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The Frustration of Refunds

By: Maggie Lonsdale BA (hons) - Updated: 20 Sep 2012 | comments*Discuss
The Frustration Of Refunds

Refunds are probably the worst part of being a sales person.

You do all the hard work – finding a new client, building a rapport, offering them the right product and then making the sale. The commission you earn from the sale is what keeps you going – yes, there is a great buzz from the rest of it, but that’s nothing without the commission at the end of it.

Every Sales Person Has To Give a Refund at Some Point

Good sales people rarely have to give refunds, but even the best super sales person will have to give a refund at some point, so rather than think that you can get away with not giving refunds if you are the perfect sales person, plan how you will deal with it when the inevitable happens.

A refund is given when the client that has bought a product or service from you changes their mind. As the commission you earn is likely to be directly related to the sales you complete, you will be expected to return a portion, or indeed all, of the commission that you earned from that particular sale.

As you can see, this is rife with problems, not least of all employees having spent the commission and being unable to give it back, or having to enter into some technical situation of paying back over a period of time. In order for this to be lass of an issue, the majority of sale companies that pay commission do not actually pay the commission until a certain period of time has passed.

Check the Terms of Business

Check your contract of employment and the Terms of Business that you send to your clients. Here, you will be able to note the time frame that you can be expected to wait until you are paid the commission that you have earned your company. Although it can seem frustrating when you see the client invoice and know that you will not see a penny of it for about three months, it does at least mean that when you receive your juice pay check there is no chance of having to hand it back.

If your company uses Terms of Business that means that clients are allowed a refund, make sure you are clear about what their reasons have to be, as there are consumer rights depending on the sector you work in and the nature of your sales. For example, consumer right differ if the sale was made in person or over the phone, in relation to the Distance Selling Act.

In terms of a service-based sales company, it is common for Terms of Business to say that a certain percentage can be refunded up to a week; a smaller percentage can be refunded after a month and so on, usually down to three months. There is usually a set amount that is not refunded for an administration charge.

A good way to reduce (albeit very slightly) the frustration of having to give a refund is to only count your commission after the three months (or whatever is the longest period of time in which the client can get a refund). That way, you will either get a bonus of earning the full commission, or you will not be counting on the full commission anyway.

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