Beware the Money Back Guarantee, Watchdog Warns

'Your Money Back' May Not Mean 'All Your Money Back'

Especially When Buying Online, Check Guarantee Small Print, FTC Warns. EyesWideOpen/Getty Images

Beware of those enticing “money back” guarantees. They may not be worth the small print they are written in, warns the Federal Trade Commission (FTC).

When a company promises to give dissatisfied customers a refund as part of its 30-day money back guarantee, but fails to tell customers they may not get all of their money back because of “nonrefundable fees,” the FTC and the laws it enforces call it “deception.”

That’s exactly what Network Solutions, LLC, one of the nation’s largest Internet domain name and web hosting companies, did to its unhappy customers, according to a court complaint filed by the FTC.

According to the FTC, Network Solutions’ widely advertised claim of a “30-Day Money Back Guarantee” for its web site hosting services implied that customers who cancelled within 30 days of their purchase would get full refunds. However, Network Solutions failed to clearly disclose that withheld up to 30% of the fees paid by customers who cancelled within 30 days of buying an annual or multi-year package and registering an included domain name.

Check the Small Print, If You Can Find It

Adding to the deception, even careful customers who searched the Network Solutions website for details on the guarantee had difficulty finding them, noted the complaint.

According to the complaint, the fee withholding details were displayed only through hyperlinks at the bottom of web pages advertising the money-back guarantee, “in a font considerably smaller than other text on the webpage.” In addition, “The placement, wording, size, and color of these hyperlinks made it unlikely that customers would notice them.”

Also See: FTC Shut Down the King of 'Revenge Porn'

In a proposed settlement, Network Solutions agreed to clearly disclose all terms of its money-back guarantee before obtaining customer’s billing information. The settlement also bars the company from misrepresenting material terms of any refund or cancellation policy or money-back guarantee, or any other material fact about web hosting.

Get the Details First

The FTC urges all consumers – especially when shopping online for goods and services – to at least try to gather all details regarding product return and refund guarantees. For example, can you return the item or cancel the service for a full refund if you're not satisfied? And, if you do return a product, who pays the shipping costs or restocking fees?

Finally, if you feel you have been deceived by a company’s guarantee or refund claims, you can always file a complaint with the FTC.

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Your Citation
Longley, Robert. "Beware the Money Back Guarantee, Watchdog Warns." ThoughtCo, Aug. 23, 2016, Longley, Robert. (2016, August 23). Beware the Money Back Guarantee, Watchdog Warns. Retrieved from Longley, Robert. "Beware the Money Back Guarantee, Watchdog Warns." ThoughtCo. (accessed December 11, 2017).