Are You Ready for the Holidays…and for What Comes After?
The holidays are officially underway, and it’s a great time to be in the eCommerce space; every year, more and more consumers decide to skip-out on the madness of the malls and big box stores, opting instead to shop from the comfort of their couch. If you’re like most online merchants, you’ll find these last weeks of the year are hectic—but the payoff is worth it.
Experts at Deloitte expect consumers to spend as much as $149 billion online during the 2019 holiday season. That’s an 18% increase over last year’s total. To make the most of this opportunity, though, you need to be prepared ahead of time. Otherwise, the holiday shopping boom could very easily turn into a bust.
“Chargeback Season” is Right Around the Corner
Here’s a fact that could make you feel somewhat less jolly: roughly one-third of all the chargebacks your customers will file in 2020 are likely to come in the first few weeks of the year. This seasonal chargeback uptick is a regular, annual event, and it directly corresponds with other trends we’ve observed in the industry.
Our internal data shows that the majority of disputes occur between 45 and 60 days after a transaction. That makes January and February the unofficial “chargeback season,” as customers attempt to reverse transactions made in the weeks leading up to the holidays.
There are plenty of reasons for this; for instance, in cases of genuine fraud, customers might not notice a transaction until it shows up on their credit card statement. Or, your customers might get that first statement of the year…then start to sweat when they see the total. Buyer’s remorse sets in, but they can’t return gifts and items they’ve already used, so they file chargebacks instead.
Consumers are going to return roughly 15% of all goods they purchase online during the holidays. In some verticals, such as apparel, that figure could be as high as 30%. And when cardholders really want their money back, they a find way to get it…even if that means committing friendly fraud.
Fortunately, there are several measures you can take to prevent these and other loss sources from draining your hard-earned holiday revenue. Even though chargebacks are a post-transactional threat, the secret is to be prepared ahead of time. With that in mind, here are our top five holiday hints to help protect your revenue, even long after the decorations come down:
Fast & Friendly Service
You’re busy during the holidays. We get that…but your customers probably don’t. In fact, the stress and pressures of the holidays can make consumers even less tolerant of service that doesn’t live up to their standards. You have little choice but to up your game in response.
The first point is to cover your bases by providing live, around-the-clock customer support across multiple customer service channels, including phone, email, and social media. Research into consumer buying behaviors reveals that 42% of customers who contact you for support via social media expect a response in less than an hour. Of those shoppers, three out of four expect to hear back in 30 minutes or less.
Answer all phone calls within three rings, and ensure representatives are thoroughly trained for handling customer issues in an efficient, pleasant manner. If live, 24-hour service isn’t possible with your internal team, consider contracting a third-party answering service to handle overflow calls.
You’ll also want to set up an immediate autoresponse for consumers who reach out via email. Let your buyers know their message was received, and inform them when to expect an answer.
Give Fraudsters What They Deserve This Holiday
Bad actors deserve a lump of coal…not your revenue. Make this holiday a very merry one with better chargeback management. Click below and get started today.
Optimize Your Order Fulfillment
Order fulfillment plays a major role in helping customers decide to complete a purchase. It can also influence whether that purchase eventually becomes a chargeback.
Free shipping has been found to be the second most significant factor influencing your customers’ decision-making. 49% of buyers would be enticed to complete a purchase if free shipping were offered.
Of course, free shipping isn’t always feasible; that’s why it’s best to offer a variety of shipping options. This allows consumers to select the method which works best for them. Other practices you should adopt include:
- Communicate with the fulfillment department. Work to create order processing timelines that will satisfy customers, but also be realistic to achieve.
- Create shipping cutoff dates with each carrier.
- Publicize shipping deadlines. Make sure customers know the last possible day they can place an order and still expect a delivery before Christmas.
- Send confirmation emails immediately after ordering to let customers know when the item will ship and when it should arrive.
- Adhere to all deadlines. Don’t make exceptions or promises that you may not be able to keep.
It’s also important to note that 17% of consumers who file chargebacks do so claiming that the ordered products never arrived. Using delivery tracking not only helps reduce customers’ fears of delayed arrivals, it also gives you solid proof to dispute any bogus claims of “undelivered merchandise.”
Have the Right Fraud Tools in Place
Fraud is a multifaceted problem. There’s account takeover, clean fraud, affiliate fraud, cyber shoplifting…just to name a few threats facing your business. No one solution can address every fraud tactic. That’s why it’s important to embrace a multilayer approach that combines multiple complementary tools, including:
- Address Verification Service (AVS)
- 3-D Secure 2.0
- CVV Verification
- Fraud Scoring
- Velocity Checks
- Device Fingerprinting
Obviously, this isn’t a comprehensive list: as quickly as technologies change, fraudsters develop new tactics to manipulate them. In response, new tools and strategy updates are constantly necessary to protect one’s business.
Be Prepared for Returns
Even if you do everything right, there will inevitably be some of your sales that become returns. Losing out on a sale you thought was already secured is unfortunate…but it’s still much better than a chargeback.
A return will cost you sales revenue and shipping fees. A chargeback, on the other hand, means you also lose the merchandise, plus pay added fees and higher long-term costs. You may even end up losing card processing privileges entirely if your chargeback situation gets out of hand. That’s why it’s best to make the return process as easy and painless as possible.
Your policies and procedures should be clearly-written, and easy-to-find from any page on your site. They should be reasonably flexible, giving customers a sufficient window of time to receive, try out, and then repackage and ship returned goods.
If you have a restocking fee, consider waiving it for consumers who accept non-transferrable store credit in place of a cash return. Or, try offering buyers 10-20% extra value on their return if they accept store credit, essentially giving them a bonus for doing the right thing. This will stave off chargebacks, recover sales revenue, and give customers a positive brand impression.
Seek Outside Help
Few things are more important than acknowledging when you need help. That’s especially true here: while the tips outlined above will help you minimize chargebacks, there’s only so much you can realistically do on your own.
Our research suggests that between 60-80% of all chargebacks are probable cases of friendly fraud. Unfortunately, while speeding up shipping timeframes and simplifying returns can avert some of these incidents, there’s no reliable preventative measures to stop all of them. And, once customers commit friendly fraud, the only way to recover your revenue is through representment.
Chargeback representment is a confusing process. It requires in-depth knowledge of ever-changing payments industry regulations, international policy, complex card scheme rules and processes, and much more. Managing chargebacks effectively is a full-time, year-round job…the holidays just make it a lot more complicated.
Now’s the time to act. Don’t let your holiday sales become costly liabilities once New Year’s rolls around. Contact Chargebacks911® today and put your holiday chargeback prep in the hands of the industry’s most trusted chargeback experts. Only Chargebacks911 offers a performance-based 100% ROI guarantee: if you don’t save, you don’t pay. Click below, and make this your jolliest holiday shopping season yet.