Money Back Guarantee - Yey or Ney
I was very recently asked as to whether I offer a Money Back Guarantee as a logo designer.
I don’t offer any such guarantees and I have a good reason for that. Unfortunately if we lived in a world where everyone was honest and ethical I could, but we don’t live in that world.
The reality is that there are just too many dishonest and/or unethical people in the business world to risk offering such a reassuring guarantee as ‘money back’.
Now if I thought that everyone who approached me for a design (whilst knowing of the money back guarantee) was genuinely looking for an identity for their business, had money to pay for that, and had some level of ethics regarding fair conduct I’d happily offer that guarantee, but this just isn’t the reality.
Due to the length of time spent on consultation, communications, revisions and design time/thinking time involved in providing three high quality (and completely original) design concepts for a new company identity, I couldn’t possibly risk being taken for a ride by those unscrupulous few who would hire a designer on a whim only to decide they don’t want to go ahead with launching a business any more, or because they went with another designer on a whim just because they could.
If you imagine that a freelance designer could spend say 10 hours on a logo design project, if they encounter said unscrupulous/type kicking personality type even 10 times over the course of the year (easily likely as a money back guarantee would only serve to attract this type of person) this could equate to 100 hours of design time unpaid for and when you x that by say £40 an hour that is £4,000 of lost business. That’s a substantial loss for a small business.
No Risks = No Committment
Because they have no risk in hiring the designer, they can do so even if not that serious about their company identity or even if they aren’t sure they are actually launching their businesses. Just to ’see’ what the designer could come up with without even considering or realising the unfairness of that behavior.
Those That Do
The majority of design firms that offer money back guarantees are logo design ‘factories’, with a high turnover of customers and who present the customer with lots of concepts. These concepts are not always original and are often taken from discarded design concepts from their many thousands of other projects for similar industries.
They can keep proffering the discarded designs or unoriginal (hence quick to produce) designs until the customer accepts one of them and the time investment has been minimal and hence worth the risk of offering the alluring money back guarantee to ensure a higher turnover of customers. Which is why I call them ‘factories’.
The design process is quicker for them because less thought is put into it, less research and consultation, and often the designs presented aren’t ‘new’ (they are discarded concepts from other projects) and thus they can afford to offer a money back guarantee as little time is lost if you don’t accept their concepts.
If you look at Logoworks for example, who are a major logo design provider, and browse through their portfolios, on just brief inspection you will see three logo designs for different companies, yet all containing a similar ship motif.
In addition, only recently I stumbled across a design in their portfolio, which I have seen (very similar design) in another designers portfolio, and another designs portfolio on top of that.
Originality is not the forte of the logo design factories who many of whom offer money back guarantees. Their quick and lacking in originality design process is what allows them to take the risk.
So that’s my take on money back guarantees in the design industry, what is yours?
February 25th, 2009 at 7:24 am
hi. may i know your qualification?
February 25th, 2009 at 9:43 pm
Although I have not yet designed any logos for a client (only personal projects), I completely agree with your point. It is too much of a risk to offer a money back guarantee - especially when working over the Internet which can be very impersonal. It’s far too easy for a client to send you a short email saying they wish for a refund and will not be carrying on with the project - after hours of researching and development of designs.
February 26th, 2009 at 10:19 am
Ruchira … I don’t have any design qualifications, I’m self taught
Thanks for your comment Danny, I think it takes a different business model to get away with the money back guarantee .. you need to be much more a quick ’shop’ type operation where you get them in and out again fast, however I don’t feel this is the best way of designing for a business.
Amanda
February 26th, 2009 at 7:10 pm
I agree Amanda and Danny, a money back guarantee would just be exploited by those few less honest people.
Also agree, that you can’t design in that factory style and get anything effective or unique out of it, it requires thought and finding out about the business and what they want to communicate, great post Amanda
March 1st, 2009 at 4:34 am
I totally agree. While I am starting up my web design business and have a low number of clients I am offering a “pay after 100% happy” guarantee. However I see your points totally about the problems this can have and will not be offering this permanently. Whether offering graphic design or web design the amount of time it takes to talk with your customer and do the job is incredible. To do all this and get no payment at the end is just not acceptable.
March 2nd, 2009 at 1:17 pm
True enough that most of us have to take risks like this and similar in the beginning to establish reputation and a good portfolio, but it’s just not feasible to continue for the long term and hope to maintain a profitable business in that way.