I have a customer who is demanding a refund for a purchase made in August 2009. Usually my approach is to give refunds without a quibble, even if they are outside of my 30 day no questions asked guarantee period. I'd like to give this guy a refund too but my payment processor doesn't allow refunding CC charges past 90 days so my hands are tied.
What should I do?
Edited to add: I am in Australia, they are in the USA.
If you want to send a refund just write him a check. Or use paypal. Or anything else.
Be creative. You can also offer to pay for a gift card to amazon.com or other vendor.
How about just cut the customer a cheque?
Your hands are not tied, you just can't refund their credit card. This doesn't mean you can't refund in some other way.
You have added that you live in Australia, so sending a cheque is no good. You can refund the customer by Pay Pal, but I would speak to them and explain the situation and that you are willing to refund, but you need to know which payment method is convienient for the both of you.
Don't let rules like this determine your business practices. If there are restrictions then create a system to work around it. I personally find it infuriating when a company tells me they can't do something because of a policy they have. Standing out and going the extra mile is what makes you stand out from the crowd.
Try to give them the refund electronically instead of writing a cheque. An Australian cheque will take weeks to clear an American bank account and the bank could hold the funds until it clears.