The COVID-19 crisis forced much of the globe to remain in lockdown over the last several weeks. Businesses have felt the strain of unanticipated layoffs, lost revenue, changes to internal operations, and employees transitioning to remote work.
Now, as the country discusses plans to reopen, merchants continue to live through a time of uncertainty. The repercussions of an unstable economy are widespread and ultimately exacerbated by anxiety, confusion, and unrest.
As a merchant, you may find yourself wondering what shape the market will take once the lockdown ends, and how to face the ongoing challenges of managing an eCommerce business. So, let’s take a moment to examine how this will pan out over the coming weeks and months, using the chargeback process as a lens.
An Alternative Way to Shop
Countless people remain confined to their homes and actively practicing social distancing. As a result, online shopping has seen a major increase in activity. It’s not hard to understand why; ordering groceries, clothing, or other household products from the comfort of home offers convenience and ensures safety, along with the convenience consumers already loved.
This upsurge in online shopping hasn’t been without its challenges, though. The COVID-19 environment created buyer panic and increased demand for certain products, creating numerous problems for businesses, including:
- Customer service delays. More orders being requested means a greater demand for the product. Items have been placed on hold, backordered, or gone out of stock. Even as more parts of the country reopen, there are continued delays in shipping and delivery.
- Burnout with employees. It comes as no surprise that as more workers elected to self-quarantine or isolate, and orders continued to fly in, there was, and is still, increased strain on those working behind the scenes. It’s important for you to strike a balance. Ensure the work is complete, while remembering that your employees are not indefatigable.
- Customer dissatisfaction. At the end of the day, you’re running a business. The goal is still to serve buyers in a fast and efficient way. It’s going to be a continued challenge for your business to accommodate increased demand while facing the prospect of slower production, supply chain disruptions, and shipping delays.
The Truth about Chargebacks
The obstacles mentioned above are definite problems. However, few people are really talking about of the biggest threats facing threats facing businesses right now as a direct result of the COVID-19 outbreak. I’m talking, of course, about chargebacks.
Chargebacks happen when a consumer goes to the issuing bank to dispute a charge made to their card, instead of resolving the issue directly with you. If the bank rules in favor of the cardholder, the money is forcibly withdrawn from your account and returned to the consumer.
Increased chargebacks mean lost revenue, additional fees, and dissatisfied customers. It’s important to look at the different reasons why someone might file a chargeback, and to fully understand the scope of this problem and how it affects your business. In the current environment, there are three particular chargeback risk factors to consider:
- Fraud. This covers any situation in which a person who is not the cardholder makes an unauthorized purchase. Given the current situation, scams are also a big problem hitting online shoppers. Fraudsters have taken advantage of virus-related fears and used in-demand products such as hand sanitizer, gloves, and other hygienic items for profit. It’s important to watch out for scammers who view the confusion as an opportunity to steal from merchants.
- Delivery delays. We live in an instant gratification society; this is true even during a pandemic. We already discussed how increased demand for items can lead to backorders and delays. It follows that if a consumer is frustrated with these setbacks, that person may go ahead and file a chargeback if the item doesn’t arrive within the expected timeframe.
- Labor shortage. When employees are forced to stay home, have fallen sick, or cannot complete their work for whatever reason, labor will inevitably slow. This will contribute to delays in production and order fulfillment, which may trigger an unnecessary chargeback.
How to Fight Back Against Chargebacks
Feeling overwhelmed yet? Don’t worry; take a deep breath, and we’ll get through this together. Fortunately, there are ways that you can remain proactive through this difficult period.
When it comes to staying ahead of chargebacks, there are some things sellers can do to take charge of the situation. The first way is to maintain open and honest communication with customers regarding any delays or extenuating circumstances. Not only does this build trust, it shows the customer that you are aware of the situation, and actively doing all you can to resolve it.
Along the same vein, it’s important that customers always know how to reach you. This means providing contact information such as email, phone number, and social media links on every page of your business’s website. This ensures you remain easily-accessible, and customers will be more likely to resolve any issues directly with you rather than going to the bank with a dispute.
Through vigilance, sensitivity, and open communication, you and your consumers together can ride the storm of uncertainty and adapt to a changing landscape of online consumerism.
The Final Verdict
The current worldwide pandemic created an influx of online shoppers as more people ditch brick-and-mortar stores and move instead to the virtual world. While many people choose to self-isolate and stay home, eCommerce has surged in popularity and demand. And, as we’ve seen, you will need to adapt to a new normal.
As is the case with any global crisis, there will be initial hiccups along the way as society reopens and businesses resume normal operations. No system is faultless, and no process is completely perfect.
During a time of uncertainty and anxiety, we need to do our best to work together and make the best of a difficult situation. It’s going to take vigilance and hard work, but we can come out of this stronger than before.
