I know most of you don't deal with pattern sales online, but recently I've been having a moral quandary and would like some opinions on the issue.

The short version:
What happens when a customer buys a downloadable file (ie. a puppet pattern), but doesn’t actually download it and doesn’t complain about the location of their product? Am I supposed to refund the money, or can I keep it? What is my legal and moral obligation?
I went and asked for some advice from a local lawyer and was told that so long as I attempt to make contact with the customer, and have records showing this, then I am not liable and I can keep the payment. (I double- and triple-checked that last bit of the sentence) But I’m still wondering about the moral obligations…

The longer version is explained on my blog:
http://www.puppetsinmelbourne.com.au/blog.php/2012/08/17/abandonment-a-case-study-of-customers-who-don-t-download-their-files

Anyone have any opinions on this? How do you deal with customer issues in terms of refunds?

Sounds to me from reading the full story that you have made every attempt to contact these folks. That is way beyond what most people would do.  I feel you have met your moral obligation and should let it be.

The only suggestion I can offer and even this may not help things is to make it very clear up front when they are buying the pattern that it is a hard copy and the they will receive an email with a link. Let them know what email/host they need to white list in order to insure they receive the email.  More then likely you have already done that and I know full well that folks still do not always read. 

I've gone to great lengths to try and make sure that one an email is sent after registration and that they need to validate and still end up with folks who do not activate their accounts. Granted some or robot spammers but I can tell that some where most likely legit. Go figure.  

There is only so much we can do.

I've tried various methods of making the 'download only' info obvious. I've always kept it right at the top of the page, right next to the link to purchase (as well as info below in the 'features' section which states "no waiting for the mailman to deliver it".
http://www.schoolofpuppetry.com.au/tutorials.php/how-to-make-a-muppet-type-puppet-human-foam-puppet-pattern

I've often rearranged things, and over time, added capital letters, bolding, and the "questions" link to the policy/refunds/etc page.

As with my past issues using Lulu, invariably this problem comes from people who "assume" that it is a hard copy (ie. they seem to be in a rush and don't take the time to read policies... which I find strange because I always read stuff before paying). (Most customers spend less than 10 minutes on the site before buying and never read the policy page)

There's really only so much I've found I can do. (It's unfortunate I can't redesign the Paypal payment page so that it can have the info there as well)

As for ensuring the email goes into the inbox and not the spam, once again, that requires people ensuring they read this stuff.

What has me scratching my head the most is that even if they assume it's a hard copy, or don't get instructions via email... they never contact me about it anyway. I've had customers screaming bloody murder for not receiving info 2 seconds after making a payment, and then I have customers who disappear...

Anyway, returning to my actual question: I know I have done due diligence, but I guess I have an objection to keeping money when I know people haven't received the service they paid for. Perhaps it's because I know I'd be extremely annoyed to discover I haven't, and have been in the past. At the same time, there's a difference between when I've not received what I've paid for, and not *accepting* the item/service due to missing an appointment/typing my email wrong/whatever.

... Which I suppose is the point. A more aware customer reads the info provided, remembers what they paid for, where they got it, and who to contact when it doesn't arrive. And if they're aware of all that, they'll also be aware of when it's their responsibility to follow up.

Still the question is an interesting one, at least for me, because I always equate downloadables as a different kind of service to a physical product: and in the eyes of the law, they're pretty much the same.

Disclaimer: as I'm aware potential customers/former customers can read this... at no time am I thinking that anyone is a fool. I'm more than well aware that life isn't perfect and sometimes we forget to read policies or mis-type an email, or miss seeing important info, or that the layout/design lends itself to missing such info. I just find it very frustrating is all. I like to do right by everyone!

My opinion is this............. and I could be wrong. Would it be unethical to inform a buyer before they checkout that sales of downloaded items, links,etc. are final and buyers are responsible for the download within a certain period of time. I have bought software downloads that had expiration's on them which prompted me to download immediately in fear of losing the link. If I forget to download something within the amounted time then I don't think I deserve a refund just like if I decide that it wasn't what I thought it was then I don't get a refund either.If a good description is given of the item that is for sale then it is my responsibility to ask the seller questions if I'm unsure of that item before I purchase it. My 2 cents worth LOL. 

My opinion is this............. and I could be wrong. Would it be unethical to inform a buyer before they checkout that sales of downloaded items, links,etc. are final and buyers are responsible for the download within a certain period of time. I have bought software downloads that had expiration's on them which prompted me to download immediately in fear of losing the link. If I forget to download something within the amounted time then I don't think I deserve a refund just like if I decide that it wasn't what I thought it was then I don't get a refund either.If a good description is given of the item that is for sale then it is my responsibility to ask the seller questions if I'm unsure of that item before I purchase it. My 2 cents worth LOL.  

I do have this info in my policies page, but not directly on the 'ad' page (link above to the human pattern). I'm not sure if anyone actually reads the info on the 'ad' page - it's hard to tell since you can just scroll down to the info instead of using the links to anchors on that page. But since the policies are on a different page, it's easy to tell that very few people read it before purchasing.

Because of the laws in Australia, I can't say "no refunds". The laws here haven't caught up to file downloads I guess.

Because they're downloadable files (which technically, can't be refunded/returned since you have no way of knowing if the download was successfully obtained or not - Ejunkie only says "attempted downloads", not "successful") I have a policy that refunds are given only as a last resort. Ie. if I can't send you the download I'll send you a CD. I've only refunded once with Ejunkie and that was more out of kindness because their emails (about not being able to download) went missing in my spam folder for over a month and I felt bad for not finding them sooner. -- Of course now I have a reminder set to check my spam box at least once a week, and improved my spam filters.

Again, this info would be great to add on the paypal checkout page itself, but I don't believe Ejunkie allows me to pass through any kind of details like that.... Yeah, I just looked and you can modify the email notification, the THANK YOU page, but not the actual payment page.

On a slightly related note, I don't do refunds on changes of heart, but I do offer exchanges if someone bought the wrong pattern (ie. Round head instead of human, or vice versa).

Maybe I should be putting all this info on the 'advert' page, instead of a separate page? Although even then, I suspect it won't be read...

Ok well I see one thing that I think may be why this happens. I had a look at the page and you have "Grab the first part of the pattern FREE or Grab the COMPLETE pattern (DOWNLOAD ONLY)".  In my browser the ONLY is actually on the next line.

I think I would separate those out more. Separate lines and instead of the "Download Only" text by it self put in that they will recieve an email and have to follow the link.... On that page at least it is not even clear that you have to pay for the download. Granted you say the first part is free but to me it is still kind of unclear.

Actually, the fact that the 'download only' bit is on the same line is because it used to be on the next line down. Ie
Grab the first etc.. or grab the complete etc
(DOWNLOAD ONLY)

The last time (a week or so ago) someone had not downloaded the pattern due to thinking it was a hard copy, I moved the 'download only' up onto the same line. I keep tweaking placement, size, and how much it's in your face... nothing works. (Send me screen res. maybe that'll help) I think I have to face that there's an inevitable minority of people who simply don't see it for whatever reason.

... Having additional info about receiving an email after payment right up the top seems wrong to me. Intuition suggests that kind of info is not what people want to read on a sales page, at least after the very first sentence. ... I don't know, I have to think about that a bit. Again, you have to remember that the large majority of visitors are not actually spending time reading what's on (any) of the pages; that most click away to different pages within scant seconds or minutes; and that I have no idea whether or not they bother scrolling down to read the info before downloading the freebie.

EDIT: Following sentence incorrect, see my follow-up post.
As to having info about the payment - I know it's not immediately clear, but if you click on the link for the complete pattern it does take you directly to a paypal page. I suppose I could change the wording to "buy the complete pattern", but since 90% of the people who actually view the free pattern don't buy it (or click on the paypal link) it seems kind of pointless to me. I'm mostly battling against the issue that people who visit my site are looking for freebies and don't want to pay for stuff anyway. It's one of the reasons why I originally considered making the site membership-only, because I knew that earning dough off the patterns was tough. I figure that putting a price tag on it immediately tells people to click away cause "beware this'll cost you money".

(Note: I also go through various periods where I remove the freebie altogether. I find that having the free part available on a seasonal basis actually improves sales)

Maybe I should change it and instead of having a "buy" phrasing, have the price tag next to the link... checking out Project Puppet's site and I see they have updated their design to something similar. I don't use a cart system since I don't have many patterns and the site isn't structured in a way that easily allows it...

Maybe a price tag that also includes in smaller print, 'download only'.

The fact is that only a small percentage of people who view the site want to BUY anything. (I once read an article by an e-commerce expert who commented that the price is not the issue: the issue is getting people to hand over ANY money at all. Which I find to be true. The price could be one cent, and it wouldn't matter without heavy marketing involved. I can't afford the heavy marketing, and as expected this month I'm selling practically nothing because I'm on a permanent break from updating the site.)

The other thing I have an issue with: how much do I dumb down the instructions? Some people aren't internet savvy, I can get behind solving certain problems for those people. But there's only so much I can do without acting like people can't read or are stupid. I mean, I put the most important info RIGHT THERE IN YOUR FACE... still people don't notice the DOWNLOAD bit. I guess this is mostly why I'm confused: is it bad design, or users are simply refusing to take the time to read?

Lastly... I considered going back to selling CD versions, as I did when I was with lulu. The biggest issue is finding a pressing service, but outside of that I found 95% of people didn't want a hard copy: most bought the ebook.

Thanks for the thoughts Shawn. I think I will try and find some time next week to sit down and see if I can't create a better looking page. I still think that I will hit a wall as to the terms & conditions stuff, but maybe redesigning that top layout a bit will help. Food for thought...

Actually one last point: due to my finances being in severe need of help I've been thinking of running a fundraiser to make everything on the site free (patterns included) with the funds going to pay for X number of years worth of hosting, etc. I haven't had a chance to look into it further though.

On that page at least it is not even clear that you have to pay for the download. Granted you say the first part is free but to me it is still kind of unclear.

Ok, I just noticed something. A case of where is it me or is it you - it quite clearly says further down on the page "A custom made muppet-type puppet could cost you upwards of hundreds of dollars; this reusable pattern is only $24.95 USD and could save you lots of money "

It's the same on the other pattern. The link itself doesn't include price phrasing, but the price is most certainly listed on the page.

This is what I am seeing:

This is what I am seeing:

Yes... but what is your resolution? :P