Effective Education

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Money-back Guarantee

Are you more likely to try something if there’s a money-back guarantee? Chances are you may even feel more satisfied with your purchase if you are offered a money-back guarantee.

Two summers ago, I hiked several hundred miles with my college-age son on the Appalachian Trail. I didn’t have any gear when we started to plan the hike, so I went to REI, the outdoor gear store. REI has a simple rule on returned gear: “100 Percent Satisfaction Guaranteed.” What a great comfort for someone who wasn’t really sure what equipment he needed. I bought almost everything for my hike at REI. I was sold on the quality of their merchandise and of their expertise. I was willing to try equipment that I was unsure of because I knew that they stood behind their products.

Here’s an idea. If a money-back guarantee is such a valuable marketing tool, wouldn’t it be interesting to see how it could work in a neighborhood? It is common knowledge that when people perceive a school as “bad,” the reputation of the school can also hurt the surrounding neighborhood. Families avoid neighborhoods when they think that the assigned school isn’t good enough for their children. It happens even when the quality of instruction isn’t really a problem.

The fact is a school’s reputation might not reflect the school’s reality. It’s hard for parents to assess the true quality of a school that their child is not yet attending. For example, schools with more low-income children are almost certain to have lower test scores than schools with more affluent families. But sometimes the learning gains are actually greater in the school with a poorer student body. If families could give the school a try, they might find that there are great programs and great teachers eager to teach their children.

So, what if neighborhood schools could offer a money-back guarantee of sorts? “Try our school this year, and if you don’t like it, you can have your education dollars to spend somewhere else!” What incredible marketing that would be for the school and the neighborhood! Families would be less likely to avoid these neighborhoods. They would be more willing to try out a school that had a money-back guarantee. When a school doesn’t offer a money-back guarantee, you can only depend on the school’s reputation, which might be outdated or based on flawed stereotypes. It’s hard for schools to provide good information on the quality of their product. Even Amazon, which spends hundreds of millions of dollars trying to improve the customer experience, can’t deliver reliable data on customer satisfaction. They know that the average Amazon product doesn’t really deserve 4.4 stars.

Fortunately, fixing the information problem can be one of the great things about Education Savings Accounts (ESAs) which can act like a money-back guarantee. When families know that they can access an ESA if they don’t like their assigned public school, they will be more likely to choose to live in places where their assigned school’s reputation is “less-than-stellar” (literally meaning “no stars”). Providing ESAs to families in poor neighborhoods allows families to give schools in these neighborhoods the benefit of the doubt, and try them out. Families may discover that the educational services provided there are exactly what their child needs.

Assigned public schools always have higher spending levels than the amount available from a regular ESA, so it’s easy to assume that some public school programs must have superior qualities to what could be purchased independently with an ESA. But if parents discovered that the programs that a child needs are not available in the neighborhood school, they could turn to the ESA to cash in their money back guarantee.

As you can see, it would make sense for policymakers to allow families to access ESAs if families are willing to live in areas that have a reputation for bad schools. They could even potentially call the schools in these neighborhoods “money-back-guarantee schools” in their marketing. Families would be willing to move to or stay in those neighborhoods, and try out those schools if they knew that their child’s education was guaranteed.

Would the public schools in your community have enough confidence in their services to offer a money-back guarantee like ESAs? Would you be more inclined to consider a school district that offered one? Food for thought.