Returns, Refunds, and Chargebacks: The Ugly Side of Direct Sales

Advertising and Marketing

Whether it’s the promise of greater creative freedom, faster payments, more control over pricing, or the opportunity to build a deeper connection with your audience, direct sales is steadily gaining popularity within the self-publishing community. Yet, this entrepreneurial approach comes with a hidden cost: the responsibility of personally managing customer service issues like refunds, returns, and chargebacks. But while having a customer demand their money back for one of your books can feel personal, it’s rarely a reflection of your work or talent. Instead, it’s simply part of the cost of doing business—a challenge that every business owner must eventually navigate.

Today, Ginger takes a closer look at these customer service challenges, sharing his personal advice on managing refunds and chargebacks with ease. From understanding why readers request them to strategies for minimizing their impact, he offers practical tips to handle these situations efficiently and professionally. It doesn’t matter if you’re selling eBooks or physical copies, directly or through a major online retailer, returns are an inevitable part of the process. The trick is learning to navigate these challenges without letting them overshadow the rewards of building a stronger connection with your readers.

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This article was inspired by thriller author Isabel Jolie, who recently wrote her own article about how authors running direct sales (as in, selling their books directly to their customer, and not through a third-party like Amazon or Apple Books) have to deal with customer service issues. I’m not sure her article is live yet, but I’ll link to it when it is!

Isabel’s article inspired me to write a post of my own about this topic, because customer service is a challenge authors will inevitably face when selling directly to their readers – and I realized I hadn’t addressed it in any of my previous posts about direct sales.

It is something worth addressing, because having to deal with customer complaints is just one more of the conveniences you’ll have to sacrifice when switching from Amazon to direct sales – but one you needn’t get too stressed about. 

Compared to a lot of eCommerce products, books tend to have a fairly easy-going customer base – and in the case of eBooks, you’re not necessarily “losing” anything when you have product returns, except the potential income from that sale. This is a very different situation to vendors selling physical products (although that will be a concern if you’re shipping out paperbacks or hardback copies of your book.) 

But even if you’re only selling eBooks directly, understanding how to deal with returns and refund requests is still important, because you can lose a lot of money if you get it wrong.

That’s why in this week’s article, I aim to teach you what you need to know to keep a handle on refunds and returns from a practical point of view – and also how to process the impact they have on your mindset and motivation.

Refund requests are the price of doing business

First off, don’t take it too personally.

There isn’t an author alive who hasn’t had one of their books returned, and it’s a challenge all publishers have to deal with as part of their standard operating procedure. 

And it’s an issue that arises no matter which platform you’re dealing with. If you review your Month-to-Date reports in the KDP Dashboard, you’ll probably find that you’ve had readers return your books even if you’ve exclusively been publishing on Amazon – the only difference is that Amazon takes care of the whole process for you. 

It’s actually absurdly easy to return a digital book for a full refund on Amazon – so easy that Craig even wrote an article about people abusing this feature. Amazon has a system in which readers can return any eBook for any reason within 7 days of purchase, no questions asked. They simply need to request a refund from their Amazon dashboard. The revenue for this sale will be removed from the author’s monthly earnings – and because Amazon only pay authors 60 days after month’s end, many authors don’t even notice losing money from returns.

But this isn’t the case when you sell books directly. Whether you’re using Square, Shopify, or PayHip, you’re now a retailer, so the burden of dealing with returns and refunds falls on your shoulders. The upshot is, however, that it’s not as easy or seamless a process as it is on Amazon, so in general authors should find they’re getting fewer returns or requests for refunds (and in all honesty, it’s not even something that happens all that often on Amazon.)

To give you an example of that, in the past few months I’ve sold 3,110 copies of my books directly to readers, and had 9 requests for a refund. That’s an overall refund rate of 0.29% (which I modestly think is pretty good.)

If your return rate is significantly higher than that, it might be worth checking out how your eBooks are formatted, whether or not your delivery platform is configured correctly (I use BookFunnel, which is pretty intuitive) or if there are any other reasons which might explain higher-than-average customer dissatisfaction. Every author will suffer from refund requests at some point in their career – but if you’re getting more than just a handful, there’s probably a reason for it that’s within your control to fix. 

Why do readers return your books?

Assuming there isn’t something wrong with your books or delivery system, it’s easy to get caught up with the question of why readers request refunds for your books.

If you’ve got a refund rate of less than 1%, it might not be a question you should spend too long pondering – but here are some potential answers anyway.

One customer of mine requested a refund because they thought the books they were buying were physical paperbacks rather than eBooks. My landing page specifically has the books rendered as eBooks, even showing the covers on the screens of iPads and Kindles to make it more obvious, so I’m not sure if this was the real reason or just an excuse. Either way, I didn’t take that request too personally and provided a refund.

Another customer purchased the same books twice in a row, so I only had to issue refunds for the duplicates. Again, I didn’t take this personally – I just assumed they’d had a couple of glasses of wine before doing a late-night search for steamy MC romance novels to read and hit the “buy” button too enthusiastically.

I haven’t had a customer explicitly say they didn’t like the books when requesting a refund, but even that I wouldn’t take too personally. I’ve sold over 70,000 copies of my books on Amazon, so I know that a lot of readers do like them. You can’t please everybody (and good writers never try to in the first place) so I would just assume the one person who requested a refund found them too spicy.

(And too spicy is how the majority of my readers like it!)

That being said, sometimes you will get feedback that’s worth acting on. Back when I was selling my books exclusively on Amazon, I had some customers return one particular novel (it was only about the third or forth full-length book I’d ever published) because the female main character cheated in it.

That taught me that the days of the bed-hopping heroines you’d find in a Jilly Cooper novel were over, and my characters have been monogamous ever since. The sting of getting book returns was more than worth it to learn that detail!

But even that case was an outlier. The most important thing to remember is that in most instances, your book being returned doesn’t have any reflection on you as an author. Not everybody is into the same things. Not everybody is in the right frame of mind when they click the “buy now” button and they get buyer’s remorse. In a lot of cases, a book return says more about the reader than it says about you, so while you should take note of any potential problems when you encounter them, for the most part you should just take each refund request on the chin. 

How do customers request refunds?

Customers returning your books can bruise the ego a little, but for the most part the process for mentally dealing with it is the same no matter where your book was sold – don’t let it bother you.

The practical process, however, can be very different.

Out of the 9 returns I’ve run into, only one of them was a reader emailing me directly requesting their money back (it was the customer who’d accidentally bought duplicate books.) That was easy enough to deal with – I sell my books on Shopify, so providing a refund is as easy as clicking on a button to get the transaction reversed.

The rest of the returns, however, were a little uglier than that. I had customers request chargebacks on their credit card, instead. I found out via Shopify or PayPal when they opened up a disputed transaction request that I then had to deal with.

It was annoying for a number of reasons – especially with PayPal, because in addition to having to provide a refund, there were additional chargeback fees I had to process. Therefore a bundle of books being refunded didn’t just cost me the revenue, but also a $15 processing fee – biting quite hard into my bottom line. I actually ended up ditching PayPal as a payment option because of that (I haven’t encountered similar fees with Shopify Pay… yet!)

But annoying as it is, I guess I can grudgingly understand why customers do this – it’s much easier to click a purchase dispute button in your banking app than actually deal with a human being face-to-face (or over email, at least.)

But it’s even more frustrating when someone asks for a refund citing that they never received the product, but then you check your BookFunnel reports and discover that the customer in question had actually downloaded the digital copies! They’re literally (or digitally) stealing from you!

But whenever I’ve fought back against these disputes with PayPal, they normally sided with the customer despite the evidence – so these days I’ve learned to suck it up and just swallow these costs as “the price of doing business” and as long as my return rate remains at a fraction of a percent, I can do so without taking too much of a financial hit.

(It’s still annoying, though.)

But what about physical books?

When I’m getting eBooks returned, I’m able to take the hits on the chin because either I’m not “losing” anything except the potential revenue, or I’m taking a modest hit from those processing fees. The situation changes when you’re actually selling physical copies of your books because these cost you money not just to print, but also to ship out to customers.

In our recent podcast episode with thriller author Kevin G. Chapman, he outlined how he deals with refund requests on physical books and it’s a good rule to follow. The first step is the same as dealing with refund requests on eBooks – accept the loss as the price of doing business.

After that, however, Kevin makes a choice. He has the refunded paperbacks scrapped, as it costs him too much to have them shipped back to him. However, he pays for any hardback editions to be physically returned so he’ll have those copies to sell at conventions, fairs, or to give out to readers. 

It’s not ideal, but it means you still get something back in return for the money you’re losing. 

And fortunately, Kevin’s Print-on-Demand provider deals with a lot of this process, so he doesn’t need to get his hands dirty physically repackaging or picking up actual books. If you’re planning on selling physical books directly to readers, that should be one of the considerations you make before committing to a partnership with Printify, Ingram Sparks, or whoever else will end up physically printing your books. 

Is there anything you can do to stop returns and refund requests?

In this article I’ve tried to explain that returns and refund requests are inevitable, but obviously it would be nice to be able to do something about reducing them.

One technique that I’ve had some success with is engaging with customers directly when they request a refund – especially if they’re using the less-than-ideal method of making a chargeback on their credit card instead of reaching out to you directly.

When I receive a chargeback from a customer, I can quickly identify who they are by cross-referencing the transaction to my customer database on Shopify. This gives me the customer’s email address.

One time, when a customer filed a chargeback by claiming “they never received the product” I emailed them directly and apologized for the trouble they were having, and provided direct links to the books they’d bought on BookFunnel. This way, I hoped they’d cancel the chargeback since I’d provided them with the products they’d paid for.

The goal was to try and bypass the impersonal, indirect convenience of hitting the “chargeback” button and get them to recognize you as a person instead. Suddenly I was right there in the customer’s inbox, demonstrating that I was a real live human being and not some faceless retailer. More than that, I was trying to help solve the problem they’d reported to their credit card company when requesting a chargeback.

I’d hoped that this would inspire (or shame) them into actually acknowledging the transaction and making good on it. Unfortunately, it didn’t work – I never heard from the customer again, and as I mentioned earlier, despite providing evidence to PayPal that they had, indeed, received their books – PayPal eventually ruled in the customer’s favor. 

So, this tactic didn’t work out for me – but don’t let that dissuade you from trying it! One of the keys to being a successful self-published author is to create a connection between yourself and the reader, and hopefully you can accomplish that in the case of returns and refunds as well.

In fact, that’s one of the advantages of selling books directly, as opposed to letting Amazon deal with returned books. When a reader takes advantage of Amazon’s wildly lackadaisical book return policy, you normally don’t have any voice in the dispute – you just lose the royalties you would have made. With direct sales, at least there is an option to try and reach out to the customer directly – and who knows? Perhaps if you try it, you’ll have better luck than I did!

Conclusion

At the end of the day, returns and refunds are just part of doing business. It’s something that impacts every entrepreneur, and I’d even argue that authors are insulated from some of the worst of it thanks to the nature of the products we’re selling.

So don’t take book returns too personally. Just use them as an opportunity to monitor the systems you’ve built to sell and deliver books, and take advantage of the ability to reach out directly to customers who’ve requested a refund.

Remember, you’re more than just an author when you self-publish. You become a business owner and operator – and these are challenges business owners have to face on a regular basis. As long as you’re working hard to publish the best books you can, returns and refunds should have a negligible impact on your bottom line.

And my final advice for tackling this issue? Look to the positive. In the past few months, I’ve sold over 200 books for every book that’s been returned or refunded. As long as I keep focusing on that number, I don’t feel so bad about it!

So, that’s my advice for dealing with returns and refund requests – but I’d love to know your thoughts! Have you had to deal with this issue while selling directly? Let us know in the comment section below.

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