Why January is chargebacks nightmare for retailers

Ecompromo | February 13, 2019 | Web Marketing

What looks like booming business in November and December often turns into a mountain of returns a few weeks later, challenging balance sheets and threatening profits. January has traditionally accounted for 51% of a retailer’s returns. In 2018, there was a “first wave” of returns, with over 1.3 million parcels via UPS returning to merchants in December, with a second equally large number being returned by January 3rd. About $94 billion worth of goods are expected to be returned this holiday season

Traditional returns aren’t the only revenue pitfall retailers experience after the holiday season. Merchants also see a rise in friendly fraud — when customers initiate refunds by claiming a legitimate charge is fraudulent — and these claims are costing retailers $11 billion yearly.

Although preventing every return and chargeback is impossible, the first quarter of the new year doesn’t have to be a balance sheet disaster. When merchants understand why customers are filing fraudulent chargebacks as a way to reverse purchases, retailers can better protect their growing online business.

How Returns Can Transform Into Chargebacks

It’s nearly impossible for merchants to predict which transactions will result in chargebacks. However, understanding the top reasons customers file them invariably helps …read more

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