How to Address Customer Returns and Cancellations: 11 Expert Strategies

When someone wants to return a product or cancel a service, how should you respond? Experts share how they handle returns and cancellations.

Updated September 9, 2020



When someone wants to return a product or cancel a service, how does your business respond? How do you increase the chances of winning them back?

To keep your business healthy, you need to reduce returns and cancellations. It’s important to have  a framework for fighting churn and learn why customers aren’t satisfied with your product or service. But what churn-reducing strategies can apply to your business? We asked experts across all industries, and came up with 11 proven strategies.

return policy


To help you win customers back when they are about to churn (or have already churned), experts offered these tips:

1. Check in on how you can make the situation right

Greg Brookes of Kettlebells Workout tells us, “Ask the dissatisfied customer what you can do to make it right. Sometimes, being direct is the best way to show that you’re serious about keeping them as a customer. Agree to their terms whenever possible, even if it means a momentary loss in revenue. Keeping them as a happy customer in the long run will more than make up for it.”

Carrie McKeegan of Greenback Expat Tax Services advises, “Explain what benefits they can see from staying with your services, rather than going to the competitors. Find out exactly what went wrong, and explain immediately how you can rectify the situation. Remember they are already familiar with your service, so it makes more sense to fix the problem, rather than start from scratch.”

2. Listen to why customers want to churn, and use this information to personally win them back

Tim Denman of ServGrow shares, “If a client wants to return the product, it means that for some reason, they are already dissatisfied and perhaps, annoyed. Now is not the time to impose anything on them. Instead, take measures to prevent getting any negative public feedback from them. Make sure that the return / unsubscribe process is as quick and straightforward as possible.

“It’s crucial to allow cancelled customers to speak out about what they did not like, and use what you learn as a way to improve your offerings. Depending on the issues you learn about during cancellation conversations, strive to return those customers by offering them a more suitable product or service to meet their needs.”

David Garcia of ScoutLogic says, “Seek to learn. If you are genuinely listening and trying to understand what went wrong, you may still be able to offer something that could retain the client. Even if you don’t retain the client, you may learn something about your business which you can fix to prevent additional cancellations.”

Samantha Story-Camp of Pip & Lola’s Everything Homemade tells us, “We open up the lines of communication. Too often it seems that as businesses, we talk at our customers rather than to them. To us, customers are like family. We would not be here doing well if it weren’t for our loyal customers. If someone is unhappy, we find out why and see if there is anything we can do to fix it. Not because of the potential loss of revenue, but because we want them to be happy with us and our products.”

Andrea Loubier of Mailbird recommends, “Often, customers would simply like to be heard and know that their comments are taken seriously. So, listen without making excuses. Explain how sorry you are that their experience has been less than satisfactory. At this point, if the situation is deserving, offer a free upgrade or additional feature. Not only will this help to retain them as a customer, but it may even encourage them to continue with the upgrade at the end of the term.”

3. Use a formula to learn why customers made the return

Ethan Taub of Goalry shares, “We always ask customers to be completely honest, and we admit to any issues we are having with that particular problem. Our key question after that is: ‘What would convince you not to cancel today and try for another month? If after that month you still wanted to leave, then we would refund you that month.’ They have nothing to lose by staying another month, and this gives us the impetus to solve their problem and go above and beyond in the next 30 days.”

Adam Green of Currantweb recommends, “Listening to your customers and taking action accordingly plays a big part in retaining them. With the customers I’ve personally dealt with that are wishing to leave, I will tend to ask three questions:

  •  May I ask why?
  •  Is there anything we can do to help resolve the issue?
  •  What could be added to your website to prevent you from leaving?

“With this information, we can work out what the issue is. If the customer has received bad customer service, we may offer a gesture of goodwill. If it’s relating to their website, we will work with the customer to apply any changes needed.”

Sunny Ashley of Autoshopinvoice tells us, “We send a one-to-one email asking for specific feedback on the reason for cancellation. Customers cancel for a number of reasons, i.e. lack of budget, lack of adoption, or product/feature complaints. If the decision to cancel is money-related, we can always discuss price discounting as a last resort. If the issue is related to adoption or lack of features, then digging into the core issue will often help the customer discover a previously-unknown functionality they’ll be able to use.

“Digging into the ‘why’ behind a cancellation request increases the chances that a customer learns the full value of our product. In a worst-case scenario, the customer cancels and we as a company receive valuable feedback on how to better improve.”

Tom De Spiegelaere of Tom Spicky says, “When a customer wants to cancel my services, they may simply want to switch to another service, or they may have had a bad experience. Whatever the reason, I don’t make excuses. I just need to know the reason for the cancellation. I send an email that says I’m sad to see them go, followed by an open-ended question asking them what went wrong. Aside from the fact that it displays concern for the customer’s experience, I also get actionable feedback to see the areas for improvement.”

4. Offer alternative options that better fit the customer’s needs

Timothy Courchaine of Local Spark Marketing explains, “Well, Plan A is to avoid the canceling scenario entirely by providing great service and building strong relationships. But, when it does get to this point, our goal is to truly understand why they want to cancel. Is it an issue of cost? Something not functioning correctly? Expectations outstripping reality? In many cases, we can find a more appropriate service plan rather than losing the client outright.”

Chane Steiner of Crediful advises, “When someone wants to return a product or service, don’t fight them too hard on it. Companies that make returns overly difficult are typically an annoyance for customers, and they’ll remember that inconvenience if they ever consider buying from you again in the future.

“Rather, try to make the process as easy as possible for the customer, while also recommending some of your company’s other options and deals. This is also a great time to ask for feedback (in the form of surveys) from customers on why they’re returning your product. If it’s the high price, recommend a cheaper option you also offer. If it’s the overall quality or a feature of the product, use the feedback to improve your product, which will improve the experience and help to retain other customers.”

Chad Hill of Hill and Ponton Law says, “The first step is to send an apology email to the client stating that we regret having them return or cancel the products they acquired. The second is to ask the client if they want a replacement, whether in the same line of product or a different one, and provide them with a product they desire. By doing that, the client will be confident enough to purchase again next time.”

Aaron LeBauer of LeBauer Consulting says, “When someone wants to return or cancel a product, we make sure to ask them what issue didn’t get solved that they hoped would be. Once we can figure that out, we typically offer an additional course or product for free that would benefit them more. Our goal is to never give refunds, but give the customer what they truly need instead.”

return email script

5. Have a personal phone conversation

Edith A. Pearce, Esq. of The Pearce Law Firm shares, “When someone wants to cancel my service, the best retention strategy is to pick up the phone and talk with the client, reassure them about their case, and answer any questions. I sometimes have to remind them why they chose me in the first place, as they may have spoken with another lawyer about their case and have unrealistic expectations.”

6. Educate customers on the benefits and use of the product or service

Camille Chulick of Averr Aglow shares, “We offer returns only if something we sent was damaged or incorrect. Otherwise, we offer education on the skin care product they chose and what to expect. We’re very gentle and empathetic with our customers. We can often get them excited about the product again by talking about what each ingredient will do and showing them results from customers just like them. We have a very high retention rate because our customers are educated on the product.”

Alexandra Zamolo of Beekeeper says, “When a customer isn’t satisfied with our services, we first like to understand what we can improve upon. Next, we like to explain our services again in full detail, highlighting any features that could be instrumental for that client in particular. In the end, we’ve hopefully provided a solution to their problem, as well as left them with new ideas on how to best utilize our services in the future.”

7. Make retention offers on the spot

Matt Erickson of National Positions advises, “Show empathy. It is in your best interest to try to discover what the issue is, and if there is any possibility of resolving the issue to save the client. Even if you take a minor financial hit, like a product replacement or a free month of service, the long-term impact of providing fantastic service will likely serve you well. Even if you cannot retain the client, make sure that they know their concerns are heard and attempt to keep the relationship split amicable.”

Joshua Strawczynski of JMarketing shares, “When customers want to cancel, we try to dangle a carrot of desire, that will increase the value of staying. It might be a free report, a special package deal, or just some insights they had not considered. We are also looking at implementing a system that rewards them for their loyalty, giving them 10% credit for every dollar they spent in the last year. This credit system will encourage them to complete new projects and stay in touch with us. It’s in the design phase currently, but initial testing seems to have been very effective.”

Ben Walker of Transcription Outsourcing explains, “We first offer to fix whatever it is they are unhappy with at no charge. If that isn’t enough, we offer them a discount on their next invoice with us.”

Malte Scholz of Airfocus recommends, “One of the best ways to retain customers who are about to churn is to offer them a free month to re-evaluate your product. We’ve had a few cancellations like this due to outside circumstances, but this strategy saved us in the long run. Don’t mention this strategy publicly, though, because you’ll get lots of people who want a free month. When someone asks to cancel, only then should you make that offer.”

8. Encourage referrals (Yes, even if a customer is considering canceling)

Daniel Foley of Assertive Media says, “Our clients automatically enter into a one year contract when they sign up. After that year is up, it’s a standard 90 day notice period. When someone cancels and we feel there is no way back, we offer them a 6-month refund if they can refer a new confirmed customer to us within the 90 days.

“It’s unorthodox, but it has worked more often than not. Paying out six months is fine, as we automatically get 12 months payment from the new client anyway. Plus, our average client duration is 31 months.”

9. Set up a meeting between decision-makers

Eulises Quintero of Titoma shares, “We’re a B2B company. When somebody wants to cancel our service, we have our CEO personally call or meet with the organization’s decision-maker. We ask them to explain why they want to cancel. Most of the time, it’s because a competitor is offering something of interest to the client. We ask what it is, and try to match the offer and add more value.”

10. Make a personal case for the customer’s needs

Chris Gadek of AdQuick advises, “The best method to stop a customer from seeking service elsewhere is to explain exactly what you’re going to do to provide them with the results they require. Take a little time and outline an entire strategy. Losing one good client can create a domino effect, due to the loss of referrals that might have come from that particular client.”

11. Stay connected with your customers to prevent future returns

Elaine Rose of ReviewInc tells us, “Stay connected with your customer from the beginning by utilizing key touchpoints throughout their journey with your company. You want to know whether your customer is satisfied with your product or service before they make it known via a review platform. If they are not happy with your product or service, offer a solution that will satisfy your customer. Of course, there will be customers that are determined to be unhappy, and who will stop purchasing from you. Keep the door open and offer to have them give you a second chance in the future.”

Wrapping up

Thanks to our experts, you now have an arsenal of strategies to help prevent churn when a customer wants to return your product or cancel your service. Another major part of your strategy is to focus on a strong foundation for customer retention, which can help keep customers from thinking about leaving in the first place.

Need more inspiration for your customer retention strategy? These articles will help you get customers to stick with you in the long run:

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