During the festive season, consumer spending habits vary wildly from their usual behaviour. This erratic change of credit card usage means that it becomes much harder for standard fraud protection software to detect and prevent fraudulent credit card activity. As a business owner, this can be detrimental for your company. If a credit card was used fraudulently to make purchases of your goods, you could be hit with chargebacks.
In this day and age where many consumers outsource their everyday life (particularly at Christmas time) and use their credit card to do so, credit card security is big issue. This year, ecommerce merchants are expected to experience a 47% increase in sales than last year. Don’t let this good news lull you into a false sense of security. Unfortunately for online vendors, the costs associated with processing chargebacks is also increasing. In fact, chargeback costs are increasing by around 20% each year. In 2016 alone, ecommerce stores lost over £80 billion in chargeback costs.
In order to keep your profit margins high this Christmas, you need to prepare for the inevitable chargebacks that your business will have to process. By upgrading your fraud detection processes, you can reduce the number of fraudulent sales your business processes and therefore, reduce the number of chargebacks you will need to reimburse.
Fraudulent sales can be damaging to your business in more ways than one. Not only do you lose money dealing with charges and loss of stock, but your business’s reputation can take a hit too. If customers leave bad reviews of your website letting other customers know that your store failed to detect fraudulent activity, it can put other potential customers off making a purchase. Online security is of the utmost importance when dealing with credit card information so consumers only want to use websites that they can trust.
Preparing for chargebacks means more than just improving your fraud detection systems, it also means streamlining your refund process and fine tuning your customer service. If a customer can come to your company directly for a refund rather than making a claim through their bank, you can reduce your chargeback expenses by avoiding fines and charges from banks and credit card providers. Consumers will be looking for the easiest way to recoup their losses, especially in the busy Christmas period, so you need to make sure your customer service team are trained to reimburse fraud victims quickly to minimise their frustration and bad word-of-mouth.
Don’t get caught out this Christmas, use a professional chargeback service to reduce your chargeback expenditures and protect your business.