The marginal cost of the stereo is probably over a hundred dollars. The marginal cost of a drink and of a software license is zero. If your customer for some reason can’t use the previous license due to unforeseen circumstances, just give them a new one that they can use. If you lose your license key, most software vendors will give you a new one too.

> The margical cost of the stereo is probably over a hundred dollars

> just give them a new one that they can use

It always rubs me the wrong way when a customer decides what value something has to a business, assuming they know everything about the business' incomings and outgoings, assuming they know the size of the business, assuming that all businesses must operate the same way because some businesses have the flexibility to offer acts of goodwill.

It makes the assumption that all businesses, especially in software, are on equal footing. They very much aren't. Sorry, but the customer can't always be right — the business has its own bills to take care of, employees to pay, rights to licence, and lights to keep on; beyond what the customer paid for, it really doesn't have any further obligations. Good will is exactly that: good will.

The marginal cost of a software license is approximately zero. And selling an extra license due to a lost device is a windfall, from an already paying customer, that would not have occurred but for the lost device. People will interpret that intuitively as the business taking advantage of them.