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Are Retailers Ready to Handle Waves of Holiday Sales Returns and Chargebacks?

By Dennis Kaiser

United Parcel Service expected more than one million returns per day in December, and 1.3 million on Jan. 3 thanks to an immense amount of holiday spending in 2018. All of these returns can cost merchants millions in chargebacks and consumer fraud. Disputes and chargebacks caused by U.S. consumer disputes will result in more than more than $31 billion in losses, with merchants sharing almost $19 billion of the overall costs, according to a report, The Chargeback Triangle, by Javelin Strategy & Research.

Suresh Dakshina, president at Chargeback Gurus Inc., an industry leader in chargeback and fraud mitigation services, said that chargebacks have numerous hidden costs. “When it comes to online fraud during the holidays, it’s not just the cost of transaction merchants lose when they incur fraud. It is estimated that merchants lose up to three times the transaction cost, considering their product, fulfillment, marketing and operations costs.”

Dakshina said that balancing chargeback protection with fast approvals can be daunting, especially for merchants who are afraid of losing sales. Fortunately, there are tools that can help fight fraud and chargebacks. Tips and resources include:

  • Secure authentication: Activate AVS/CVV match features in payment gateways to avoid fraudulent orders.
  • Scrutinize rush orders: Review overnight orders closely; fraudsters know that merchants who rush to deliver products may bypass security measures.
  • Review large, multiple orders: Flag unusually large or multiple orders that originate from the same customer, as well as unusual international orders.
  • Address verification: If an order looks suspicious, call the customer to verify phone number, email and physical address.

“Merchants today are stuck in a bind where they must make every effort to detect and avoid fraud, while being careful not to overzealously decline legitimate transactions or allow the costs of fraud prevention to harm their profitability,” Dakshina said.


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About Dennis Kaiser

Dennis Kaiser is Vice President of Content and Public Relations for Connect Commercial Real Estate. Dennis is a communications leader with more than 30 years of experience including as a journalist and in corporate and agency marketing communications roles. He is responsible for Connect’s client content operations and is involved in a range of initiatives ranging from content strategy, message development, copywriting, media relations, social media and content marketing services. In his most recent corporate communications roles, he led a regional public relations effort across Southern California for CBRE, played a key marketing role on JLL’s national retail team, and was responsible for directing the global public relations effort at ValleyCrest, the nation’s largest commercial landscape services company. In addition to his vast commercial real estate experience, Dennis has worked on communications and launch strategies for a number of residential projects such as Disney’s Celebration in Florida, Ritter Ranch in Palmdale California (7,200 homes, 22,000 acres), WaterColor in Florida and PremierGarage in Phoenix. Dennis’s agency background included firms such as Idea Hall and Macy + Associates. He has earned an outstanding reputation with organization leaders as a trusted advisor, strategic program implementer, consensus builder and exceptional collaborator. Dennis has developed and managed national communications programs for Fortune 500 companies to start-ups, both public and private. He’s successfully worked with journalists across the globe representing clients involved in major-breaking news stories, product launches, media tours, and company news announcements. Dennis has been involved in a host of charitable and community organizations including the American Cancer Society, Easter Seals, BoyScouts, Chrysalis Foundation, Freedom For Life, HOLA, L.A.’s BEST, Reach Out and Read, Super Bowl Host Committee, and Thunderbirds Charities.