Merchants typically generate 40 percent of their annual income during the holidays, according to payment processor and card-not-present (CNP) solutions specialist Litle & Co. To guide ISOs and merchant level salespeople (MLSs) on the best ways to help merchants maximize profits during the coming holiday season, the processor advises on how to prepare for chargebacks, defend against friendly fraud and offer alternative payments to boost sales.
Bob Botelle, Chief Customer Officer at Litle & Co., suggests that merchants develop a baseline of chargeback activity during the entire year, then work with their processors to formulate operational efficiencies to absorb and manage higher volumes of chargebacks that normally occur during the holidays.
"At Litle, we work with our merchants on all of their operating processes," Botelle said. "Some chargebacks they have no control over, obviously.
However, we can help merchants fine-tune their shipping, order review and customer service processes to make sure they're looking at orders over a certain dollar amount and if the 'ship to' address changes, for example. It's imperative merchants have more of a manual review process during the holidays."
Botelle said that in the CNP world, higher ticket items like jewelry and high-end electronics have a much greater fraud rate than most other products, especially during the holidays. He suggests merchants can prevent chargebacks by calling customers to verify high-ticket purchases.
Botelle noted that changes to card information - such as new cardholder personal information or reissued cards with new numbers - have increased significantly this year, most notably due to the myriad acquisitions and mergers of financial institutions. ISOs and MLSs can help merchants with value-added services to address those concerns.
"Visa and MasterCard provide a service called Account Updater, an automated, dedicated and secure clearing house that makes changes to cardholder account information available in real time," Botelle said. "Our recurring and installment-based merchants can send us a file of all the cards they're going to bill each month before they send them out.
"We send that information into the card associations and get back updates - whether the expiration date has changed, if the account is closed or if a new card has been issued in the same portfolio with a different number. All the recent data breaches have severely impacted online merchants, so we've found it's been a great program - and the merchants love it."
To further prevent chargebacks and fraud, Botelle also advises that:
Botelle believes, however, that the best remedy against chargebacks and fraud is simply consistent, high-quality customer service. "Sites that ship fast, have the lowest prices and give the service people are looking for should do well this year," Botelle said. "You can buy the same product on a dozen different sites, so merchants should make sure their Web site and checkout page works as smoothly as possible."
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