In my opinion, there is no contest here. After over 11 years of being in business, I believe that guarantees are essential, for the following 3 reasons.

1. It’s A Question of Business Ethics…

While there certainly are dishonest people who will take advantage of your guarantees, the majority of people, in my experience, are good and decent and have genuine reasons for requesting refunds. Think about it, wouldn’t you rather those customers were talking to YOU, giving you suggestions to improve your product and service, than running around all over town bad-mouthing you? It’s been shown over and over, that a complaining customer who gets their problem resolved, is actually MORE loyal than a customer who never had a problem in the first place. So just from the point of customer relationship, you MUST offer a guarantee.

2. The Extra Sales You Generate Far Outweigh The % Of Returns

Many business fortunes have been built (and resurrected) on the strength of guarantees. Lee Iacocca turned around Chrysler when he said ‘If you want to know who builds them better, take a look at who guarantees them longer.’ I know what you’re thinking. That’s a big car company and has no relevance to you as a small business owner? Not so. Whatever business you are in, offering a big, bold guarantee inspires confidence.
A guarantee is your way of saying to your customers, ‘I’ll take the risk’. For a hesitant prospect, the guarantee can be the deciding factor that finally nudges them into action. I know you might be concerned about people ‘taking advantage’, and the truth is, there are a couple of low-lives out there who will. But ultimately the extra sales you will make will far outweigh the number of returns (genuine or not).

3. If YOU Can’t Stand Behind Your Product Or Service, Then Who Can?

If you are selling a product or service that you cannot strongly and fairly guarantee, then maybe you should find something better to sell. Even if you are in a situation where results are dependent upon the client, you can find something to guarantee eg ‘If you complete all the assignments, turn up to all the sessions and STILL don’t get the promised results, then it’s free.’
Even if you are selling something where the results CANNOT be easily predicted because there are so many variables, you can find SOMETHING to guarantee eg ‘you’ll never be kept waiting more than 10 minutes for your appointment’, ‘if at the end of the one hour session you don’t feel like you’ve just had a weekend away, then it’s free.’

The bottom line is guarantees WORK, and if you aren’t using them in your business, you are almost certainly missing out on sales and opportunities, So what are you waiting for? Go guarantee something!