Consumer Patterns of Online Shopping

Online shopping is one of the most prolific uses of the internet. With access to products and services in an instant, without ever leaving one’s home, more and more people are choosing to spend their money online. In fact, according to Midigator’s 2019 Consumer Confessional, 95.6% of study participants said they have bought something online, and 66.41% said that they bought something online at least once a month or more. For merchants, this means that the opportunity for you reach more customers is almost limitless. However, the influx of online shoppers comes with an additional worry—does this mean more chargebacks?

Unfortunately, yes. The study found that eCommerce purchases comprised a whopping 98.22% of chargebacks analyzed. However, more than 66.67% tried to resolve the matter with the merchant before contacting their issuing bank for a chargeback. This means that merchants must do a better job of responding to their customers’ problems with their purchases quickly and efficiently. 23.66% of consumers reported that when they contacted the merchant, the merchant was unwilling to refund or exchange the product or services. Another 21.95% claimed that they never received a response back from their email or phone call at all. In order to reduce chargebacks, businesses should be sure to provide effective customer service so that customers do not immediately go to their bank.

The demographics of who files chargebacks are split pretty evenly between men and women, but age is a more telling factor. 26.58%of study participants between the ages of 18 and 23 have not disputed a purchase, while 48.24% of those between the ages of 36 and 40 have.

The frequency of a consumer’s online shopping is,unsurprisingly, correlated to the frequency of their chargebacks. 67.07% of consumers who only shopped online 1-2 times a year had never disputed a purchase, while only 32% of consumers who shopped online 1+ times per day had never filed a chargeback. Those who shopped online 1+ times per day had the highest frequency of chargebacks: 4% of this demographic have disputed 10 or more purchases. Most consumers, however, have either never filed a chargeback or have only filed 1.

The biggest takeaway from this report is that a lot of chargebacks are preventable if merchants are sensitive to the needs of their customers—faster shipping times, responsive customer service, and a willingness to refund or exchange products or services are good ways to reduce involving the issuing bank. Of course there are always going to be chargebacks,especially considering the incidences of fraud, but businesses can use the information gathered in the study to protect themselves from chargebacks from online shoppers.