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Home How to Deal with Questionable Orders and Chargebacks During the Pandemic

How to Deal with Questionable Orders and Chargebacks During the Pandemic

10Feb, 2021

The COVID-19 crisis has led to significant changes in consumer purchase behavior and raised concerns about ecommerce fraud. Fraudsters will continue to follow the trends of good consumers and adjust their schemes accordingly. These thieves have modified their tactics to include Covid-19-related messages and mimic stay-at-home buying trends. As an online seller, there are two main areas you need to focus on:1) questionable orders and 2) chargebacks.

Questionable Orders

The goal for any online seller is to avoid fraud but at the same time keep moving products to legitimate customers. This could mean that you need to be careful when accepting and fulfilling questionable orders. It is also important to be aware of the potential for relatively more false positives thanks to changes in how legitimate customers shop. The key is to recognize unfamiliar trends and ensure that their systems can adjust to approve those orders rather than viewing them as suspicious and decline them.

When you can adjust to those changes, they will be able to approve a higher number of legitimate orders and your customers will get their goods.

A Surge of Chargebacks

Ecommerce is changing rapidly during this global pandemic. More and more customers are relying on buying products online as many stores are temporarily closed. This has created large shifts in transaction volumes as well as more requests for faster shipping. When customers don’t get their products in time, they will often contact their bank directly to file chargebacks on delayed or cancelled items (a practice called friendly fraud). The added pressures resulting from coronavirus will only amplify this problem. Due to the fulfillment delays that can occur due to the COVID-19 crisis, you can anticipate a spike in chargeback filings in the coming weeks and months.

Chargeback management is a delicate process. The wrong strategy could inflate the problem, potentially placing even more revenue at risk. Expect lags in chargeback reporting due to long chargeback timeframes. Chargebacks could go on for months after the pandemic officially comes to an end.

You need to be ready for the increased chargeback risk. More chargebacks mean lost revenue, additional fees and fines, and poor customer satisfaction. If you do not handle it properly, you could face possible loss of your card processing privileges altogether.

Final Takeaway

Online sales owners do need to be aware of changes in how ecommerce fraud can occur during the current virus crisis. It is important to understand that fraud prevention isn’t just about stopping chargebacks—it also plays a role in approving and expediting orders as well as stopping policy abuse. Create a purchase and cancellation policy that is transparent and clear for your customers. This will go far in preventing miscommunication with customers that can cause lost sales and excessive chargebacks.

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