So, you just bought a shiny new widget and it’s great. You couldn’t be happier with your purchase. However, a couple weeks later you notice the widget is on sale – 50% off!
How do you feel? Do you expect to be refunded the difference?
Some of my good friends in the software business don’t think that’s a fair expectation.
If you purchased something for $100 last week, you did so because you believed that it was worth $100 to you. If it wasn’t, you would not have spent the money.
— From Adii’s article Promotional Leniency
If I purchased a product at full price and then it went on sale a month later, it would never cross my mind to ask for the difference back.
— Tweet from Jason Schuller
(check out the tweet page to see replies from plenty of others in agreement)
I’m not sure I agree.
Consumer expectation has been shaped by big retailer policies over the past several decades. Many will refund the difference for products purchased within 30 days of a sale.
In fact, some of them even promote their policy and encourage customers to take advantage of it. But why?
Last year, I bought a sofa for my office from Costco. It went on sale two weeks later for $500 off. I called Costco and they refunded the $500. No questions asked.
The thing is, I knew there was a good chance the sofa would go on sale in the near future. I also knew that Costco would refund the difference. So, I didn’t hesitate to purchase. I didn’t wait for the sofa to go on sale.
When a customer is considering purchasing your product, you don’t want them thinking that waiting for a sale is a good idea.
Now should always feel like the best time to buy.
Customers should be reassured that there’s no point in waiting. A low-price guarantee that offers to refund the difference of a promotion within 30 days of purchase is a great way to encourage customers to buy now rather than later.
Sure, a few will take advantage of the policy and request a refund of the difference, but I’d be surprised if a customer-friendly policy like this didn’t drive more sales and result in a net gain.
A while back, I read about a study on learned helplessness theory. People were asked to work while subjected to a distracting noise. One group of people had a button to temporarily turn off the noise. The other group did not. As you may have guessed, the people with the button performed much better. But the interesting bit is that they rarely pushed the button to turn off the noise. The fact that they could turn off the noise was enough.
This may apply here as well.
If a customer knows they can request a refund, they may be less bothered when a promotion appears after they’ve paid full price. It’s possible that promoting a low-price guarantee policy could actually reduce promotion-related refund requests.
At the very least it would be an interesting experiment.