Black Friday is just one of many major shopping days on the way over the next couple of months, and while retailers of all shapes and sizes are looking forward to the sales boost the holidays can provide, a number are also worried over the looming increase in retail chargebacks they may be susceptible to.
Both Black Friday and Cyber Monday helped online retail sales hit the $1 billion dollar mark last year, which is set to be eclipsed by eager shoppers again this year.
Consider Nasdaq’s recent Q3 2017 report for online eCommerce expert Mercadolibre, Inc. though. The company is growing at a fast pace and going from strength-to-strength; its user base growing by 20% year-on-year in the second quarter of this year.
Despite the good news and strong momentum Nasdaq believes that Mercadolibre’s margins are set to be under large pressure because of the investments the company is undertaking. Among its most major investments are reducing chargebacks and fraud prevention costs.
How to avoid seasonal retail chargebacks
Reducing retail chargebacks will be a necessary investment for the company in the long-term though, not only to hold onto their profits but to do so in a way that doesn’t alienate customers and keeps them happy should a financial dispute ever arise.
Slowing down or negating retail chargebacks entirely isn’t something that can be done overnight. No one business is ever the same, and while some may need small tweaks to reduce the amount of chargebacks they receive, some may need a total overhaul of their overall company culture in comparison.
Keep in mind too that there are external cultural shifts to consider too, with ‘friendly fraud’ on the increase thanks to the ease of making a chargeback; something that 86% of cardholders do whenever they have a payment dispute with a company, which can harm retailers in numerous ways.
Luckily there are things that business owners can be doing right now to reduce the amount of retail chargebacks they receive, including:
- Being transparent with shipping policies: Sometimes chargebacks happen because people get nasty surprises with shipping costs or they feel their items have reached them in an unreasonable amount of time. How easy is shipping information to find on your website and is everything laid out in a clear, transparent way?
- Simplify your returns policy: Similarly, do people know what the best process is with your business when they wish to return an item? If the information is buried under a lot of jargon, is hard to find or simply unreasonable then shoppers will feel within their rights to issue a chargeback instead of using it as a last resort.
- Improve your customer service: Sometimes shoppers just want someone to talk to when they have a problem. The spread of social media has also raised shoppers’ expectations in this regard; is your customer service team up to scratch both online and over the phone? Do you have an in-depth FAQ page for common queries and is your team easy to get hold of to resolve a dispute?
These solutions only scratch the surface. Find out what else you can do to vastly reduce retail chargebacks for your business and keep hold of profits by contacting Fibonatix’s specialist financial team today.