Why the “e-Book Refund Fraud” petition is a bad idea for indie authors

Today I ran across a Facebook link to this petition.

I am not going to sign it, and I would urge anyone who cares about independently published books not to sign it, either.

Why?  Because it would hurt authors, and it would hurt unknown authors most of all.

The language of the petition is rather emotional, it talks about “fraud” and “theft” and invokes an image of hoards of greedy customers buying books, reading them, and returning them.

Does that happen?  I’m sure that there are people who deliberately abuse the return policy, just as there are some who will abuse any other store policy for their advantage.  I knew a man, many years ago, who would buy a radar detector just before a road trip, and then return it as soon as he got back home.  I’m sure that he wasn’t the only one.

However, in my rather extensive experience in retail loss prevention, fraudulent returns are both fairly rare and rather easy to spot.  I am confident that Amazon has algorithms in place to recognize and flag accounts that show a pattern of repeatedly buying and returning e-books.

Seven days is a reasonable window for returns.  Yes, it is possible to read a book in seven days. It is also possible to copy an e-book to another medium in a few minutes.  If someone has the desire to commit fraud, the only policy that will prevent it is an “All Sales Final, No Returns” policy.

Most people do not return a product just because they can.  When an item is relatively low cost, most people won’t take the time to return a product unless there is some serious defect.  I personally have never returned an e-book, even though I have bought some that were really terrible.  I simply chalk up the buck or two to a learning experience and avoid that author in the future.

Tightening or closing the window for return of e-books will not significantly impact fraud.  What it will do is impact sales, and the impact will be greatest for unknown authors.

Customers are far more likely to purchase a new product if they are aware that they can return it if they don’t like it.  Even though most people will not return a product, knowing that they can is a powerful tool for overcoming sales resistance.

Amazon knows what it is doing.  This company didn’t get to be a retail giant by alienating customers.  Their return policy is based on extensive research in buying habits of hundreds of thousands of consumers, and is designed to maximize sales.  Stopping a few cases of outright fraud is not worth discouraging large numbers of legitimate sales.

Look at it this way–all restaurants have customers who run out on the check from time to time.  It’s part of the business.  Suppose that a restaurant started putting an armed guard at the front door who would demand to see a paid receipt before he allowed you to leave–would you still eat there?  Maybe, but I suspect that most people would be more inclined to patronize an establishment that didn’t impose such draconian policies.  The loss of sales from alienating legitimate customers who be far greater than any savings from preventing walkouts.

It’s the same thing with Amazon’s return policy.  As I said, I have never had an e-book returned.  I am quite certain, however, that many customers who did buy my book would have thought twice about buying a book from an unknown author if Amazon didn’t allow for returns.

Think about it.

 

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About MishaBurnett

I am the author of "Catskinner's Book", a science fiction novel available on Amazon Kindle. http://www.amazon.com/dp/B008MPNBNS
This entry was posted in On Promotion, On Publishing and tagged , , , , . Bookmark the permalink.

12 Responses to Why the “e-Book Refund Fraud” petition is a bad idea for indie authors

  1. Dave Higgins says:

    An excellent statement of why a returns policy creates more than it takes on average.

    Another downside to a more draconian returns policy is forcing the reader to decide very quickly if they like the book, which cuts down how much you have to draw them in; instead of being able to get away with an imperfect second page because you can afford to have someone put it down and then come back to it tomorrow because they are vaguely interested and be drawn in by the end of Chapter One, you suddenly have to make the amount someone could read in a day much more addictive to many more readers. Obviously this can be partially addressed by putting a sample up, but do people who buy and return actually read samples to judge a book, or would they buy and return the perfect novel because they place their benefit above others?

    A more complex question is whether indie authors should be taking the possibility of returns into account when pricing, because I suspect publishers have included it in their pricing structure. I can see arguments either way.

  2. Wanderer says:

    I don’t think I’ve ever returned a book in any shape or form—like you said, it’s a learning experience. Having a kindle has made me more likely to buy books I wouldn’t normally just since they are cheaper and–hello, instant delivery! I’ve bought a few with which I was disappointed, but now I know not to buy other books by that author–or maybe just in that series.

  3. Thanks for this. I had never thought of it this way, but I think you’re exactly right. You definitely convinced me. Sometimes the cure is worse than the disease.

  4. I hadn’t seen that petition until you linked it, but … wow. Those people are so misguided. I get what they *think* they’re trying to accomplish but, like you said, it’s ultimately a terrible idea to stop people from returning ebooks. First of all, the petition’s entire premise is flawed — they are equating ebooks with food, but they’re not, they’re books. And if you can return print books within 14 days of purchase, why shouldn’t you be able to return ebooks? It’s not like you couldn’t hypothetically read the print book before you returned it. People who like to cheat the system are going to do it, and there’s not a whole lot that can stop them. The return system is in place for people who honestly didn’t like the book, or found problems with it, or whatever. Like you said, removing the option to return ebooks will remove that customer satisfaction safety net, ultimately resulting in decreased sales for us all.

  5. I’ve had a few copies of my titles returned on Amazon and that’s fine with me. I only hope they needed that ninety nine cents more than I do 🙂

  6. Judy Goodwin says:

    From what I’ve seen, the writers who complain about the returns policy have substandard books up with a lot of grammatical errors, so I have to wonder if that’s why they’re getting a lot of returns. I’ve barely had any returns, and I publish not only full length novels but short stories that could easily be read and returned.

    I like that Amazon has a method to refund a book that you accidentally click to buy, because I personally know how easy it can be to hit the wrong button!

  7. Elle Knowles says:

    Haven’t heard the word catskinner in forever…not since we homesteaded in Alaska in the late 50’s. These were the men that operated the bulldozers helping to clear a road for us. Funny how strange things stick in your mind when you are young! No on the petition! Looking forward to reading your book.

    • C.Hill says:

      Which is where the term, “There’s more than one way to skin a cat.” But I bet you already knew that. 🙂

      You swayed me, Misha. I wasn’t really informed anyway to start out, and can understand why these people are petitioning, but as you said: If people are going to abuse the system, commit fraud or other such things, there’s nothing in place that can effectively stop them. I’ve personally never returned an ebook, or any book for that matter, save a library book, if only because if I don’t like it, I’ll let somebody else read it to see if they enjoy it.

      Thanks for the info!

  8. Ellespeth says:

    It’s never dawned on me to return a book – ever – of any sort. I agree, artists be wise.
    Ellespeth

  9. I agree. And I didn’t even know you could return e-books. I can read one in a couple of hours, so the 7 day policy wouldn’t put me off. The mean-ness would though.

  10. Pingback: Oh, Look! Another Petition To Make Amazon Change How It Does Business. | mishaburnett

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