Chargebacks & Ecommerce Merchants’ Rights

Typically, credit card chargebacks are so few and far between that most ecommerce merchants feel they aren't worth the hassle of disputing. Unfortunately, when that mindset persists, it exposes the business to continuous losses via chargeback fraud (i.e. when consumers initiate unwarranted credit card chargebacks for items they knowingly purchased in an attempt to avoid paying for them.)
    
While it’s true that the work involved is time consuming, disputing chargebacks with consistency is important limiting financial losses over time. Establishing step-by-step guidelines can greatly reduce the burden of disputing chargebacks. But, creating these procedures requires some due diligence on your end. To start, you should understand what merchants’ rights are extended to you by each of the credit issuers you work with. Visa, Mastercard, et. al., have rules in place that, when adhered to, grant rights and protections to merchants in chargeback disputes.

The rules and regulations from credit card issuers often place a burden of proof on either the merchant, the customer, or both. For example, let's say Visa has a rule in place that a customer cannot file a chargeback unless they have attempted to return the item. The customer would need to provide proof of return. Merchants should make sure that each transaction is thoroughly documented (ID verification during checkout, delivery confirmation, etc.) so they can easily provide supporting evidence when filing a dispute.

Essentially, by thoroughly understanding your merchants’ rights and meticulously recording all the relevant transaction information, you’ll have the foundation necessary to streamline chargeback disputes so they take up less of your time – and money – over the long run.

Social Engineering Prevention Guidelines for CSRs

Information security is an ever-evolving issue for ecommerce sites. Even though technology has done a lot to stop them, fraud tactics are always changing in response to those countermeasures. In some cases, there's just not much technology can do. Take social engineering – when a fraudster posing as their target manipulates customer service representatives into granting access to the target's account or private information – for instance.

Also known as voice-phishing, or “vishing,” the practice is less common than email-based phishing but every bit as dangerous to ecommerce. According to the education and awareness website, social-engineer.org, the average cost of a successful vishing attack against a business is $43,000 per account compromised.

Most companies require customer service representatives to follow a multi-step process for authenticating callers before proceeding with service on an account. However, CSRs are also trained to keep customers happy. Whether it's because caller sounds irate or threatening, or the caller sounds authentic because they passed some parts of the authentication process (usually with information trawled from other areas of the internet), CSRs may share information that risks security with the intent of providing a good customer experience.

Unfortunately, calls to a live person don’t undergo the same digital fraud checks that online transactions do. To prevent scenarios where a CSR feels bullied or lulled into complying with an insecure request, companies need 1) a comprehensive flowchart of authentication steps with clear explanations of what to do when the caller can’t provide the required information 2) strict requirements for following protocols, and 3) assurance that managers trained for those scenarios will provide necessary support.

By training customer service teams to recognize social engineering and giving them the resources to stop fraudsters from stealing account data, ecommerce companies can protect their customers while still providing great service.

Inventory Slotting, Part 2: Best Practices

In our previous blog post, we pointed out how strategically optimized slotting in fulfillment centers contributes to multiple gains in operational efficiency. To realize these gains for yourself, you'll start by collecting and analyzing various data points about your inventory such as sales velocity, order frequency, size, weight, etc.

This inventory data will inform your slotting strategy moving forward – enabling you to slot all your SKUs in a layout that 1) shortens picking times and reduces the frequency of replenishment trips by providing sufficient space for extra stock (informed by sales and order frequency data), and 2) allows pickers to quickly and easily access them with limited bending, reaching, or equipment required (informed by product volume and weight).

In addition to those primary goals, there are additional "best practice" considerations that should be guiding your re-slotting decisions. Address the following aspects as early as possible to maximize the effectiveness of your slotting strategy:

Storage areas and product types

Do certain types of storage areas in your warehouse work better for certain product characteristics? Are changes to the warehouse's layout needed to truly benefit from re-slotting? For example, you may want to store paper products away from high-humidity areas, or reorganize the layout to promote better airflow.

Product cubic velocity and slot sizing

The product cubic velocity refers to the amount of units picked from a location, multiplied by the product's cubic dimensions. Accounting for the cubic velocity will ensure that the SKU's slot size and number of picking locations are optimized to reduce replenishment trips and overall congestion.

Safety

Consider how slotting changes may impact workplace safety. For example, are there SKUs that should be at lower levels or in forward pick areas instead of requiring ladders or forklifts?

The future

A lackadaisical approach to slotting is detrimental to overall throughput and efficient space utilization in your fulfillment center. To gain the benefits from slotting, the process needs to be addressed continually as product assortment or sales by product change. Prioritize slotting assessments in your warehouse operations to ensure that your facility is always running at peak efficiency.

Inventory Slotting, Part 1: The Benefits of Strategic Slotting

In fulfillment centers, "slotting" is the process of assigning the designated storage and picking locations for each SKU in your inventory. For most facilities that decide to reevaluate their approach to slotting, the goal is usually to bolster picking times. However, what many don't realize is that slotting improvements can also yield operational advantages that impact the entire warehouse, such as:

  • Operating costs – Effective slotting can improve intra-warehouse transit times across the board, lowering the net costs of any SKU moving activities.
  • Overall space efficiency – optimized slotting improves warehouse space utilization, which in turn can often delay an expensive facility expansion or move.
  • Picking accuracy – reevaluating your current slotting arrangements is also an opportunity for better delineation of similar products or variants to reduce picking errors.
  • Picking efficiency – optimized slotting is not only about shortening distance; accessibility improvements should also be considered. Slotting fast-moving SKUs into locations that are easier to pick from (i.e. with no bending or reaching) can reduce replenishment trips and speed up put-away and picking times.
  • Equipment demand and personnel routing – better slotting can help reduce traffic congestion in your warehouse's active zones and contention for material handling equipment.

To start making improvements to your warehouse's slotting, there is information about your SKUs you should collect first. Product criteria such as sales velocity, order frequency, size, weight, and other data points will all help inform how products should be slotted in relation to each other and in relation to your warehouse's major activity zones.

By aligning that data with your operational goals, you'll have necessary information to revamp your slotting assignments. In our next blog post, we'll go over some best practices to keep in mind for developing your slotting strategies.

How to Prep your Site for a Flash Sale

According to research from the National Retail Federation, 73% of consumers ranked “sales and price discounts” as top factors for deciding where to shop. In the heyday of brick-and-mortar retail, it was common for stores to attract these prudent shoppers with highly-publicized mega-sales (typically held on a “Sunday, SUNDAY, SUNDAYYY!”). With the instantaneous nature of internet shopping, today’s ecommerce equivalent would probably be “flash sales.”
    
Like their predecessors, flash sales are great for attracting consumers’ attention, driving brand awareness, and boosting sales. However, the surges in traffic to your site and order volume can strain your internal resources and hamper customers’ experience. To ensure a successful flash sale that satisfies your customers, use the following tips to prepare.

Get the word out

Besides good deals, flash sales are known for their hype! Take the time to analyze your target audiences and develop a marketing strategy to stoke those fires so your flash sale is truly effective at engaging consumers and driving business.

Variety

A good flash sale quickly cycles through lots of different discounts, which engages shoppers who stick around to see what deals come next. Your assortment should be large enough to entice the widest variety of customers.

Site Search

Flash sales foster a sense of competition to seek and find deals faster than other consumers. If your site search bar is ineffective at finding products, you stand to lose the many mobile users who are accessing your flash sale throughout the day. Make sure your ecommerce site's search functionality has mobile-friendly features, such as autocomplete and search refinements (e.g. brand, color, size, price, etc.) with tap-friendly dropdown lists.
    

Ease of Transaction

The checkout process should just as speedy as your flash sale. Make sure to eliminate as much checkout friction as possible. The longer it takes to checkout, the more likely that shoppers' excitement from scoring a deal will wear off and they'll abandon their carts.