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Expert opinion

How to protect your Christmas profits from lethal chargebacks

Wednesday 8 November 2017 | 08:15 AM CET

Monica Eaton-Cardone, The Chargeback Company:The easier it is for a customer to secure a refund, the less chargeback trouble it will cause for the merchant. 

High stocks, low prices, eager customers – the festive shopping season is in full swing. But it is not all just merriment. Monica Eaton-Cardone, CIO and co-founder of The Chargeback Company helps merchants protect their profits against the Grinch of the holiday shopping season – the chargeback.  

Once again, we’re told that ecommerce is going to shine this November. And with a chorus of good tidings chimed from the rooftops – and consumer spending forecast to surge by 47% from last year’s festive season – it’s not hard to see why.

Merchants will expect a tremendous boost to their revenue this Christmas. However, they must prepare for more than just frantic Christmas spenders. Consider what comes after the initial sale boom.

Counting down to Christmas

Most merchants go into the festive season with ample stock and high hopes, but also overlooked hurdles. We know that strong logistics and glad tidings go hand-in-hand, so it’s not surprising that inefficient processes are causing an inflation in customer frustration. Woefully, nearly half of all online shoppers have complained of stress as a result of an inept ecommerce experience – a 6% increase from last year.

Contrary to popular belief, loss of repeat customers is just one detriment to an online merchant. As specialists in this field, we recognise that lack of joviality when shopping online can really hit their bottom line hard. And it all comes down to the chargeback.

Harmful chargebacks occur when unauthorised transactions are processed or when goods or services haven’t been received, are damaged or were wrongly advertised. To restore money into their rightful hands from a substandard or fraudulent order, customers may feel there’s no choice but to turn to their bank and file a chargeback.

While the public eagerly awaits their first drop of mulled wine, merchants need to ensure that goods/services, payment, delivery and fraud detection processes are up to scratch; otherwise, it could cost them dearly! Each year, the procedure costs merchants a whopping GBP 80 billion – a figure that increases 20% annually.

Grabbing the reindeer by the horns

For online orders, an effective anti-fraud strategy can help protect all parties involved. Normally, merchants can detect fraudsters by monitoring user behaviour and transaction history. But during peak sales periods, Christmas shoppers defy their habitual behaviour.

Those who make few purchases over the year, suddenly order a family’s worth of gifts in a matter of days or weeks. Because of this, standard fraud software can struggle to tell genuine orders from bogus ones.

Authorisation volumes have been recorded to surge a massive 100% or more on Black Friday. As they increase in number, they trigger more unusual spending fraud alerts that need to be cleared by the fraud analyst. This causes chaos within the payment process and can mean a huge headache for merchants and consumers alike.

Empty stockings

If fraudulent purchases go under the radar or gifts are delivered below expectation, consumers will have no choice but to seek reimbursement from their bank. That is, unless merchants offer an accessible refund process. Forget the turkey; remember one simple rule this Christmas: The easier it is for a customer to secure a refund, the less chargeback trouble it will cause for the merchant.

If an issue falls under merchants’ liabilities, then they will subsequently be fined, the money will be removed from their account, and the stock – and stockings – may not be replenished.

No place for complacency

By considering the potential detrimental outcome and sagely preparing the tools at their disposal, merchants can do great things this Black Friday. With minimal losses and a plethora of merry customers, merchants will be laughing through to 2018 with higher-than-expected margins – and relief at having eradicated pesky scheme, fines and penalties!

To find out how The Chargeback Company can help your business protect itself from chargebacks, visit: thechargebackcompany.com.

About Monica Eaton-Cardone:

Monica Eaton-Cardone is an international entrepreneur who provides sustainable revenue retention and risk reduction solutions to the ecommerce environment. She is the co-founder and COO of The Chargeback Company, known as Chargebacks911 outside Europe.

 

About The Chargeback Company:

The Chargeback Company, known as Chargebacks911 outside Europe, provides comprehensive and highly scalable solutions for chargeback compliance, handling services and fraud strategy management. The company helps decrease the negative impact of chargebacks, thereby increasing revenue retention to help ensure sustainable growth for every member of the payment channel.

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