Ecommerce has a number of benefits for merchants, from low startup costs to easy integration to more opportunities for online marketing. However, because all transactions take place virtually, merchants need to be particularly careful to avoid certain pitfalls. Let’s take a look at some of the most common problems faced by online merchants and how to solve them.
After opening a specialty ecommerce startup, one online retailer found himself with a major issue. During the slower buying seasons, from late winter through spring and summer, the storeowner was content as shipping and delivery ran smoothly across the board. Unfortunately, it all fell apart during November and continued through the holiday season. Between the three major postal carriers – FedEx, U.S.P.S., and UPS – around 11 percent of his packages were never delivered.
If an order is genuinely lost, and the consumer isn’t making false claims to get their hands on free merchandise, there are a few steps you can take. First, ask the intended recipient to file a claim with the carrier, and follow up on your end with your local post office or carrier center. Notify them of the missing item and provide a detailed description of the package and its contents, along with the tracking number and any other relevant information.
If the package was insured, the consumer can file a claim to recover the value of the item within 60 days of the original mailing date. If all else fails, make sure you’re insured as a seller.As an ecommerce merchant, it’s your responsibility to prevent major monetary losses before they happen. It’s easy and usually inexpensive to invest in seller protection insurance through a service like PayPal, and you will need to provide the tracking number to qualify.
Poor Data Security
If your site isn’t secure, you’re losing customers – which means you’re losing money. According to research, up to 25 percent of users will not complete an online purchase due to concerns about website security. Make sure any sensitive data your customers enter into your site is encrypted. Data encryption can be quickly implemented, and it’s well worth the expense to be able to prominently display your digital certificate. This will let users know you’re handling their information with care.
If you work with a third party web host or IT support consultant, make sure you demand the highest possible level of data security from them as well. Your use of these external services doesn’t diminish your own responsibility to keep your customers’ credit card numbers and other personal information safe from cybercrime.
Unfortunately, one of the biggest concerns for online retailers is consumer fraud. No matter how small your ecommerce company, you’re not immune; if anything, criminals tend to assume that smaller retailers have unsophisticated protections in place, which can render your business an easier target. In 2012, online fraud cost ecommerce sites around $3.5 billion overall, with 0.8 percent of total online orders deemed fraudulent.
If these numbers concern you, you’re not alone – but you definitely need to take steps to mitigate the situation. Always adhere to the most recent version of the Payment Card Industry Data Security Standards; this will help you avoid liability in case of fraud.
Make sure that you not only track customer input, but also make it imminently transparent that you’re doing so. For example, make your customers check a box that indicates they have read and understood your terms and conditions for online transactions.
If a customer attempts to initiate a fraudulent chargeback scam, this extra precaution will make it that much more difficult. Finally, always require a signature upon delivery of the purchased goods. This is written proof that the customer received and accepted the item.
Final Thoughts: Keep an Eye Out
As an ecommerce retailer, all available legal and written protections are invaluable for dealing with sticky situations. But it’s also important to trust your instincts. If a consumer’s online behavior raises a red flag, you’re well within your rights to follow up.