In retail, everyone knows that keeping an existing customer happy is far more cost-effective than recruiting new customers from scratch. However, many online retailers struggle to build their base of loyal customers because of the level of fraud present on the web.
As ecommerce sites seek to reduce fraud, showing their customers that they really care about their safety, they often make it impossible for their customers to have a good shopping experience at the same time. That's why finding the balance between customer loyalty and prevention of chargebacks is critical to ecommerce for retailers today.
With some of the largest online retailers, like Amazon, making it so easy to purchase goods with a single click, many customers have become accustomed to the convenience of online shopping. However, on lesser known sites, it is not uncommon for customers to have to jump through numerous hoops before they can buy.
Customers quickly become frazzled when they are forced to sign up for accounts, prove their identity, answer multiple security questions, pass Captcha tests, and more. While customers are not directly opposed to these security features, the added time and friction caused by them can be a huge turnoff when they could do their one-click shopping elsewhere.
What customers really want is a straightforward experience that uses the latest in fraud prevention technology to keep them safe without requiring lots of extra steps in their path to checkout. Companies that can master this level of security and ease of use are the ones that really win the loyalty points.
Obviously, from a business standpoint, understanding what customers want and making it happen are two different things. You need to reduce the number of chargebacks to your account because it affects your profits and your reputation.
You may feel like you are doing good by your customers with all of your added layers of security, and you feel confident that they see the value in what you are doing. However, you could be scaring them away.
The truth is that preventing chargebacks does not have to mean adding more and more layers of security to your existing system. Instead, you should focus on investing in streamlined technologies that are nearly invisible to your customers.
No customer wants to shop in a mall that is surrounded by fences and razor wire. Your website should not give off that impression either. With artificial intelligence technology, geolocation and digital wallets, there are more opportunities to provide seamless online checkout that doesn't offend your customers.
These security features can exist in the periphery of your ecommerce site and gently reassure customers that they are safe while directly enhancing their ability to shop freely. They will also provide you with a more accurate system of determining which charges are fraudulent, reducing the number of false rejections at the same time.
For eCommerce sites, the best way to implement these modern systems is to work with a high risk merchant service provider. These service providers specialize in eCommerce products that feature state of the art security for the changing threat landscape that is the internet.
These vendors know exactly how to manage the balance between customer loyalty and security to keep your chargebacks at a minimum. With risk scoring systems and global authentication, your customers gain peace of mind while you hang on to their loyalty and your profits.
John is currently the Senior Vice President & Head of GlobalOnePay leading business development and partner teams. John has over over 20 years experience in the electronic payments industry, with roles including co-founding a successful businesses in the financial services and merchant acquiring space. John has held senior management positions with multiple top tier acquirers and was CEO/Co-founder of Base Commerce.