Make Sure Your Guarantee Makes Sense (Many Don’t)

A number of publishers offer lifetime guarantees. They permit the subscriber to cancel at any time and receive a prorated refund on “unmailed issues.” But if you offer both a bill-me option as well as payment-with-order, such a lifetime guarantee actually gives the customer an incentive NOT to pay up front.

Say the customer checks the “bill-me” option for a monthly magazine, gets his first issue, and then writes “cancel” on his invoice. The publisher doesn’t send him a bill for one issue, nor does the publisher ask for the magazine back. So the customer gets a free issue.

But if the customer pays in advance, then cancels after the first issue, he gets a refund for 11/12th of the subscription price (the 11 unmailed issues) and therefore ends up paying for the issue received.

Why should the bill-me customer get a free issue, but not the payment-with-order customer? It doesn’t make sense, considering a cash-with-order customer is more desirable than a bill-me order.

Solution: Offer a full money back guarantee within the first 30 days, then prorated refund thereafter.