Gabe McGloin, Head of International Merchant Sales and Business Development at Verifi

Although the Christmas shopping season starts earlier every year, the transaction frenzy really begins with the sales juggernaut of Black Friday and Cyber Monday. According to an Adobe Analytics survey, 70% of responding consumers planned to shop over this year’s four-day period beginning the day after Thanksgiving. For the second year in a row, Cyber Monday edged out Black Friday as the “go to” day for online deals, with almost 10%* more respondents preferring Christmas shopping on the one day most workers normally dread.

‘Tis the Season for Big Numbers

As one might expect, the number of online Christmas transactions continues to grow along with the pound volume per transaction, peaking during Black Friday/Cyber Monday. With increasing sales continuing until the following Friday, the term “Cyber Week” is gaining traction. Since Thanksgiving is falling a week later than last year, the shopping during this period is expected to be especially heavy.

Per the Adobe Analytics survey, current sales estimates for the Christmas period, Nov 1 – Dec 31, put digital dollar volume for domestic spending at £110B, with an estimated £7.3B attributed to Cyber Monday alone.

In this whirlwind of Christmas transactions and distractions, you can be sure there’s likely to be a stormy fraud season as well. Add fraud and disputes into the mix of the happiness and merriment, and the hard-earned revenue of the season can be somewhat eclipsed, leaving businesses with a case of the Christmas chargeback blues.

Maintaining Due Diligence in a Transaction Tornado

As a merchant, how can you mitigate fraud risk and provide your best customer experience, while processing many times the transactions of an average day? It’s a delicate balancing act, to say the least. With stringent fraud detection in place, a merchant can still be subject to false-positives and declined valid sales. With loose fraud prevention, merchants can let fraudsters through and soon find themselves in a deluge of disputes and losses.

Historically, many Christmas transactions may come from new customers with no history of patronising your business. Now is the time to shore up your fraud and chargeback prevention program – and even expand your client base in the process.

Multi-Layered Fraud Prevention

Consider these solutions and best practices to ensure risk reduction and help build customer loyalty by providing a secure buying experience.

• IP intelligence:Deep analysis of the IP Address used for the transaction to monitor possible risks associated with the location
• Device fingerprinting: Identifies devices that attempt multiple transactions to the same merchant and make it look like they came from different IP addresses
• Address Verification Service (AVS):Verifies the address connected to the cardholder using a comparison look-up
• 3D Secure:Uses a three-domain model to validate credit and debit card purchases.
• Account and card information is replaced with an encrypted, one-time token identifier
• The location of the cardholder and the customer are compared
• Secure Sockets Layer (SSL):Provides a secure encrypted communication between customer devices and websites where sensitive information is input
• Merchant Co-Op: Transactions are compared against a list of orders, looking for matches with fraudulent accounts
• Monitor express shipping transactions:Fraudsters exploit this delivery type to receive goods before fraud can be detected.

An Easy Way to Reduce Chargebacks

It’s fair to think many purchases made during this time of the year will be given as gifts. Sometimes the people who receive these gifts can’t use them, or don’t like them, and will want to return them. So, in order to help keep chargebacks from popping up like mushrooms, ensure that your return policy is clearly posted and acknowledged. This will not only reduce disputes but support a hassle-free return experience and maybe garner some new customers.

Return Policy Suggestions

• Implement a longer return/refund window:Consider using a laxer return/refund policy duration for holiday purchases
• 24/7 customer service: Maintain extended customer service staffing and hours for the duration of the extended return/refund policy. Encourage customers to contact customer service with any problems
• Proactive communication: Follow-up with customers who made purchases during the holidays. Remind them of the extended return/refund policy and provide the customer service contact information
• Wiggle room:Merchants who allow their customer service team to use their best judgement with returns/refunds may experience greater customer satisfaction and brand loyalty. Trust the customer service team to be flexible with the rules when it makes sense – especially if a chargeback is the only other option for the customer
• Promote your return/refund policy:Merchants would do well to promote their post-holiday return/refund policy just as they promoted their Black Friday and Cyber Monday sales