How to Manage Post-Holiday Returns
This year's Cyber Monday sales have exceeded $2 billion in purchases only made from desktop computers. These numbers don't even include mobile shopping, which has risen substantially. Mobile has broken the mold for anticipated consumer spending as consumers are more connected to shopping opportunities and deals. However, these sales can create a headache once the holidays are over with and the returns start to flow in. Returns, increased customer service inquiries, chargebacks and the potential for friendly fraud are all most prevalent directly after the holiday season.
The 2013 holiday season saw 10 percent of all purchased merchandise returned, with nearly $3.4 billion fraudulent returns. These fraudulent transactions accounted for 5.8 percent of all holiday returns. Returns usually fall into three different categories: online shopper overspending, buyer's remorse or friendly fraud.
The issue is centered around a chargeback process. Filing a chargeback has become an easier and more expedient process than actually contacting the merchant for a return. Consumers have little time to spare, and they look for the instantaneous solution — i.e., filing a chargeback with their bank. This problem is hindered when merchants are slapped with additional fines that could have been avoided by speaking with the consumer directly. Consumers are also unaware of repercussions to their own credit score and the costly fees for banks and merchants.
Merchants should prepare for the onslaught of holiday returns by employing a dispute mediator to seamlessly execute returns in the most efficient way. This ensures a stress-free return service for both consumers and merchants. The mediator supports e-commerce merchants by identifying fraudulent returns and reducing the number of chargebacks by consumers dissatisfied with their holiday purchases.
A dispute mediator is a solution for e-commerce merchants plagued by what the industry refers to as "friendly fraud." This practice involves a customer purchasing a product or service online, then claiming they never received it and initiating a chargeback while they still retain the product. Merchants are at the mercy of banks, which give consumers the benefit of the doubt. This "cyber shoplifting" is costing the retail industry $11.8 billion. It unfairly penalizes merchants which provide consumers promised services and are then taken advantage of.
The distrust between merchants and consumers can be alleviated with help from a mediator. Instead of calling the bank to file a chargeback, consumers contact a transaction dispute mediator to submit their claim for a refund or return. This is a faster process that doesn't incur the costly frees and fines associated with a chargeback. Using a mediator is a kinder approach, with 24/7 customer service to meet the needs of consumers that cannot be provided by most retailers and banks.
The headache of holiday returns can be eased by partnering with a dispute mediation service. If last year's holiday season was any indication, this year will be another record year for product returns. The holiday season is the epitome of the transaction process — consumers are looking to buy more and online retailers are overloaded with products and services.
A clear solution for this holiday problem is to include a dispute mediator who can take control of the situation and satisfy the needs of both parties. And in order for retailers to continue to sell, consumers need to be educated about the true cost of fraud and how it can diminish the providing end of consumerism.
Gary Cardone is the CEO of eConsumerServices, a transaction dispute mediator.
