More and more people are turning to online dating sites amid a pandemic thanks to the lockdowns and stay-indoor rules.
In mid-March, websites like Dating.com announce in a Press Release in PRNewswire.com that it had recorded a surge in the number of new signups at the start of the month.
But more new customers often come with excessive chargebacks, fraud and refunds. And in the worst case lead to merchant accounts shutdowns.
The Challenges & How to counter them
Though dating sites are welcoming an inflow of customers, merchants are facing different challenges amid a crisis.
- No-more one-on-ones
Pre-pandemic, internet sites were just a linkup point after which dates met in person. But due to the novel coronavirus, users are no longer willing to meet strangers one-on-one. Merchants must now change their offerings to maintain the prospects they attract.
Remedy: To counter this, merchants have leveraged tech by providing video chatting solutions for a livelier interaction.
According to a post featured in DirectPaynet.com, US dating businesses are the most affected and have so far recorded “chargebacks rates nearing 1 percent.”
Naughty customers use services then come begging for refunds and reverse charges (chargebacks). And from past experiences, most of these reverse charges are unjustified.
Remedy: Dating merchants must follow best practices to avoid chargebacks. Here are some tips;
- Give a quick refund or suggest a different offer immediately to prevent the situation from escalating into a chargeback
- Offer unswerving support. Customers will file chargebacks if you ignore them repeatedly.
- Build a clear refund policy
- Keep financial records for future reference
- Identify stubborn customers and block them
- Identify and curb fraud before it happens
- For a recurring subscription, notify customers upfront and send multiple reminders before deductions
Lastly, keep records of interactions with clients to use as evidence if any customer files a chargeback for a legit charge.
In the meantime, fraudsters have been working the midnight shift to enjoy premium dating services without paying for it.
Remedy: Use the latest anti-fraud technology. Also, be PCI compliant to safeguard client payment information.
- Age Verification
Adult sites should not onboard minors, yet some still try to sneak their way in.
Remedy: Ask for a client’s photo ID during signup.
- Payment Processing Problems as Processors tighten rules
Banks and payment enablers have been changing rules due to the impacts of COVID-19. Qualpay, for instance, no longer process transactions for high-risk merchants—and many other firms like Square have announced new rules.
Some of those policy changes will lead to high-risk merchant account terminations. Such unanticipated changes may affect how you take payments and affect your bottom line
Remedy: Diversify your payment collection avenues. Use other methods like e-checks (or ACH) and cryptocurrency.