Refunds get spent like free money
Research confirms what you may already know to be true.
People are more likely to spend refunded money.
Let’s say you return a $100 jacket. According to Yu, Cryder and LeBoeuf (2024) you are more likely to spend that $100 refund on a discretionary purchase than if you’d received the same amount as either income, an unexpected windfall or even a tax refund.
That’s because the money has already been designated as ‘spent’.
It feels like free money...
Money back is better than a refund
Giving a customer money back is better than a refund.
The more concrete your language, saying “money back” instead of “refund”, for example, the more likely it is you will increase customer satisfaction.
Same with delivering “to your door” rather than “house”, referring to the “navy blue polo” rather than “the top”, and “fixing” rather than “solving” a problem.
Concrete language reduces...
