THE MBA REFUND STRUGGLE
Story of Rounds 1, 2, and 3 were written by Rick Archer in May-June 2005

In May 2005, The Assistant Director of an Houston MBA Graduate School Program and her fiancé, a Graduate Student enrolled in her program, disagreed strongly with the ssqq refund policy. 

EXHIBIT A - Establishing the Credentials of our "Masters of Business Administration" Couple

In case you are curious how I know these two people were associated with a MBA program here in Houston, it said so at the bottom of the very first emails I received from them.

Ms. CV
Assistant Director of MBA Program
xx Graduate School of Management
xx University

ROUND ONE - The First Salvo

The Story of the $46 Refund Struggle Begins with a woman using SSQQ Online Registration to enroll her fiancé for a Ballroom course.  My guess is they wanted to prepare for their first wedding dance. This course would have worked fine except for one important problem. 

Let us now welcome to the story Mr. JT, Ms. CV's fiancé. 

It was at this point that I first heard from Mr. JT.  I guess he decided it was time he joined the battle since I was obstinately holding my ground. 

"We have paid for a service that we have not recieved nor plan on recieving..."

Of course the main reason they never received their class is because they never bothered to show up, a point JT conveniently omitted from his argument. 

Still you have to admire the cleverness of his logic. For a moment there, I recall being at a loss for an answer.

TERRIBLE TUESDAY EVENING - I PONDER MY NEXT MOVE

Ms. CV's EMAIL 9 and Mr. JT's EMAIL 11 on Terrible Tuesday were powerful letters. I was in a real struggle here with strong-willed people determined to get their money back.

I spent that evening thinking carefully about their position.  This was when "doubts" about the fairness of my position made their insidious entrance into my thoughts.  I went to the ssqq web site and re-read my previous arguments.  That helped a lot.

I was certain my position was fair. But how would I going to get them to accept it gracefully?  Is there ever a way to resolve a conflict like this without a winner and a loser? 

Meanwhile, maybe I got the wrong impression, but I felt that Mr. JT was attempting to intimidate me.

"I really don't have time to play your games. I would recommend that you refund the money and we all walk away."

I took these strong words as a threat.  Did I detect an unwritten "or else" in there if I didn't follow his recommendation?

Although I admired Mr. JT's willingness to come the defense of his helpless damsel in distress, it seemed to me that Ms. CV was more than capable of handling herself.   I smiled ruefully at the suggestion I was giving her "grief".  

Good grief, she was giving me all the grief I could handle as well!!  The feeling of receiving grief was mutual, I assure you.

I can attest that her posture in EMAIL NINE came across to me as a person more than slightly determined to get her way in this matter.

Between the two of them, their double-team demands for a refund were making me feel back into a corner.  They had come at me with both guns blazing. 

By coincidence I had already been working on an article called "A Deal is a Deal". If you ever read the article, you will see it deals with the "Philosophy of Refunds".  (As an aside, this story was in essence the predecessor to the story you are reading now.)

Reeling from the strength of their attack, I did what I always do - I started to write.

The first thing I did was isolate what I thought were their two best arguments. I took a good look at them.

HER WORDS: "I was conveniently uninformed that I must seek a refund prior to the first class until after the first class was over."

MY REPLY: That is a new one. Your reasoning baffles me. How do you expect us to warn you of our refund policy before we know you wish to ask for a refund??  The policy is posted on the Internet loud and clear. I don't know what else to do to protect you from our predatory business practices.

HIS WORDS: We have paid for a service that we have not received nor plan on receiving.  I would recommend that you refund the money.

(I never took the time to reply to that statement, but this is what I would have said):

MY REPLY: How are we supposed to provide a service when you don't even show up?  Did you expect us to make a home visit and teach you in the living room?

I thought to myself, "How do two MBAs who are in the business of teaching people how to run their business make arguments like these with a straight face?" 

Were these the best arguments two Business Majors could come up with?  I was starting to feel like they weren't trying very hard.

• I mean, at least the woman could try some variations on the famous axiom "The customer is always right"?   "If you please us today, we will either return at a later date when our lives get a little less complicated or at the least refer our friends to you for dance lessons."
• Or perhaps she would quote an Economics 101 principle like "the cost of finding a new customer is more expensive than making exceptions to keep the current one satisfied."
• Or perhaps she would go Zen and suggest that all good will generated in the Universe is worth the sacrifice and that all ripples of kindness created in the pool of human consciousness would return to give us unlimited prosperity.

I smiled. I was coming up with better arguments than they were.  If the roles were reversed, I wondered what Ms. CV would say to those arguments above.

Hmm. Idea Alert. Something was forming on the edge of my consciousness.

Then I thought, "Just how would Ms. CV reply to a customer who came at her for a Refund using arguments as pedestrian as her own?  How would an MBA handle a problem like this?"

In other words, how would Ms. CV handle someone like herself?

A smile crossed my face. That was a very good question!  In fact, why not specifically ask Ms. CV that very question, albeit tactfully? 

THE PRINCIPLES OF AIKIDO IN ACTION

I smiled as I thought of Aikido - the non-violent defensive Martial Art that uses an opponent's momentum against them by throwing them off-balance as they attack.

I was about to play one of the oldest tricks in the book...
"if you're so damn smart, what would you have done?"

Ms. CV was obviously a very intelligent woman.  Instead of arguing with her, why not ask for her help instead?  I decided to ask her advice in how to solve the problem. 

Furthermore, if truth be told, I didn't really want their money any more.  But I didn't think they deserved it back either.  This money felt "tainted" - if it 'taint mine, 'taint yours either.

I was pleased with my "age and guile versus the confidence of youth" moment.  I had come up with what the Orientals would call a "face-saving" way to give them their money back. 

First I printed our entire email exchange on my web site.  I figured once Ms. CV saw her words were going to be on the Internet for the world to see, maybe she might see how little sense her arguments made and ease up a little.

Or better yet, maybe she would put me in my place with a well-thought out, reasoned "business ethics" treatise.

If so, perhaps she would be willing to offer enlightenment in return for her money. 

Why not give her the opportunity to show me how a real business pro handles situations like this?

If there was a better way out there or there was an error in my thinking, $46 would be a small price to pay indeed.

I was open to suggestions.

AFTERMATH - A MEDITATION ON REFUNDS

Ms CV chose not to respond to my compromise proposal.  OK, that was her choice, but I still have something I want to say.

When I wrote that I had used their Situation as a personal case study on the issue of Refunds, I meant every word I said. 

People assume I hang onto their money without a second thought. Nothing could be further from the truth.  I wish to be fair to ALL parties involved.  Sure I would like to give people their money back. No one enjoys a self-image as a Scrooge.  You have my solemn vow this is the truth.

That said, I cannot run a business when we are expected to dole out money every time someone changes their mind.

I did not take business classes in college, much less go to Business Graduate School.  I was basically a Philosophy major in college, a revelation that probably doesn't come as much of a surprise to any of you reading this story. My training taught me to examine every side of an issue, then decide what path to take. As a result, I don't have the luxury of "Certainty".  There is no such thing as "Right" in my world. I would be lying if I said I did not sometimes doubt the fairness of my own Refund policy.  Watching people get angry and furious at you has a way of testing one's self-confidence.

Perhaps this helps explain why I actually cared so much about what the MBAs thought. "Doubt" to a Philosopher is the same thing as a chink in the armor to a Warrior. It is an opening that can be exploited. When two people who command respect and quite possibly possess greater knowledge than you challenge you directly as the MBAs did, I would be a fool not to sit up and pay heed. After all, "Business" was their turf (they were the professionals, I was the amateur).  Maybe they knew something I had never considered before.

After all, I did not have access to classes that cover the do's and don'ts of common business practices such as "Refund Policies".  They did. 

So when I asked Ms. CV to give me her opinion on my business policy, I was completely serious.  After all, I decided on my studio's policy pretty much by myself.  In my attempt to be an "ethical businessman", over the years I have re-examined my policy many times and come to the same conclusion every time.  But maybe I was missing something!!

The toughest opponents I had ever faced - two members of an Elite Business School - were challenging my business policy as strongly as it has ever been tested In fact, they showed total contempt for my policy. I stood my ground because I "felt" my position was fair, but that didn't keep me from worrying.

There is always room for doubt. Like Father Damien in the "Exorcist" who was forced by the Devil's onslaught to question his Faith, their blunt attack gave me pause for thought.  That is why I asked them to explain their position.  I openly admit I was curious to see what someone with more training had to say about such an important problem.

MY WORDS: Once you have observed first-hand how I view the problem, I would be grateful if you would rely on your academic training to tell me where my thinking is wrong. 

If you think I was being tongue in cheek, I wasn't.  I meant what I said.

xx
My Side of the Story. Based on Ms. CV's status as the Assistant Director of a prestigious MBA program, I was actually taken aback by the woman's position. I figured a person with advanced business training would understand the problems that a small business such as mine faces at least better than the average person.

That's the long of it, but the short story is: the MBAs changed their minds.

PEOPLE CHANGE THEIR MINDS ALL THE TIME!

Everyone knows this. But what sense does it make to allow our business to lose money every time someone changes their mind?

“A lot of decisions in the business world have an ethical component, particularly when there are conflicts between the goals of the customer and the company."

Do the Astros give back money in the 7th Inning when they are ten runs down?  Do movies give back money when you don't like the plot twist in Hour Two?   Do MBA programs refund tuition when you ask to drop out in the middle of the semester?

Of course not. 

So why do people expect SSQQ is any different?  Use it or lose it.

People enjoy dancing, they want to learn to dance, they like our teachers and they like our classes, it's great entertainment... But let's face it, the moment something more important comes along they are outta here!

People dump SSQQ Dance Classes in a flash. That's one of the reasons students like our parallel classes... it gives them more flexibility to squeeze SSQQ into their busy lives.

However, unlike food, water, shelter and oxygen,  dance classes are regrettably expendable.  They are a "leisure time" activity. 

This means the moment something more important or more interesting comes along, dance classes get put on hold.  And since during a month's time something is bound to happen, there will be times when life gets in the way of every student's dance career.

Here is a perfect example of what I am talking about:

-----Original Message-----
From: J/M H
Sent: Tuesday, January 17, 2006 1:18 PM
To: dance@ssqq.com
Subject: exception request

Rick,
Something came up. Mary and I are registered for Beg Western Swing (again) this month. We were able to attend the first week, but will not be able to make the remaining classes this month. Is it possible for you to allow us to use this month's tuition next month? We would be very grateful. I hope you can do this for us.

See you around your studio!   JH

I looked up his class history. This man has taken Beginning Western Swing five times. And now he wants an Exception so he can take it for free a sixth time. 

That's what I am talking about... students who change their mind.

Dance Classes get dumped whenever something more important comes along... And - since Dance Classes are not vital to existence - they get dumped all the time.  And the moment things at work ease up or they fall out of love, BOOM, back on our doorstep again. And you know what? - I don't have a problem with that!! I have a problem when people expect us to jump through hoops the moment they change their mind. I have a bigger problem when they suddenly think they deserve their money back.

SSQQ has a strong "No Refund" Rule for the simple reason that I will not allow the business to be disrupted EVERY TIME any one of our 1,200 students a month CHANGES THEIR MIND. 

We aren't like some dance studios that make you sign an expensive contract. Nor do we sell hundreds and hundreds of dollars worth of dance packages. 

We sell one-month dance classes at a very reasonable price. People say all the time, "Gosh, Rick, your classes are cheap!"  Although we prefer the word "affordable", that's right, our classes are cheap.

You can drop that kind of cash on a dinner date at a good restaurant in the blink of an eyelash.  Dinner for two at Pappadeux's is easily $40/$50. More if you throw in margaritas.  You wait half an hour, the food is great, dinner is over in 45-60 minutes, get your doggy bag, you leave happy.

A movie is two hours.  $9 to get in, $9 popcorn/coke, take a date.... $36.

Dance class at SSQQ is wait ten minutes in line, complain mightily, pay, get 8 hours of classes (24 hours if there are parallels), free practice nights five nights a week.   $46 for men, $38 for ladies...good exercise, nice people, good laughs... average charge $5 an hour.

So that's right.  Stacked up against other simple entertainment activities, our dance classes are cheap.  Plus all these great Refund articles are included free of charge.

However, the classes are also "expendable".  And people change their minds.

But with $30,000 in overhead per month, we intend to use your money (which we appreciate greatly, by the way) to help us stay in business whether you show up or not.

Based on the rules we have established, when you sign up for a dance class, you are making a non-verbal contract with us that in essence says:

"I acknowledge that no one at your business forced me or tricked me into coming here.

I think I am interested enough in dance to show up at this place 4 times in a 30-day period. I understand if I lose interest for any reason or something more important comes up, I can take the class over again at a later date.

But if I choose to stick around after one hour of my first class, I won't get my money back no matter how much I kick, scream or holler. That's the risk I take."

Over 30 years, I estimate 40,000 people have come to our studio and have accepted our ground rules. The vast majority had a perfectly good time while they were here. Most people get exactly the dance training they came here for and some even meet the love of their life in the process. The overall good will towards SSQQ is phenomenal.

And then there are people like the MBA couple who sign up for classes late, transfer to another month, email back and forth, go on a trip and don't get back in time to make their first class. Then they decide it isn't worth the bother, maybe they can fake the first dance at their wedding, maybe someone else showed them a couple steps.  Whatever.

The point is:  Dancing is now expendable. 

So the MBAs say,

"Give me my money back! I paid for something I didn't get. No one read my mind to tell me what the rules were two months ago."

Mind you, these are Business Graduate School people talking like this, future leaders of our community, whining their heads off over $46!

And I say,

"A Deal is a Deal. Classes were held whether you showed up or not. Use it or Lose it.  If you had bothered to look, you would have seen our Refund Rule. But because you were only risking $46 for something you thought you needed at the time, you weren't worried about the Refund Rule. That's not our fault nor is it our problem.

And by the way: You are welcome to reschedule your class for a third time if you wish."

Does it make you wonder what sort of Business Principles are taught at this program? 
Maybe they specialize in the "Enron School of Thought".

END OF RANT

At the right is a picture of the "House Rules" part of every SSQQ Walkin and Online Receipt.

ROUND FOUR: SHOWDOWN At the "Retrieval and Chargeback" Corral!
July 2005

If you read all of my rant, you may have lost track of the story somewhat.
Here is a quick review.

Got your seat belts on?  OK, let's finish the story.

In Email 12, I made an offer to refund Ms. CV's money in its entirety if she would be willing to share her academic training with me to help me improve my business. 

Ms. CV did not take me up on my offer to issue her a Refund. But that didn't mean she quit trying to get one.  Instead she tried a back door trick.

Ms. CV went to her bank and filed a complaint about SSQQ Dance Studio.  Whatever she told them worked. The bank decided to issue her a full $46 refund on her credit card.

I learned of her actions in the middle of July 2005. This was just one month after Mr. JT's eloquent parting shot ("games games games"). 

I received a notice in the mail informing me that Ms. CV had been issued a credit card refund by her bank in this matter. In other words, she already had her money.

This meant we were going to have a Showdown.

END GAME - Well, take a guess who won? 

Four days after I sent in my fax, I learned by mail that the Arbitration Board had reversed the bank's decision.

I won.

They thought my rules were fair.  A Deal is a Deal.