With the holiday shopping season fast approaching, stores are hiring seasonal workers, Black Friday deals are being advertised, and everything is becoming pumpkin spiced. Like all other merchants, ecommerce companies are also gearing up to take advantage of the huge and ever-growing e-commerce segment of this season’s shopping. These etailers, though, face one problem which offline merchants don’t – the threat of card not present (CNP fraud) biting into their holiday revenue and annual profits.
Of all the tips available on the web for maximizing ecommerce revenue this holiday shopping season, one critical area which is consistently overlooked is a smart strategy for minimizing the declines of legitimate online orders while at the same time cutting losses due to chargebacks (including their fees, penalties, and secondary costs arising from disputing them).
Don’t Reject Cross-border Shoppers
More and more consumers are growing comfortable shopping online with an overseas retailer. This is even true for shoppers who live in countries where Xmas isn’t generally celebrated – if the internet doesn’t stop at an international border, then online deals don’t either. Although expanding internationally may see scary, this is one way etailers can edge out their competitors and capture market share in new regions. There’s a whole world out there of international customers with disposable income.
Yet unfortunately, that pool of potential revenue is often squandered when the fraud prevention systems merchants use reject legitimate international orders mislabeled as fraudulent due to indicators such as missing AVS info, billing-shipping address mismatches, and foreign IP addresses. While these data points would clearly be compelling red flags for domestic orders, they are very typical for legitimate cross-border orders. Riskified, a vendor offering a fraud protection for ecommerce solution which is automated and built on machine learning, is an example of a new breed of companies that can seriously upgrade your fraud prevention game, allowing you to safely approve a lot more overseas orders.
Also, as a result of the large influx of legitimate shoppers, fraud rates for international ecommerce orders during the holidays are significantly lower, because the percentage of fraudulent orders doesn’t surge alongside the legitimate ones. This decreased fraud rate is another reason why online merchants are at increased risk of falsely declining legitimate orders during this time.
The costs of falsely declined international online orders quickly add up to plenty of money left on the table. First, there’s the immediate revenue lost (i.e. the value of the declined order). Second, there’s the lost lifetime customer value, since consumers who have been falsely declined due to suspected fraud are very unlikely to return to that merchant. Third, each falsely declined cross-border order is another lost opportunity to establish and expand market share in a new region as well as build good buzz through an excellent customer experience.
Furthermore, falsely declining international orders will hurt you well outside of the US holiday shopping season? Consider missing out on the online shopping bonanza that is China’s Singles Day (November 11th). Bah Humbug.
Invest in and Execute an Omni-channel Strategy
Online ordering combined with in-store pickup is a potent combination for holiday shopping: it combines the convenience of online shopping with the quick product acquisition of shopping in a physical store. As an added plus, consumers have to enter your physical storefront, thus giving you an opportunity to generate additional revenue from impulse buys – leveraging those in-store specials and strategic product placements.
When refining your omni-channel strategy, make sure your fraud prevention solution can extend into these digital channels along with you. Pay especially close attention to how well it deals with mobile orders, since many common features of legitimate mCommerce orders (like frequently changing IP addresses) can be mislabeled as fraudulent by many less intelligent systems.
Fraud prevention can be a revenue-generating asset for ecommerce all year, but especially for retail’s make or break season. By safely approving orders which would have otherwise been declined, robust fraud protection empowers you to expand into new overseas markets and across channels.