035 - Boost Sales and Customer Trust with E-commerce Guarantee Secrets

Welcome to another episode of Women Powering eCommerce, where we dive into the world of female e-commerce entrepreneurs. In this episode, we're going to explore a critical aspect of running an online business: money-back guarantees. Join us on a journey through the highs and lows of implementing different guarantee policies and discover how these promises can make or break customer trust and loyalty.

Welcome to another episode of Women Powering eCommerce, where we dive into the world of female e-commerce entrepreneurs. In this episode, we're going to explore a critical aspect of running an online business: money-back guarantees. Join us on a journey through the highs and lows of implementing different guarantee policies and discover how these promises can make or break customer trust and loyalty.

Understanding the Need for Guarantees

When we first ventured into e-commerce, our approach was similar to the traditional health industry. Just like a drugstore where you can't return a purchased medication, we initially decided not to accept any returns. However, we soon realized that our customers, especially new ones, were looking for some level of assurance when buying from us.

Customers Seek Assurance

New customers, unfamiliar with our brand, craved a low-risk option. They wanted to know that if the product didn't meet their expectations, they had a safety net. So, we made the decision to introduce a one-year satisfaction guarantee, a move that was relatively uncommon at the time. This guarantee offered a full year for returns but with specific conditions: unopened bottles for a money-back guarantee and store credits for opened ones.

Balancing Generosity and Complexity

While our one-year guarantee seemed generous, it was laden with exceptions that led to customer confusion. We realized that the complexity of the policy was not serving our customers well. Despite clear details on our website and emails, many people didn't take the time to read and understand the policy.

The Shift to Simplicity

Recognizing the need for change, we simplified our guarantee policy to 60 days with no questions asked. We were initially concerned that this might lead to abuse and increased returns, but we believed in offering value and reducing risk for our customers. Surprisingly, we didn't experience a surge in returns; instead, the simplified policy led to greater clarity and reduced complaints.

The Benefits of Guarantees

So, why do guarantees work? We discovered several benefits:

  • Building Trust: Guarantees build trust with customers, making them more willing to try our products.
  • Risk Reduction: Guarantees reduce the perceived risk for customers, encouraging them to make their first purchase.
  • Customer Loyalty: Guarantees increase repeat purchases by assuring customers that we have their back.
  • Accountability: Guarantees remind us to uphold our promises, strengthening trust in our brand.

When Guarantees May Not Work

While guarantees offer many advantages, they can backfire if not implemented thoughtfully:

  • Confusing Terms: Complex terms can lead to negative reviews and customer dissatisfaction.
  • Market Saturation: Guarantees that were once differentiators may become industry standards, requiring constant innovation.

Tips for Effective Guarantees

To make guarantees effective:

  • Be Specific: Clearly state return conditions to avoid misunderstandings.
  • Make It Easy: Provide tools like online apps and guides to simplify the process.
  • Continuous Improvement: Gather data on returns to enhance products and services continually.


In summary, money-back guarantees can be game-changers for e-commerce businesses. They build trust, reduce risk for customers, and foster loyalty. However, they are not one-size-fits-all solutions and must be clear and straightforward to avoid confusion.

As an entrepreneur, it's essential to adapt and evolve your guarantee policies to meet the changing needs of your customers and the competitive landscape. Guarantees are not just a business practice; they are a promise you make to your customers, and it's crucial to live up to that promise.

Thank you for joining us in this episode of Women Powering eCommerce. If you found this information valuable, please share it with others, and don't forget to like, share, and comment on this video. Your support is instrumental in helping us inspire more women entrepreneurs in the e-commerce space. Stay tuned for more insights and inspiration to help you achieve your business goals.

Episode Transcription

035 - Boost Sales and Customer Trust with E-commerce Guarantee Secrets


Welcome to this episode of Women Powering eCommerce. Join me every Tuesday and Thursday as I take you behind the scenes of my journey as a female e-commerce entrepreneur. Together, we'll explore the highs, the lows, inspiring you to take action, and achieve your own business goals. So let's get started.


I want to talk today about money-back guarantees. So I feel that these guarantees come in all shapes and sizes, and I've actually personally tried different types at our e-commerce store, Zumalka, and I feel like sharing what I liked about them, what I didn't like, and just sharing with you those three types. There are many more, but I'll let you on the highs and lows of each.


So, at first, when we started e-commerce, we are in the health industry. So just like when you go to a drugstore pharmacy, if you buy a product or a medication, there is no guarantee on it. I mean, if you bought it, it's yours. You cannot return it. We went with that mentality when we first started the e-commerce. We just decided not to accept any returns. Technically, we could have continued with that way of thinking, and it would have been totally okay because that's still something that's done in the health and medical field, and many stores offer no guarantees, but we felt that our customers were requesting or asking for some type of a guarantee, especially the new customers because they don't know your brand. They're just ordering for the first time. So they just want to take a decision that's as low risk as possible, which makes sense, which makes sense.


So that's when we decided to switch to a really great guarantee. We had a one-year satisfaction guarantee. I mean, the plus sides. We were actually offering a full year of satisfaction guarantee. That's a very long time. I don't know a lot of companies... Well, maybe nowadays, we're talking a little bit more about that, but when we did that almost like 10 years ago, it's not something that you saw a lot. So we felt actually pretty proud. But since it was a full year, we want to make sure we prevented any abuse, so what we did is that we only offered money-back guaranteed on unopened bottles, in store credits on open bottles. So if someone had opened their bottle, used it, was not satisfied, they had a full year to just return it, and we would offer them a store credit, which I think was pretty fair.


If for any reason, we still kept the unopened bottle, money-back guarantee because we do deal with a lot of cancer pets. So sometimes what would happen is that they'd buy a product for their pet's cancer, and unfortunately, they didn't even have time to use it or open the bottle, and their pet passed away. So that was very sad, and we just wanted to make sure we at least had something planned out for those customers, so we kept that. But to be honest, it was a very confusing policy. It was a very generous one, I feel like, one full year, but there were a lot of exceptions in the end in that policy.


So the customers, in the end, weren't that satisfied with it because it resulted in a lot of complaints from not understanding the policy. Of course, everything was nicely detailed on our website and even in the emails, the return emails, but a lot of people don't read. So it has to be very like in bold, simple, only a few words long because if not, they're just not going to read. I'm not generalizing, but a lot of people tend not to. They'll zigzag through emails or any policies, so you have to be very clear with it.


So once we came to realize it was not really serving our customers in the end, we decided to just simplify our policy. We decided to bring it down to 60 days, but this time, it was a money-back guarantee. No questions asked. So I feel that's still pretty generous. We could have brought that down to 30 days, but we felt that since we're an e-commerce company and we ship worldwide, then some products can take a few weeks to get to their destination. If we're talking about the other side of the world, who knows, depending on the shipping they chose. So we felt that if we gave them just enough time to receive the product, give it a good 30 days to test it out, and then send it back, we felt that 60 days was definitely fair.


The struggle when deciding to go with that policy is that we were a little worried about implementing such a generous offer. I mean, 60 days, money-back guarantee. We thought that maybe that could generate a lot of returns and abuse, and we still decided to go with it because we really believed in the power of offering high value to our customers or new customers and just... We wanted to really lower the risks for them, and we just wanted the purchase to be a no-brainer for them. The results? Actually, we did not have more returns. We were quite surprised with that. So that was a really good news because it simplified the policy for customers. It simplified it for us, too. It just prevented us from having to explain our policy continuously to our customers. That was not a good sign. So it offered customers clarity, simplicity. Our complaints dropped about the policy or previous policy, so just less time spent on our return policy for the staff as well.


So that was a really great win-win situation in the end, and up till today, that's the policy that we have and use, and I think at least for now, that's the one we use and that we'll use, unless we find a better one that will even be more of a win-win situation for both our customers and our company. So, I don't know. Maybe you're rethinking your guarantee over, "Should I keep it as is? Should I change it?" Maybe you don't have one yet. What I've done, I've gathered a few points from my experience for you as to what they have done for us or what they haven't done for us, or previous policies, or current ones. So, here it is.


So, why do guarantees work? I found that, first, they build trust. So if I were to go, "Would I ever go back to no guarantees?" no. No matter the product, you cannot not have a guarantee no matter what field you are in, even in the health field, even if I had, I think, a drugstore online. I don't know. Of course, I don't want to speak for everyone in all businesses, but it's just so important. It just builds trust. The moment we introduced the 60-day money-back guarantee, I felt the atmosphere changed both for customers. They seemed more willing to take a chance with our products, knowing that they had a safety net in case it did not satisfy them, did not work for them, and just for our staff too. Also, definitely offers risk reduction, like I said. When we added our one-year satisfaction guarantee and our 60-day money-back guarantee, we just got direct feedback from several first-time buyers saying that this guarantee made them feel secure enough to make their first purchase or their second purchase or more. So definitely helped reduce the risk on their side.


Another advantage is customer loyalty. I mean, it's simple. It just helps increase repeat purchases. It just helps customers want to come back because they know you've got their back in case something doesn't work out for them. Lastly, accountability. Having a guarantee is a constant reminder that we have to live up to the promises that we make to our customers. So I think that just, again, builds more trust towards our customers, but it just makes sure that we deliver our promises as a brand. So, yes, definitely one of the good things about guarantees.


When may they not work? Well, from what I said again, if you have confusing terms like we had in the beginning with our one-year guarantee, we had some fine print that confused customers, so that led to some negative reviews which, in the end, were not a good thing. So when we switched to the simple 60-day money-back guarantee, so no fine print, it made a big difference. Also, about your competition. Many competitors now offer similar guarantees. So what used to be a differentiator when we first started our business 10 years ago with our one-year satisfaction guarantee, for example, it is not a differentiator anymore because now, many companies will offer similar guarantees. So what I've realized is that I don't want to implement a guarantee just to differentiate our company, I feel. Unless it's really out of the box, then do that or I would do it, but now it's not part of what differentiates us. I think it's now just a must-have, and it has to be a good one, and that's it. That's just part of what needs to be done.


All right. So, now, I want to share with you what I've learned in making a guarantee effective, how I've learned to make a guarantee effective. So, first of all, I have to be specific. I revised our guarantee to be more specific, stating exactly what conditions had to be met for return. So that is very important. You want to make it easy, too. We introduced an online app and a step-by-step guide for using the guarantee, making it hassle-free as possible. So that really helped us, and I would just add to that maybe continuous improvement. We still constantly gather data on why returns happen and work those insights back into improving our product, our service. It's been very helpful over the years, so that's definitely something I don't want to close my eyes on. We have a good guarantee now, but we might have a better one in the future, and I think that's important, just to embrace change and look out for new ways of improving your business.


So, in summary, my experience with guarantees and brand promises has been a very enlightening journey. They can truly be game-changers if you manage those correctly. Like we've seen, they can build trust, they reduce risks for your customers, and they actually create loyal customers in the end. However, however, they are probably definitely not a one-size-fits-all and can backfire if you don't think them out thoughtfully. It did for us with our one-year satisfaction guarantee. So I just like to go with as clear and simple as possible.


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