you risk a 'run on the bank' if a large group of your customers demand refunds.
Most startups deal with this by putting a ginormous WE DO NOT OFFER REFUNDS FOR ANY CIRCUMSTANCES disclaimer on it. Personally I always hated that so I offer refunds for any circumstances. Since only about 2.6% or so of customers ask for them, I don't need much of a cash cushion at all.
Personally I always hated that so I offer refunds for any circumstances.
Me too -- tarsnap close their accounts and get a refund whenever they like. Not many do; but in the rare case that someone decides to stop using tarsnap, I'd rather refund their money than feel bad about keeping it.
Most startups deal with this by putting a ginormous WE DO NOT OFFER REFUNDS FOR ANY CIRCUMSTANCES disclaimer on it. Personally I always hated that so I offer refunds for any circumstances. Since only about 2.6% or so of customers ask for them, I don't need much of a cash cushion at all.