Preparing for card acceptance during the holiday season
‘Tis the season that can make or break a merchant’s annual sales forecast.
This year, as always, the financial stakes are high this holiday season. Retail sales are expected to grow by nearly 5% up to $1.1 trillion, a new record, according to Deloitte’s holiday sales forecast. E-commerce sales for the same period are forecasted to grow between 14% an 18%, reaching as much as $149 billion.
All that shopping translates into more card transactions – and more potential for fraud and other glitches that can stand between you and a profitable year. To help minimize card-related payment issues, there are things you can do today to prepare.
Consider increased payment alternatives. More than two thirds of online shoppers abandon their shopping carts without making a purchase. In some cases, it’s because the shopping site will not accept the shopper’s preferred method of payment. Whether in-store or online, today’s consumers want to call the shots on how they pay.
As an alternative to traditional credit cards, many now prefer everything from debit cards, prepaid cards and gift cards, to digital wallets, phone and mobile payments. Consider adding alternative payment methods to give your customers the options and convenience they seek.
Tighten your security. Fraudsters deliberately target the holiday season, which is why more than half of card fraud takes place between September and December each year, delivering a serious blow to your business, resulting in the temporary shutdown of your system and lost revenue during a critical sales time.
You can minimize fraud risks by upgrading your website and point-of-sale equipment to include the latest security protocols. Using EMV (chip and pin) card terminals in your stores and CVV (3-digit code) match and AVS (Address Verification Service) features in your online payment gateway are an important place to start.
Take steps to limit chargebacks. One of the challenges with fighting fraud during the holidays is chargeback lag. Roughly two thirds of chargebacks are due to fraud, and the rate of chargebacks – situations where disputed charges are returned to a consumer – increase up to 50% during peak shopping periods. Because merchants won’t be notified of all their 2019 holiday season chargebacks until the end of the first quarter of 2020, it is almost impossible to track chargeback fraud in real time. That’s why it’s better to prevent it in the first place. To help minimize fraudulent transactions and the financial toll they extract, consider:
Pay special attention to foreign transactions. In an online world, your customer base is more global than ever. That’s why you may benefit from developing protocols that help weed out potential international fraud. Before completing large or high-value orders, consider verifying your customer’s billing and home addresses. For first-time or overseas customers, consider conducting an online identity search or requesting a photo ID. Your protocols may also include validating overnight and rush orders to catch bogus purchases before they are shipped.
Prepare for peak times. Black Friday and other peak shopping days place high demands on payment processors. Double check with your processor to confirm it provides constant uptime for transactions and a secure payment gateway that encrypts customer payment information. Increase your own customer service availability during these period as well. In addition, don’t use the hectic season as an excuse to take shortcuts. Settle all transactions at the end of each processing day, or more frequently, if needed.
The bottom line: The holiday season is a critical time for merchants. If you are unsure if your card system is ready for it, consult with your card processor on how to get through the rush with as little disruption – and as much financial success – as possible.