Consumer IQ

3 Times a Company Should Offer a Refund — Even If the Customer Isn’t Entitled to It

3 Times a Company Should Issue a Refund -- Even If the Customer Isn't Entitled to It :: Mint.com/blog

Last week, when I suggested that consumers should sometimes apologize to a company, a few of you thought I had completely lost it.

You believed I’d gone soft or turned into a corporate shill — or both — for suggesting that sometimes you should apologize to a business.

So today, in the interest of fairness, I’ll look at the flip side: when companies should offer a no-questions-asked refund on a product, even though they aren’t required to.

A recent study by researchers at the University of Vermont and the University of Iowa found that retailers with restrictive exchange policies may be losing potential business, a finding that should find some traction among highly competitive businesses.

Sadly, it’s less relevant in the industries where I do most of my work, which are dominated by a few large companies that don’t have to worry about you taking your business elsewhere.

This exercise probably won’t score any points with those of you who think rules are rules and must always be followed, no matter how inane or customer-hostile they are.

If you’re one of those by-the-book consumers, I will gladly take your comments at the end of this story.

The product didn’t live up to its implied warranty.

The word “nonrefundable” gets thrown around a lot in my line of work, but businesses are also fond of referring you to their restrictive contracts, which spell out exactly what you are and are not entitled to.

But there’s a space in between.

For example, the contract may offer an all-inclusive hotel, but the ad promises a vacation of a lifetime.

A hotel can meet its obligations but fail to deliver on its implied warranty, what its splashy TV ads want you to believe you’re getting.

Too often, I’ve seen companies weasel out of obligations that everyone understood, but which weren’t articulated in their contract — and that’s wrong.

In many cases, I’ve advocated for and received a full refund on behalf of customers.

When events beyond your control make it impossible to use the product.

Businesses often use “circumstances beyond our control” as an excuse to not perform a service.

Among my favorites: The mountain in the way of a cell phone tower or the flight delayed by air traffic.

Generally, consumers understand and are willing to give them a break.

It’s not that they have a choice — chances are, the companies have given themselves permission to do pretty much whatever they want in their terms and conditions. How clever.

But shouldn’t it go the other way, too?

For example, when you get a flat tire on the way to the airport, shouldn’t an airline rebook you on the next flight without charging you for a new ticket?

If the State Department issues a warning for your destination, shouldn’t the cruise line offer a refund?

In some cases, the answer is “yes” — and again, I’m not afraid to ask for an exception. Sometimes, customers deserve it.

When your personal circumstances warrant it.

Sometimes, compassion is just good business.

I’ve asked lots of companies to bend a rule when a customer had a death in the family or even a painful breakup (how do you get a refund on a honeymoon when the bride or groom walks away?).

Life happens, and when it does, a company should be willing to make some concessions, even when it isn’t required to.

I’ll never forget the Southern California furniture store from which I bought a living room set.

The sofa and dining room table were gorgeous. I was very happy with the purchase, and I also understood that I had 30 days to ask for a refund.

But 32 days later, my personal circumstances changed in a dramatic way, and I had to suddenly relocate to the East Coast.

The store didn’t have to take my furniture back, but it did. I’m grateful that it bent a rule for me, and I wouldn’t hesitate to recommend it to a friend or patronize it in the future.

That’s good service.

There’s a lot of wiggle room in here, of course.

What’s the implied warranty, for example? That’s subject to your interpretation.

What kind of circumstances should qualify for a waiver? Which ones shouldn’t?

That’s always an interesting debate, and that’s also why you need me.

I’m happy to make that call — and then call the company, if necessary.

Christopher Elliott is a consumer advocate who blogs about getting better customer service at On Your Side. Connect with him on Twitter and Facebook or send him your questions by email.