Handling Refunds, Disputes, and Difficult Clients Like a Pro

Refunds, disputes, and difficult clients are inevitable as your business grows. The key is preparing for them and handling them with professionalism, confidence, and systems that protect your business.

In this episode, we share how to anticipate and navigate these challenges without losing valuable time, energy, or your reputation. From contracts to conflict resolution, we’ll show you how to handle sticky situations in a way that strengthens, not weakens, your business.

We cover:

• Why clear contracts and agreements are your first line of defense
• How to set expectations about refunds and disputes from day one
• The importance of spotting “red flag” clients before they ever sign
• Win-win ways to resolve disputes, like service credits or alternate solutions
• Why processes and checklists save you from emotional decision-making
• How (and when) to fire clients who aren’t worth the energy

Difficult clients don’t have to derail your business. With the right systems and mindset, you can turn challenges into opportunities for clarity and growth.

Want to protect your business with the right systems and strategies? Join our free Visionary Founders Club, a community where small and mid-sized business owners connect, share, and grow stronger together.

“Sometimes the best business decision is firing a bad client.” – Jores Minasvand

Transcript for “How to Handle Refunds, Disputes, and Difficult Clients Professionally”

The transcript below was automatically generated. Please ignore any errors or inconsistencies in the text.

Anna Angelova   0:05
This is more than just Task Management, your favorite daily podcast where we help you build a thriving business with me, Anna Angelova, business coaching consultant and my fellow co-host and business consultant, Joris Minoswand. Hey, Joris. Happy Thursday. Yeah, yeah.

Jores Minasvand   0:23
Thursday, yes.

Anna Angelova   0:25
Happy to.

Jores Minasvand   0:26
Hey Anna, happy Thursday. So happy to be back at home Canada and start recording our our sessions in person in the right time, not six hours ahead where I have to be on and.

Anna Angelova   0:32
Oh yeah.
Oh, Oh yeah, definitely. It’s different. It’s different. Like this is one of the things people think that, oh, when you travel for work, it’s so cool when you are able to travel for work. But when you travel for work, you end up working multiple time zones because like you still have clients in.

Jores Minasvand   0:41
Yeah, so.
Oh.

Anna Angelova   0:58
North America, you work the European time zone. It’s like it’s even crazier. So yeah, anyway, yeah, it can be very, very tiring. That’s true. But today we’re not talking about business travel though. Don’t, don’t, don’t get encouraged. We’re not talking about business travel.

Jores Minasvand   0:58
And then?
Very tiring, I guess. Anyways.
All right.
Yeah.

Anna Angelova   1:18
Covering today is an interesting topic that you might be thinking that this will never happen to me. But as your business grows, like when you’re starting your business and as it grows, what might happen is that you might start encountering people who want refunds, people who are disputing things.
With you and difficult clients ultimately. So how do you handle this professionally? Like especially if like you haven’t encountered something like this so far, right? This is the first time you you have you’re dealing with a situation like this. So how do you do this?
How do you deal with these things professionally in a way that even benefits your business? So this is, this is what we’ll be talking about today and like first and foremost, it’s it’s really important actually even if you haven’t faced this before to.
Actually have processes in place like to think about how how you do this and have the necessary process in place and for some of these things actually refunds and disputes. These are things where of course you you need to have a a a lawyer review your contract, but these are things.
That are on the contract, especially if you’re providing services. These are things that are part of the agreement that you sign with your clients. For example, as a coach, this is one of the things that’s in the coaching contracts that I’m signing that my clients are signing when.
When they work with me, there is a section about refunds, dispute and like with the refunds like because I’m on certified professional coach, ICF certified professional coach and there is actually code of ethics. We ICF has code of ethics that as an ICF coach I.
Follow so the the contract has option for refunds for for people, especially if it’s like a prepaid package where clients are able to cancel the contract and get a refund for the remaining of the unused sessions.
So first and foremost, your contracts, terms of use, agreements, whatever you have with clients, they need to be very, very clear with how these things work.
And then I highly recommend, especially when it comes to high ticket offers and services you might have and even products that you think about spending time with your client where you actually go to the.
Agreement. If you need to go line by line and say, OK, this is what this section is all about. Any questions? This is what is this section is any questions? Do you agree with this? This is about the refund and some like I’ve been part of programs for example where what they’re saying is that.
You have three days after you sign, you have three days to say, Oh no, I don’t want this. After that they they don’t have, they don’t provide refunds. So again, you want to have processes and clear agreements, clear terms, clear contracts that state how you handle refunds and the disputes.
What the steps are, and I’ll say one more thing. Actually, no, before I say the other thing, before I talk about the other part with difficult clients, I actually want to hear Joris, your thoughts on the topic.

Jores Minasvand   5:04
No, yeah, you are.
You put it very well. Disputes, refunds, disagreements are inevitable.
Especially when your customer base grows and you get a variety of customers, some people, and this is both cultural and business culture, they take dispute and being tough and being negative.
And being argumentative as a position of power, especially if they’re the customer. So no, you didn’t deliver this. Actually, you need to deliver a lot more. And I’m gonna get three weeks of free development out of this project no matter what, blah blah blah. So.
You need to get ready for that and there there are a few ways to to deal with that well.
I’ll just use this analogy. I don’t know if it’s if it’s the right analogy or not. Pickpockets and and theft in stores are inevitable. So what stores do after they come up with the price of a product?
They add 5% on top of that product to cover that, to cover the losses. And one of the losses is the is theft. You know you’re going to get a dispute, especially over time after you get to a few projects for a certain customer, you know this customer is going to dispute.
Increase the price, put 20 percent, 30 percent, 50% contingency in your pricing. So if you’re whether it’s a service or a product. So when when you can, when you give them this, this whatever they call it and I will talk about that for a second, the refund, so-called refund, you’re still covered.
So now how do we deal with it? I would say again, know your customer. If your customer is really a good customer and I’ve had this and it’s just something that happened or they’re just having a.
Bad day that day and it’s happened to me where two days later or even the next day the customer called back and apologizing like this is not me. I apologize, something happened and I was just, you know, so if you know it’s that kind of a customer.
There’s not even a dispute. Give them what they want. And one of the things you can do is just be that. Let’s say they want money back. Give them service credit.
Right. You don’t have to. They don’t understand. They’re just so upset or irate or, you know, ego in on an ego trip that they want money back. OK, well, there are many, many ways of giving money back. Service credit or free workshop or there are many ways of doing it, but.
The key is to know your customer and one important thing and I think we talked about it this week, earlier this week.
Be ready to fire a customer because if a customer is doing nothing but complain and easy do your e-mail and irate yourself and your people and done, yes, you want the credit. Yes, we will do the credit. The work is finished. We will issue a.
Final credit. Once you pay us the final invoice, we’ll issue or we’ll deduct the credit from the invoice and we’re done.
That’s your last sentence you say to the customer, the bad customer.

Anna Angelova   8:38
And this is something that for the difficult clients, this is something that aligns very well with what I wanted to bring up. So as you encounter these type of customers and I mentioned it, I think on Monday, no Sunday when we were sharing what’s coming up.
Something that as I said, I’ve I’ve heard this term from Darren Hardy. I don’t know if he’s the only one using it or kind of using it, but ultimately it just like you have a profile for your ideal customers, the avatar for your ideal customers as you encounter difficult clients.
What you want to do is create a profile for the customer that you don’t want to work with. So you can actually spot them early on and not even allow them to become your customers. Like Darren Harley called these pitas. It could pain in the ***.
So as you encounter these type of clients, yes, deal with them, fire them and update your processes so you know that OK, these are some of the red flags.
Now the next time we we have a sales call with someone who exhibits some of these red flags, take no, we appreciate you, but no, it could. We don’t want to waste our time. We don’t want to waste our resources with this type of client. So it’s really, really important. We talked about prevention.
And I think was it yesterday we mentioned prevention. So this is even here prevention is really important and when it come to when it comes to equity funds, disputes and things like this dealing with difficult clients.
Ultimately, how much time do you want to waste on difficult clients when the five hours spent? Yeah, your nerves, your your personal well-being and your time spent on a difficult client trying to.
Reason with them versus the like 5 hours spent on finding your ideal client. Think about it like monitor even a good what it is and how you feel as well with your well-being. So there are I I like the fact that George that you mentioned that stores.

Jores Minasvand   10:54
Mhm.

Anna Angelova   11:04
Actually have that it’s already into the baked into the price that there will be some people who will steal. For example, there will be some people who will ask for a refund and return. Some of the merchandise will be broken or something like this, where actually I think some of these things go back.
To the producer, the one that creates the merchandise, not the store itself. So ultimately think about the experience you want your people to have and your customers to have. And like one of the things I always remember, Joris, you were sharing this story.
And I know that the example is from a big corporation and probably your first thought is, oh, but they are a big corporation. I can’t afford this.
I really, really encourage you as a business owner, if you might be just starting your business and in the beginning it might be hard to think in this way. But instead of jumping to the oh, they’re different, my business is different, they’re big, I’m small. Instead of jumping into the excuses, start asking.
How can I apply this to my business? How can I do this for my clients and my customers? So the example that I remember, always remember is with Costco. You were sharing how you bought, you bought a game for your son and then the this it got the the.
The game broke, so you went back and you wanted to get a new one, like a return or something like this, and they processed it very quickly. They were like, Oh yeah, absolutely. They gave you the refund so you could buy the next one. And then I think it happened a second time you went, if you want to share it a little bit.
Mhm.

Jores Minasvand   12:55
Oh yeah, that that was, I think that’s a good example of not a difficult customer because it just happened, but more of a good customer service. But refund, yeah, it’s a policy because you with Costco, because you pay that that fee, annual fee, Costco is on your side, not the.

Anna Angelova   13:03
Well, but refund, right? Refund and things like this, right? Yeah, yeah, exactly.

Jores Minasvand   13:15
Supplier side and yeah, it just happened that just before the year was over, it stopped working. We took it back. It was brick. They gave us some money to go back, buy a new one. So yeah, it was, it was very interesting and.
You know, like I said, after you deal with the customer a few times, you do, you’re going to start learning that this person is not worth it. This company is not worth it. This branch is not worth it because it’s not just the money, it’s about the aggravation every time they you see an e-mail.

Anna Angelova   13:44
Yeah, yeah.

Jores Minasvand   13:51
From them you it turns into poison. Every time there’s a call coming in from them, you feel like you don’t want to. You want to throw the the phone in the river. So stop, stop. Very simple. Yeah, everybody would understand.

Anna Angelova   14:02
Yeah, absolutely. When it comes to difficult clients, stop. Absolutely. Because when it comes, when it comes to refund, refund and dispute, this can be legit. Like this can be legit. Remember we got so last year we we actually got.
Air fryer and the first one, the first one we got was there was it was not, it was a bit defective. So we exchanged it. We asked for an exchange and it was really quick and again it was drama zone and they have their policies and this is what we are saying is that even you.

Jores Minasvand   14:21
Yes.
Defective.
Yeah.

Anna Angelova   14:38
As a small business, you can and should have this kind of processes, this kind of policies where you take care of your customers. Yes, you take care of the business as well. You make sure that you don’t work with difficult clients.
However, at the same time, some of the refunds and some of the disputes are probably legit and this is OK. We are not perfect. We are also learning and even when we have the necessary steps to make sure that.
You know, we get in front of the right people and get to work with the right clients and customers. Sometimes in the beginning we don’t know that it was not a match. Later on we find out that oh, it’s not and it’s not like the person is difficult or anything, it’s just not a match, so.
That’s OK. Refund, deal with the dispute. And like when you were talking about the the the the different options you have, I also thought about like the energy leadership framework. I know I’ve mentioned it something I use with my coaching clients.
With the energy leadership framework, in any situation, we actually have seven ways we can respond to that situation and again when it comes to this kind of.
Things like refunds, disputes, difficult clients. There are at least seven ways you can respond. Like one is to hide and and not do anything. Another one is to be aggressive, just like them and fight, fight, fight. Then another one is to take responsibility and.
Do whatever is necessary. And then the 4th one is to see how can you service them, how can you help them like really take care of the other person. A fifth one is looking for a win-win solution. How can you resolve the situation in a way that everyone is happy? And you’ve probably seen this like I I know we talked.
Quite a bit and I just want to mention one last thing, like when it comes to these things nowadays, especially a lot of people, we go online and put our frustration online. Like when we’re happy, we so rarely, like we’ve been saying with our travels, oh, we we need to put a good review here and a good review there and we don’t do it.
We keep on forgetting and we keep on postponing it. At some point it’s like it’s out of our mind. But when we are unhappy, we’re so quick to go and put that review out there. So monitoring your online reviews and making sure that you respond to them. And you’ve probably seen this. I’ve seen this.
Where someone would put like a two star or a three star review or even a one star review and then after the company resolves it, they’ll actually go and update the review with the update as well saying updating it to four-star from one star because they actually came and helped and resolved the issue.

Jores Minasvand   17:31
Yeah.

Anna Angelova   17:38
So this is one other thing, like monitoring your online presence. Nowadays it’s really important. And again, here we’re talking about having the necessary processes, procedures, checklists, policies, so you know.
First of all, preventing these things and then second when it happens, how do you deal with this?

Jores Minasvand   18:03
Very nice session. I love it. I love it.

Anna Angelova   18:06
Oh, me too. It’s a it’s an important conversation, so.

Jores Minasvand   18:08
It’s.
It’s inevitable. You know it’s coming, and it’s best to be ready for it.

Anna Angelova   18:16
Yes, you want to be prepared. This is probably not the first thing you prepare in terms of your processes when you’re starting. But again, as your business grows, you need to have these in place and if you want to continue the conversation and even get examples of how to do these kind of things.

Jores Minasvand   18:19
Yes.
OK.

Anna Angelova   18:35
We invite you to join the Visionary Founders Club, the community where other business owners just like you are gathering, learning and sharing their experiences. And it’s it’s an awesome, awesome place growing a growing community.
And we are there every single day. So if you haven’t joined it yet, the link is in the description of this episode. Click there, join it and we’d love to see you there and help you in any way we can to build a thriving business.

Jores Minasvand   19:07
I look forward to it. Thank you, Anna.

Anna Angelova   19:09
Me too. Thanks, Joris. And tomorrow we’ll be back with the Friday episode of More Than Just Task Management, where we’ll be talking about the signs that you might have outgrown your current software.

Jores Minasvand   19:11
I won.
Oh.
Robon.

Anna Angelova   19:26
So yes, this is something that if you have an established business and you’ve been using a system for a while, definitely listen to that episode because even if you’re not wondering, should I replace this or not?
There might be signs that you’re missing, so join us tomorrow when we discuss this very, very interesting topic.

Jores Minasvand   19:50
Brianna.

Anna Angelova   19:50
OK, right here it is.