February 13, 2018
By Jared Ronski, Principal at PayArc
For e-commerce merchants, Valentine’s Day can be a welcome cure to the post-holiday blues. Sales numbers spike after a typically slow month, but so do the risks associated with higher-than-normal volume.
Namely chargebacks and fraud: both of the “friendly” nature and the less friendly. Whether it be legitimate customers who simply missed the mark at playing Cupid, or fraudsters seizing yet another opportunity to cash in, Valentine’s Day can break a merchant’s heart if they’re not prepared to prevent and properly deal with costly chargebacks.
Here are six ways to alleviate the headaches on Feb. 14:
Implement Strict But Fair Policies
While you want to avoid becoming a target based on your business’ willingness to accept and generously resolve disputes, you also want to limit customers’ propensity for initiating disputes while remaining fair and open-minded. The best way to do this is by implementing a policy that will successfully protect your customers who have legitimate claims, but stick to a consistent process that first and foremost protects your business from the bad actors.
The most successful merchants build trust among their customers through extremely detailed and up-front communications with regard to their terms and conditions. Be sure not to bury anything in the fine print that may cause confusion on the shopper’s part. Research has proven that the majority of consumers will seek out clear–and fair–return and shipping policies, and move on to the next site if they are not to their liking, or worse, not readily accessible.
Make Customer Service a Top Priority
Chargeback issues are often the direct cause of poor customer service. Ensure that your products and services live up to the promises that you make as a merchant. Have an easily navigable payment process that also includes, at a minimum, the standard security measures. Send email confirmations of orders and shipments, and require signatures on all order deliveries.
Utilize Chargeback Prevention Tools
Especially important on gift-giving holidays such as Valentine’s Day, or if you’re operating in an industry where chargebacks are frequent, it’s imperative to explore specialized chargeback solutions. Some providers offer near real-time alerts from cardholder issuing banks that enable a merchant to assess–and address–a dispute before it turns into a chargeback. This will save you time in the long run, reduce your operating costs and protect your profits.
Use Address Verification/Card Code Verification
Harness AVS within your payment service so you can ensure that the address the credit card user enters online matches the billing address of the purchaser–the actual card owner who will be charged. It’s also a good idea to make sure the billing address matches the IP location of the person entering the order. You’ll find that many e-commerce platforms offer security protocols to automatically recognize suspicious IP addresses or discrepancies.
Keep Meticulous Records
One way to stay ahead of friendly and unfriendly fraudsters alike is to ensure that all receipts are tracked and recorded carefully. You may not win every battle but if you can establish a reputation for the painstaking record-keeping of your online enterprise, even the most seasoned cybercriminals will think twice before targeting you a second time. There are plenty of merchants who make themselves easy marks for fraud due to their lackadaisical bookkeeping practices, so let the criminals prey on them instead.
Jared Ronski is principal at PayArc and works with merchants to ensure they are paired with the right merchant account for their specific business needs. He has worked closely with higher risk business models and has provided companies of all sizes with payment processing solutions.