In some ways, it’s unfortunate that online shopping grew as big as it did before digital sales platforms could catch up. Just ask many small business owners, especially during the holidays.
Transaction issues like holiday chargebacks run rampant this time of year. Left unchecked, it can seriously affect your bottom line.
Here’s what to look out for when it comes to holiday chargebacks, and ways you can protect yourself this holiday season.
Since the COVID-shopping days of 2020 and 2021 during the holiday season, more and more consumers are now comfortable buying all their holiday gifts online.
According to Juniper Research, companies report an 18 percent rise in monetary losses due to fraudulent events like chargebacks since 2020. More consumers shopping online, which is expected to continue to grow in 2022 and 2023, means a likely increase in chargebacks, too.
Many have noticed by now that “holiday” sales are kind of a subjective thing these days.
Many year-end sales start in November and even October, meaning the number of chargebacks is starting to slowly stretch into an all-Autumn issue. With the number of holiday sales that extend into January, your small business should be on the lookout for a rise in chargebacks as 2023 rolls in as well.
Cybercrimes are the biggest form of fraud facing small businesses in America today, according to the World Economic Forum. Holiday chargebacks may be a minor piece of this shady activity online, but they still add up, especially if this is your busy season.
As cybercrime stats rise, banks and consumers are getting faster at responding to shady activity. One recent trend by would-be thieves is to bulk order large arrays of valuable items. (The logic being that they all get shipped quickly, before the order can get canceled.)
Be on the lookout for odd cart lists with multiple high-ticket items. Maybe someone’s just buying one for everyone in their family—or maybe it’s a chargeback waiting to happen.
Similar in terms of context, but in fact the exact opposite as a strategy, some would-be thieves have learned they can stay under the radar by going small.
One common chargeback fraud is to order small things multiple times, week after week. Again, it might just be a coincidence and someone is stocking up. But taking note of these things can help you fight against trends people use to take advantage of the chargeback system.
What’s your return policy look like? Do you consider it clear and iron-clad? If not, maybe it’s time to beef it up a little.
Refunds and replacements are a better option for most businesses than chargebacks. In most cases, they’ll satisfy a frustrated customer, too. But if your return policy isn’t outlined clearly and communicated, consumers may be more likely to go straight to the credit card company.
Stop holiday chargebacks in their tracks by clearly laying out a return policy.
It takes a diligent eye and patience to catch holiday chargebacks and to prevent them from happening. There’s not a lot of free time during the holidays—but finding an hour or two to review transactions is paramount to protecting your business.
Alternatively, you might consider outsourcing the work to a chargeback management system. You’ll free up time in your schedule to focus on your business and be backed by experts who track, review, and recover lost revenue due to credit card payment issues.
Banks are stuck between a rock and a hard place when it comes to holiday chargebacks. Their job is to protect the consumer, but they know some people take advantage of the system. Whether you use a third-party company to help you dispute charges or not, make sure you understand how your banking partners operate when it comes to chargebacks.
Banks update their policies all the time, and yours might switch to a more consumer-friendly approach that truly won’t serve your small business needs. If this happens, you need to be aware of it before it’s too late.
Contact us to learn more about how our partnership can help you weed out holiday chargebacks and prevent lost revenue.