If you are a small retail business owner with a brick-and-mortar store, you have likely realized that the way people are shopping is changing due to the ripple effect of COVID-19.
As society continues to adapt to the pandemic and a resurgence of stay-at-home orders, online retail purchases have exploded—especially as consumers gear up for the holiday season. In fact, concerns over extended winter lockdown orders in October have already driven a 53% increase in retail e-commerce transactions.
Unfortunately, as more brick-and-mortar retailers are shifting their focus online, fraudsters have more opportunities to scam customers out of their money—which inadvertently increases chargeback pressure and revenue loss on businesses.
If your small business is adapting to changing shopping behaviors and moving to online-focused transactions this year, it is important to know what you can do to prevent purchase disputes and chargebacks initiated by online shopping fraud. To help, Landmark National Bank is here with a few tips on how you can avoid unnecessary loss during these unusual times.
How to Prevent Fraud-Related Chargebacks Online
With so many consumers shopping on the internet this holiday season, cybercriminals have a surplus of vulnerable customers to prey on. Unfortunately, while cardholders are primarily responsible for their own decisions when avoiding fraud, business owners are often the ones taking the financial hit when a cybercriminal makes a fraudulent purchase.
Fortunately, there are three easy things you can do right now to minimize risk and costly chargebacks:
1. Secure Your Site’s Third-Party Software
If your website uses third-party software that is out of date, your internal security systems could be breached—meaning your customer data could be compromised. Whether you use shopping cart software, shipping software, or other programs, make sure all third-party software is up-to-date or patched to the most recent version to keep your site security strong. Not only does this protect your customers’ data from cybercriminals, but it also protects you from chargebacks due to fraud.
2. Create a Clear Merchant Descriptor
While it may sound simple, having a clear merchant descriptor (a line of copy that identifies your business on a cardholder’s account statement) can help eliminate unnecessary purchase disputes. Ambiguous merchant descriptors can lead to confusion if a customer cannot clearly identify the transaction, which means they could dispute the charge with their bank or credit card company and initiate a chargeback.
Make sure to create a clear and concise merchant description that features your business’ name, phone number, or address to avoid confusion during the busy holiday shopping season.
3. Address Customer Service Issues Promptly
It is always a good idea to address customer service issues quickly, but it becomes even more important during the holiday season. If a customer experiences a delay in their return and refund process after shopping online—or has a difficult time contacting you to find out when to expect their refund—they could dispute the charge with their bank out of anger. Worse, if you already processed the refund but failed to address the chargeback promptly, you could be left with double the revenue loss.
Make sure to address all customer complaints, returns, or refunds as quickly as you can, and provide your customers with answers or updates via clear communication channels.
Minimize Chargebacks Caused by Online Shopping Fraud
As a small retail business owner, dealing with chargebacks caused by online shopping fraud can be stressful—especially if this is your first time venturing into the world of e-commerce. Rather than risking revenue loss, it is important to implement the strategies listed above to protect your business from falling victim to fraud-related chargebacks.
In search of a bank that has your business’ back? At Landmark National Bank, we have a variety of business bank accounts and merchant services to meet your needs. Contact our team today to learn how we can help you stay on top of your finances and get to your money faster.The content