Commercial retailers love the holiday season almost as much as kids do because they receive the best present possible: a flood of revenue streams. The holiday season alone can account for 60% or more of any business’ annual sales profit. The convenience of online shopping and customers trending towards the at-home shopping experience means that merchant accounts will become extremely active with many transactions. Unfortunately for merchants, there’s a grinch out there waiting to steal your holiday spirit and revenue: merchant chargebacks.
Verifi Inc. reports that alongside rising sales volume, merchant chargebacks can increase as much as 50% during the holiday shopping season. Chargebacks are a lot more painstaking for merchants than a lump of coal as they mandate the merchant to provide transaction documentation including proof of delivery and rules that can be different depending on the credit card network. With such a high volume of transactions occurring, many merchants choose to shrug off chargebacks during the holiday crush. Merchant chargebacks at their core are costing your business revenue.
Chargebacks can occur due to a number of reasons. If a customer makes an online purchase but chooses to return the product there is a high likelihood of a chargeback. If the customer doesn’t understand the specifics of your return policy or restocking fees they will be highly likely to contest the transaction creating a chargeback. An easy way to prevent chargebacks due to partial refund confusion is to ensure all your customers know your business’ policies explicitly before they make their purchase.
Ultimately, the best way to fight an avalanche of chargebacks threatening to bury your holiday revenue stream is to treat each chargeback as an opportunity to prevent future chargebacks. With chargebacks, the old proverb “fool me once shame on you, fool me twice shame on me” truly applies. Analyzing and identifying the source of a chargeback will help you address the problem and prevent it from recurring again at a later date. You only get one chance to respond to a contested transaction to result in a chargeback, and sometimes the chaos of the holiday shopping season can create abnormalities in document filing preventing you from producing the critical information to prevent the chargeback.
Instead of expending resources over and over again fighting chargebacks, expend your energy and effort in preventing future chargebacks. By practicing preventative methods you can save your business revenue in the future and ensure a profitable holiday shopping season.