I offer an unconditional refund policy at my service business, and I've had to deal with the same feelings. In my case, I would often spend a few hours working

I offer an unconditional refund policy at my service business, and I've had to deal with the same feelings. In my case, I would often spend a few hours working personally with the client, only to refund their money afterward. However, I continue to offer the policy because my refund rate is low (about 1-2%) and the increase in sales due to the policy is substantially higher than that. The way that I see it, giving out a few refunds is a cost of doing business, and I don't begrudge refunds any more than I begrudge taxes, merchant fees or rent increases. Looking at refunds mathematically takes some of the pain out of paying them. I'm also somewhat comforted by the fact that a refund policy is a way to resolve genuine client dissatisfaction: In my view, giving refunds to undeserving people is far preferable to clients actually leaving dissatisfied and possibly badmouthing my company.