Turning holiday returns to customers and avoid chargebacks

While celebrating a successful 2017 holiday season, merchants want to avoid chargebacks when they can — and experience a successful start to this retail year by attracting new and return customers.

Merchants everywhere prepare this time of year for shops abuzz with gift givers and gift recipients bringing stuff back to a store — more elegantly called “returning goods.”

At the same time, folks who shopped online (or whose relatives and friends did) try to figure out how to return items: Clothing that doesn’t fit, goods damaged in shipping, or the book they’ve already read.

Dealing with holiday returns requires a lot of merchant focus and energy too. But what else fills merchant minds this time of year?

While celebrating a successful 2017 holiday season, merchants want to avoid chargebacks when they can — and experience a successful start to this retail year by attracting new and return customers.

There’s a way to accomplish it all in one go. Let’s take a look.

Holiday Season — Return Season — Chargeback Season

One follows the other, meaning there’s no rest for the weary eCommerce merchant. The months following annual winter holidays, dubbed “chargeback season” or “Returnuary” by clever merchants can indeed cost them dearly.

Yes, chargebacks may be a cost of doing business. But every merchant’s goal should be to avoid chargebacks and associated fees whenever possible.

Which is why helpful and clear return policies and well-trained staffs make a huge difference to your success. When returns are too difficult or time consuming, customers become frustrated. Inevitably, some will opt to file chargebacks so they can get their money back…

…And that means taking the money from you. Ouch.

Negative chargeback consequences include:

  • Lost revenue;
  • Lost operating costs (making sales and shipping products);
  • Fines, fees, and penalties added by banks and card brands;
  • Lost merchandise when either true or friendly fraudsters strike;
  • Management challenges associated with lag time between purchases and refunds that skews revenue reporting.

Of course the worst penalty for an eCommerce merchant would be termination by the acquiring bank of a merchant account, needed to accept payment cards in the first place.

Cancellation occurs if a merchant’s chargeback rate is too high (greater than 3%). Card sales finished — the end of many an online business. So eCommerce merchants try to avoid chargebacks all the time, not least during holiday return seasons.

Procrastination Pushes Chargeback Season to Mid-Year

Online merchants can be forgiven for believing their 2017 holiday shopping season is done and dusted. But believe it or not, 5% of U.S. gift givers are still shopping, taking advantage of sales and gift cards they received.

Said Matthew Shay, NRF President and CEO, “Even though many consumers got a head start with holiday shopping early in the season, millions more are leaving their gift buying to the last minute and beyond.” The good news? Procrastinators represent more customers.

So it’s not too late to avoid chargebacks from first quarter sales — even if you need to replace the return policies in place prior to year-end. Just get to it! Update your website following best practices below.

For ideas, check out the U.S. News & World Report guide to standard and extended holiday return deadlines (and other details) for top retailers during the 2016-2017 holiday season. Benefit from seeing how the big guys do it. Who knows? Good ideas from others may help you avoid chargebacks too.

And be sure to continue monitoring new sales for potential fraud. Just because the holidays are over, bad guys haven’t stopped being bad.

Savvy Merchants Know Returns Present Opportunities — Delight Your Customers and Avoid Chargebacks

Be Prepared — good advice that isn’t just for Boy Scouts. Local retail stores and eCommerce businesses do best when they’re poised to process returns in ways that delight customers.

Be sure to have adequate numbers of trained staff on hand, specifically assigned to handle returns.

Publish a clear return policy. If certain items are excluded (like sale items), say so. Publish the policy and place it prominently throughout a store and near cash register(s). Print information on store receipts.

Publish the policy on your website. Include a page in the main navigation, repeated on product pages and throughout the checkout process. Consider requiring customer acknowledgement via a pop up checkbox before a transaction completes.

Include in the policy:

  • Items that can (and cannot) be returned or exchanged
  • Deadline for returns or exchanges (after purchase)
  • The required condition, including original packaging (or not)
  • How and when customers can make returns or exchanges
  • Whether a receipt is required (or not)
  • Who pays for return shipping (if applicable)
  • How refunds will be issued (cash, payment card credit, store credit, and the like)

Creating a special holiday return policy helps customers who buy gifts several weeks before a holiday. By allowing returns for an extended period, everyone is covered — including gift recipients.

For example, allow returns up to 90 days from date of purchase, or by January 31st — whichever comes first. Be flexible, but clear; include information about what customers can expect.

If you wait to receive returned items, refunds may take some time. Say so up front. Above all, make returns easy for customers. Good advice at all times, it helps merchants avoid chargebacks year round.

Generate printable packing slips with return instructions, and anything else you believe will streamline the process for customers. Have them fill out a special form including email address. Promise to tell them when you receive their return, and when it will be processed.

Customers appreciate the courtesy — and you can piggyback new sales or discount opportunities in the email message you’ll send when their return arrives. Then stay in touch unless they opt out.

Wouldn’t it be great to convert every return into a new sale, and every gift recipient into a new customer?


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