Amazon’s Kindle Owners’ Lending Library has been getting a lot of buzz since it was announced last week, and rightfully so. I posted my own thoughts about it as a publisher on the O’Reilly Radar blog; click here to read my opinion and the community feedback. Some supporters of the program have mentioned it will be a great way to try before you buy. In other words, borrow the book for a week or two and if you like what you read you’ll probably want to buy the book, not just borrow it. I can see that happening…sometimes. But I don’t think that’s the best way to encourage more ebook sales.

First of all, each of the ebook vendors offer samples of books. I always download and read the sample before I make a purchase. Samples have saved me from making a number of bad purchases. But I’ve often found the samples are way too short to tell whether the book is right for me. That’s where an unconditional, money-back guarantee should come into play.

That’s right. Why not have a no-questions-asked, complete refund option for all ebooks? I’m not talking about the return-it-within-seven-days-of-purchase Amazon offers for Kindle content. That’s not good enough. I want the reassurance I can get a full refund if I buy it today and don’t even start reading it till a year from now but then decide it stinks.

Is that crazy? We don’t think so at O’Reilly. Here’s a link to The O’Reilly Guarantee. You wont’ find any fine print with exclusions that limit your right to a full refund. Btw, as the publisher at O’Reilly I can tell you I see all the email exchanges between customers and our customer service team. Very few people ever ask for a refund. In fact, our customer service team sometimes offers refunds when customers don’t even ask for them and most customers reject the offer.

It’s interesting how this works. We stand behind our product with a very simple “absolute satisfaction” guarantee. And believe it or not, customers aren’t banging down our doors asking for their money back. Why? I think it’s the same reason why we’ve been so successful with our DRM-free stance: We trust our customers. Pretty novel concept, isn’t it?

By forcing you to make your product return within 7 days of purchase that retailer is telling you they don’t trust you. Perhaps they assume you’re a speed reader and are just looking for a free ride by gaming the system and reading a book in less than a week. That’s too bad. A little trust goes a long way. Will some customers abuse the system? Absolutely, just like they do with DRM-free content. But the vast majority will not only do the right thing, they’ll also become more loyal to you because you trust them.

Via Joe Wikert’s Publishing 2020 blog


  1. O’Reilly’s reference market and the entertainment market are very different areas… and its consumers act differently. If consumers knew they could read a book, like it or hate it, and return it for a refund anyway, just because they could… I know what I’d expect a significant portion of the market to do. Maybe I’m being a cynic, but consumers seem hardwired to take advantage, especially when it saves them money. I’d expect to see producers watching helplessly as sales become refunds in weeks to months, resulting in significantly smaller profits over time.

    I think better sampling is the answer to this issue. One area where online samples are lacking, compared to browsing a book before you buy, is that samples are generally of the front of the book only. An ability to scan through any part of the book would be better (limited, possibly, by the number of total pages sampled, instead of limited to the first X percent of the book).

    As I’ve said before, we’re still early in this ebook era, and a lot of production, sales and usage methods still need to be worked out.

  2. The people who would cheat and return a book they enjoyed or got good use of can just get the book free on a torrent anyway 90% of the time, so you’re not really loosing sales. If anything you are better off as you at least get to earn interest on the purchase price in the meantime!

    I’d never return a book I read and liked. When novels become a more reasonable $3 to $4 each, its not even worth my time filling out the refund forms etc. anyway!

    I kinda wish I actually needed some O’Reilly books just so I could support their business model.

  3. Kristen, just wondering, do you think Wall-mart and other major stores should cancel their 30 day return policies? Lots of people cheat those systems, which has real costs for the store. Do you think they should cancel the money-back guarantee from a moral standpoint regardless of the loss of profit that would mean?

    A full refund policy makes huge sense for ebooks. You make customers feel comfortable making the purchase, and returns have zero actual cost. Yes, you have the potential to lose the sale, but if they don’t buy because they’re not sure they’ll get their moneys worth, you lose the sale for sure.

    The business model has to be “can we make enough to be profitable” and not “how much could we make in a perfect world?” All businesses have operating loses associated – spilled food, injured workers, external theft, internal theft, returns, billing errors etc.

    Publishing has entered a new age where they have to accept that “If our content is good, it will be available for free somewhere” and build a business model based on that fact. This is not to say they can’t work against piracy – just that the business model must accept that for the foreseeable future it exists.

  4. A 30 day return policy will not ruin Walmart. A lifetime return policy would.

    If an author offers a lifetime refund policy, I believe that could work. But if Amazon offers this on all the books and ebooks its sells, it’ll make a mess, especially if enough people abuse the system.

    Just consider this for books – I get paid Kindle and print royalties 2 to 4 months after a month closes. This allows for store and reader returns, and then my distributors can pay me. We’re done. But what if readers could return these books at any point after that? Book retailers might decide to hold royalties for much longer because, otherwise, they would have to send out bills for returns. For a full time author like me, this means at any time in the future, our employer could demand a refund of our salary. Now, I know in reality the refunds would probably be a very small percentage, and refunds now with the 2 week return policy don’t hurt authors, but if people could simply return all their books, the payment might become a desposit. Amazon has introduced lending, so it’s logical to think readers might evolve toward lending books or buying and returning if that option exists. So in short, I’m only saying a lifetime refund works best if offered by individual authors, in my opinion.

  5. Even a 30 day policy has the potential to ruin Wal-mart. I imagine if 50% of customers returned just 50% of items they bought within 30 days, Wal-mart would be bankrupt within a year.

    I could see the Author system working 2 ways. 1, the publisher takes the risk and money is never clawed back from the Author. 2, the Author sells directly and takes the risk, but it should be a far lower risk, as there is a more direct, and probably informed, relationship with the reader.

    But you’re still ignoring that fact that if the work is good, it’s going to be available for free anyway. You’re talking about the risk of people who decide to pay for something over stealing it in the first place, later on taking the time and trouble to try to get their $4 or $5 back. If that % of people is high, maybe you shouldn’t be writing for a living 🙂

    I fully understand it would be worrisome having an income but never knowing what % might be recalled at some point, but there are a lot of jobs like that. Plus, with inflation the potential loss diminishes over time. 🙂

    Anyway, I doubt any publisher would force the refund be paid by authors.

  6. Steven Lyle Jordan, you are correct that they are different markets. However, here are the two most salient points as far as I’m concerned:

    1) O’Reilly has DRM-free titles in multiple formats, offers frequent updates, and is overall a well-liked publisher due to their policies. People don’t abuse O’Reilly because, like Baen, they are one of the “good guys”.

    2) There is an easy way to prevent chronic abusers: refuse to do business with them. Do you think Best Buy requires identification for returns for giggles? If you are a bad customer, then perhaps you should no longer be a customer.

  7. As a library user, I think you’re wrong about people borrowing a book and then buying. Any book I check out from the library I either read or abandon within the time of the checkout. I’ve never purchased a book I’ve read from the library and can’t imagine ever doing so. For some time now my library checkouts have been agency priced books that are IMO too expensive. I read them for free and will never buy them. If I could get everything I want to read free from the library, I’d never buy anything except books from about half a dozen favorite authors that I reread. I bet there are a whole lot of library users in the world like me.

  8. Not borrowing a book and then buying, buying and not returning. If their aim up front is to borrow, they will go to a lending service from the start if it’s available. If it’s not – then you are failing to provide a service the customer wants (to pay a low fee to read the book and return it).

    My understanding of the system could be wrong, but I’m pretty sure you totally paid for the books you got from the library – via taxes (unless you pay no taxes I guess). It’s the ultimate no-refund allowed system!

    I always felt the library was for 4 things. 1 – making book available to kids without the $ to buy them who would grow up to be readers who paid for books and supported authors. 2) a place to find books no longer stocked in stores. 3) by sharing books, titles would be made available that would be far too costly to sell in stores due to the low sales volume. i.e. it makes low demand books affordable. 4) Society helping provide books for those who couldn’t afford them.

    ebooks takes care of items 2 and 3 completely. Super low volume sales are virtually as profitable per book as high sales volume titles and every book is always in stock.

    Item 4 – maybe we still need that? However year by year the number of books in the public domain will soon mean that nobody really “needs” to buy books (novels at least).

    Other than as a type of “museum”, I think libraries are pretty much done (as a needed source of literary material). They will be replaced by ebooks in the public domain, the web in general, low cost subscription services (access our catalogue for $10 a month a’la netflicks), and lower cost books in general. I say this as a person who grew up loving libraries.

  9. Only a limited number of titles are currently available as an ebook. Over 30% of my reading list isn’t in ebook format. Fortunately, the library had them available … either in-house or through inter-library loan.

    As far as public domain, current laws in the US prevent new titles from entering it until 2019 and that is only for titles published in 1923. And we’d have to wait 30 more years until Lord of the Flies or even The Lord of the Rings become PD.

    Returning an item to Walmart is not the same as an ebook to Amazon. With Walmart you have to package it up with receipt and drive to Walmart. Stand in line and speak to the Customer Service person. For Amazon, a few clicks or a phone call.

  10. Maybe if authors could do what Wal-Mart does about losses through refunds: Take it off of their taxes, and recover some of the losses from the suppliers (who get the product returned so they can repackage and resell it).

    Like so many things ebook, comparing them to physical products isn’t the way to go. New models are needed, and in this case, the refund idea–based on physical products–is probably not workable here.

  11. But you don’t need to recoup any “losses”. It’s just sale that never really happened. Wal-mart gets to claim some of the loss against taxes, but you’d get 100% of your income tax back.

    It’s just a problem of having to bank the proceeds for a while until you have enough of a track record to know how much its safe to spend.

  12. I imagine the rate of return after a year would be pretty low. But if as an author you feel it’s an unacceptable risk, I can understand that.

    I expect most buyers would find a 1 year return policy as appealing as a no limit policy, and far better than 30 days.

    Still also the option for the publisher to accept the risk in return for the perceived value.

    There is also the “pay me if you want to” model a.k.a. “donation” some will consider. It’s like the reverse of the any time refund.

  13. Fbone – I’m talking about the market of the future here (i.e. 2 to 10 years away). Every day a greater % of books become available as ebooks. Good books faster than bad books (in general).

    The passage of time is not the only way for a book to enter the public domain. An author can put it there as soon as it’s written if they want, and many do. And it’s a virtuous circle (from a reader standpoint) as the more good books are PD, the harder it is to sell a book for $.

    I’m not saying this is good or bad – as it depends on your point of view – but like all the cheap stock photography now available that put a lot of professional photographers out of business (or into a new business) it’s a fact of life.

  14. Any return period over 30 days just isn’t practical-

    What if the author’s and/or publishers have already spent the money?

    This is like asking people in their 30s to pay back $500 they made working at Burger King when they were teenagers.

  15. The “donation” model likewise proved untenable. People just didn’t bother to pay for products they’d downloaded.

    Entertainment media is not a “satisfaction guaranteed” business. Customers choose entertainment based on prior experience with a writer, actor or director; but it’s basically a crap-shoot whether or not you’ll like the product.

    Reference products like those O’Reilly sells are one thing: Their quality can be measured by informational accuracy. Entertainment products, not so much.

  16. Re Peter – I work for a large Publisher. I’m pretty sure they don’t even have the money showing on the books within 30 days of a sale, let alone be able to spend it. If an author has to wait the several months (or years) it takes to write a book and get it on store shelves before they make any money (not counting those who get an advance), is waiting 1 more year before they spend any profit really that extreme?

    I’m not at all suggesting this is a good model for all authors. I was really just suggesting it could work for SOME authors. That it’s not a model that should be completely written off (so to speak).

    Re Steven. Donation may be untenable so far – but I don’t think that means it will never be an option.

    — disclaimer — my aim is not to suggest anyone is “wrong” merely to put my thoughts out there and see what comes back that may change my view on things. Despite any appearance to the contrary, I have internalized all the comments made here so far and value them all as valid viewpoints. Some have already modified my thinking to some degree.

  17. Many authors of the major paper-based publishers look at their royalty statements and check out the line called “reserve against returns.” After all, we publishers can’t be expected to pay royalties on books that are returned, can we. Traditional publishers have formulae that allow them to estimate how many of the books they’ve shipped will be returned, and gradually adjust these to account for actual returns (or lack of returns). So, if any eBook can be returned forever, what type of reserves should we predominantly electronic publishers compute? Why not assume that all books will be returned. Surely, when a reader dies, his/her heirs will rightly view his/her library as an asset of value. Why not return all of those books for a full refund? My father’s reading taste was nothing like my own–I had no use for most of his library. Of course, as Steve points out, in fiction, most books are one-time reads anyway (once you know who the crook is in a Nero Wolfe book, for example, you don’t need to read it again). So, why not get an immediate refund and buy another book with the savings? As a publisher, I’m thinking 100% reserves against returns???

    Bottom line, I think this is a notion that hasn’t really been thought out.

    Rob Preece

  18. I’m probably in the minority of authors who would feel this way, but I wouldn’t mind if my books were sold with an extended guarantee so long as it was handled gracefully by the publisher and/or retailer. What I mean by this is that I would not have to directly pay back any royalties directly, and instead it would be held against future royalties. Further, after some initial grace period, whether 7 days or 30, give the customer their refund in the form of credit toward a future purchase. Even if the customer spends their credit right away, the money from their original purchase has time to accumulate extra interest for the publisher and/or retailer before royalties are paid out. I’d also expect there to be monitoring provided to flag customers who abuse liberal return policies and return an unusually high number of books.

    So let’s say I sell 100 books and 10 of those are returned after I’ve already been paid my royalties. (Right now my return rate is about 1 in 500 on Kindle with Amazon’s 7-day guarantee.) And let’s say I sell 100 again during the next royalty period. Deduct those 10 returns from my next royalty statement and pay me for 90. I would be completely fine with that. Should I ever not be selling enough to compensate for the royalties lost to returns, then that’ll be a signal to me that either the system is being abused or I seriously need to reconsider selling that title.

  19. I would like to know what percentage of Kindle books can we buy and return, without getting flagged as breaking some unwritten policy?

    Yes I would like to pay a fee to rent an e-book for 2 days. So much easier than the library. My son will spend $100 on books per week, if he has the money in his account. As customers we are definitely interested in a rental program. If it does not exist, then yes we are tempted to return e-books to amazon.

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