Chargeback Prevention

Avoiding Holiday eCommerce Shipping and Delivery Disputes

 

It’s the holiday season, and eCommerce orders are on the rise again. This year, online retailers are set to claim an even bigger share of holiday spending than ever, with COVID-19 forcing many consumers to forego shopping at brick-and-mortar stores.

This stands to benefit eCommerce merchants, but it also means that fulfillment centers and shipping carriers are going to be slammed, and don’t forget that fraudsters will be looking to worm in on all this action too. Missing or delayed gift orders can quickly lead to angry customers and disputes. What can merchants do to avoid chargebacks resulting from shipping and delivery problems?

New call-to-actionAnalysts are projecting that when the dust settles on this holiday shopping season, eCommerce sales may be up by as much as 25% over last year. While eCommerce has been on a steady upward trend, that’s nearly double the 13% increase that 2019 saw over 2018’s numbers. A spike that big is likely to catch some retailers and shippers unprepared, and a massive increase in transaction volume gives a lot of cover to fraudsters, to—even before the countdown to Christmas started, all indicators were pointing to a significant increase in eCommerce fraud.

In a year a difficult as 2020, it’s important for online merchants to be able to meet this upswing in demand both for their own sake and for the needs of their customers.

Treating it like any other holiday season, however, could leave merchants dealing with snowballing fulfillment woes, negative word-of-mouth from disappointed customers, and a surge of chargebacks to kick off 2021. Understanding the challenges and preparing for them is essential if you want to protect your revenue and keep your customers happy.

What Holiday Shipping and Delivery Disputes Should Merchants Watch Out For?

Every year, millions of shoppers wait until the very last minute to purchase their holiday gifts. This year, far fewer of them will be rushing to the mall—instead, they’ll be ordering online and counting on their purchases being delivered on time.

The knockdown effects of the COVID-19 pandemic and the lockdowns it has necessitated have caused many delays and logistical challenges for fulfillment and delivery services. This can aggravate shoppers any time of year, but the holiday season comes with built-in deadlines. In many gift-buyers’ minds, if a purchase doesn’t arrive by the gift-giving date, it might as well not arrive at all.

A higher volume of orders means that also many of the evergreen shipping-related disputes will increase commensurately. Overworked carriers may damage items in transit, and consumers in a rush to get their shopping done may find that the product they receive isn’t quite what they imagined. Either scenario can lead to “product not as described” chargebacks.

What Types of Holiday Fraud Should Merchants Expect to Encounter?

Account takeover fraud is on the rise, which means that merchants can’t rely solely on tools and methodologies that look for signs of payment card fraud at the transaction level. Account takeover is a “the fraud is coming from inside the house” scenario where the fraudster gains access to a legitimate customer account and exploits it for their own gain, often by using stored payment credentials to make purchases.Download the eGuide, 4 Reasons to Hire a Chargeback Management Company

One common ploy is to request a change of shipping address after an order has already been placed and screened for fraud indicators. As “buy online, pick up in store” (BOPUS) purchasing options have become more popular, especially in the wake of coronavirus, many fraudsters are rolling up to brick-and-mortar stores and walking away with other people’s purchases.

Many merchants struggle to keep pace with the holiday rush even in normal times, and it’s easy to bypass security protocols just to keep things moving and get orders out the door—and that’s exactly what fraudsters are capitalizing on.

How Can Merchants Protect Themselves from Post-Holiday Chargebacks?

The holiday season is no time to let your guard down. With fees and overhead factored in, the typical chargeback costs more than twice the amount of the original disputed transaction. It’s not hard for a wave of chargebacks to take a huge bite out of a retailer’s holiday profits.

Some shipping and delivery issues are out of the merchant’s control and unavoidable, but there are steps you can take to mitigate these problems.

It’s always a good idea to provide tracking information that allows customers to follow their order’s journey from warehouse to doorstep—that way, they won’t be caught off guard if there are any delays. Free shipping, if you can offer it, can also go a long way towards making customers more forgiving of unexpected hiccups.

When problems do arise, excellent and attentive customer service—and an easy, no-hassle refund policy—can save you from many disputes and chargebacks. Remember that it’s always cheaper to offer a refund than endure a chargeback, and this helps preserve good customer relationships as well.

When things go wrong, it’s not uncommon for customers to engage in friendly fraud by claiming their order was never delivered—signature confirmation and meticulous delivery confirmation records can help you fight and win against these chargebacks.

As for account takeover fraud, don’t make the fraudster’s work easy for them. Strong password requirements and two-factor authentication can make it very difficult to break into your customers’ accounts. You should always look very closely at requests to change shipping addresses after an order is placed and confirm with the customer via verified email or phone. If you offer BOPUS shopping options, be sure to check the customer’s ID when they come to claim their order. in friendly fraud by claiming their order was never delivered—signature confirmation and meticulous delivery confirmation records can help you fight and win against these chargebacks.

Conclusion

The 2020 holiday season has the potential to be the biggest one ever for many eCommerce merchants, but to maximize your gains and avoid January headaches, you have to be prepared to deal with the challenges that come along with it.

With transparent delivery information, generous customer service policies, and the best defenses you can muster against fraud, you can protect both your revenue and your customer relationships—and when chargebacks do occur, signed proof of delivery and other relevant evidence can help you fight back and win.

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