Chargeback fraud, the fraudulent request for a return or refund in the form of a chargeback, is an unwelcome cost of doing business for many merchants at the best of times, even more so during the holiday season, when many businesses look to make the majority of their sales.
UK consumers are expected to increase their spending over the festive period by 5% year-on-year, despite increasing interest rates. This will add nearly £4bn to holiday sales, taking the expected seasonal spending total for 2017 to £78.7bn.
Merchants want to take advantage of this surge in interest and consumer spending, while protecting their businesses from potential fraud. And customers want to make purchases in a fast and easy way, while comforted with the knowledge that their payments are secure and their products will arrive as described.
Customers shudder at the thought of multiple data screens, onerous password requests, and numerous email confirmations when making a purchase – and they will often be put off a purchase by the process alone. With online shopping cart abandonment rates at an average of 76.9% in the UK, it is more important than ever to ensure a smooth transaction process.
While a frictionless payment process may be the panacea for many customers, it can create a feeling of being in purgatory for merchants – with limited customer data and a finite amount of interaction with the customer leading to fears of chargeback fraud, and the overriding fear of being unable to protect your business.
The fine line that exists between being too demanding (too many layers to your fraud prevention system) and losing your customers at the cart stage, to not having sufficient detection methods in place, is one that is vitally important and one every business must straddle.
Fraudsters are becoming increasingly savvy when it comes to taking advantage of a business, and are likely to strike at the time you expect it the least. For that reason, there are a number of preventative steps that you can take to protect your revenue from chargeback fraud this holiday season.
Protecting your revenue from chargeback fraud
Customer service – Good customer service can make or break a business. One negative customer experience can ruin a business-customer relationship, and is almost certainly followed by customers sharing their experiences with friends and colleagues. Loyal customers are less likely to file a chargeback.
Merchant descriptors – Unknown names are a sure-fire way to starting off the chargeback process for many customers. Clear billing descriptors that are easily correlated with a sale can help to take the strain off your customer service team dealing with potential chargeback fraud
Returns Policy – A successful refund policy should clarify key questions. Is a product suitable for return, how long does the refund policy last, and is the customer eligible for a full refund or store credit?
Shipping Info – Provide customers with a date or estimated date of arrival. This helps to prevent the customer from filing a dispute, should they become frustrated over the delay of the item’s arrival. If possible, provide a tracking number and shipping confirmation email for the customer.
Documenting conversations – Clearly display customer service contact information on the website. Depending on the product or service, a chat window can be useful to immediately answer customer questions. Respond to emails as quickly as possible, and be forthcoming about any issues that may contribute to a slow order delivery, mistaken delivery, etc. Also, keep a record of these conversations to further protect the customer and your interests
Arming yourself with the right tools can go a long way to boost your profits, and, more importantly, protecting your business from chargeback fraud this holiday season. Using a solution such as Verifi’s Order Insight can help to address potential chargeback fraud before it becomes a major problem for your business.