Q: Why won't races offer refunds for injuries? Also, what's the deal with deferring your entry?
A: Most races do not allow refunds or deferrals. If you run enough races, one of these policies will likely impact you at some point. It happened to me in 2010. I was registered for the New York City Marathon and a combination of bad training and injury left me unable to race. New York has a deferral program, but it still requires the forfeit of all registration fees. So, the only perk was a guaranteed opportunity to run the following year. (I had to pay the registration fee again).
From the perspective of the race director, unless a race sells out very quickly, there is not much difference between a refund and a deferral. Both eliminate revenue from the current year budget. Races that sell out quickly, however, often can allow for deferrals if the requests are made early enough.
A long time ago, it became common for races to offer runners a discount on registration if they registered several weeks or months in advance. This is a deal that is struck between the runner and the race. The runner agrees to take on the risk that they may not be able to (injury) or may not want to run the race on race day (i.e. rain or poor training). In exchange the race gives a significant discount on the registration. For many races that discount can be as high as 30-40%.
This is helpful to races because many of the materials for a race require prepayment and/or need to be ordered weeks or months in advance. Last spring with the strikes at the Long Beach Port, races had to place orders for medals 4-5 months in advance. So race directors needed to guess how many medals they needed and pay for them that far on advance. Early registrations help with that.
Refund programs may be something you see coming in the future. Runners have greatly changed the shape of races in the past 10 years. If you ran the Broad Street Run 10 years ago you would not have received a medal. Back then, your t-shirt would have been cotton at most races and there were no bands. That same year most 5ks would have been timed using bib tags. Runner demand changed races such that now races of all distances feel they have no choice but to have chip timing, medals and tech t-shirts. (Or impress runners with even more swag and perks.)
At this point, whether to offer refunds or deferrals is largely a business decision. If races offered refunds they would have to have a way to both administer a refund program and replace the lost revenue. The question is whether runners are willing to pay up front for the option of a refund? It is a question I do not know the answer to. If refunds become a part of races, the cost of those refunds will be built into the registration fees, just like the costs of medals, bands, chocolate or high-end swag are now parts of the registration fees.
Currently, there are insurance companies that will sell you a policy that refunds your registration fee if you are injured. But, though many of my friends are runners, I know of very few people who have ever purchased insurance. Most runners who register early are doing so, at least in part, due to the discount. If runners are not willing to purchase insurance in significant numbers, I am doubtful that they will be willing to pay increased registration fees to cover refunds for other runners. So, for now, I expect the status quo to remain. Runners who register early will get a nice discount. But, they will take on the risk of not being able to run. Since the vast majority of runners who register do make it to the starting line, most will be willing to take that gamble rather than pay more to hedge their bets.