few mobile phones are offered with a 365-day guarantee, for instance, but many are sold with a 1-year guarantee. Secondly, the research shows that people prefer small numbers when being given guarantees.
Online this means that a “3-month” guarantee is much more likely to attract buyers than a “90-day” one. You will find many internet marketers arguing that the bigger the number, the better. Their view is that big numbers impress and that people are bound to buy if they think they can use your product for 90 days before deciding whether or not to keep it. However, the research data are not on the side of people who argue this case. The research points towards smaller numbers being more preferable than bigger ones.
That means having a “1 month” guarantee instead of a 30-day one, or a “1 week” money back offer instead of a seven day one. Whatever the length of the guarantee you are offering you are going to get more sales if you choose the lowest number AND if that number is what people are used to. People are much more used to a 1-year guarantee than a 365-day one, which is handy because the 1-year is the smaller numebr!