Every eCommerce merchant looks forward to holiday season sales with much anticipation. It's the most lucrative time of the year for revenue growth.

Look at the numbers:

• The National Retail Federation reported that holiday season sales in November and December of 2022 increased 5.3% from the previous year, totaling $936.3 billion.
• Despite inflation, holiday sales grew faster than the 10-year average of 4.9%, driven by a 9.5% increase in eCommerce and non-store sales.
• Analysts estimate holiday sales in 2023 may reach $876 billion, up 3-4% from 2022.

But with the revenue boost from the holiday sales comes significant post-holiday chargebacks.

Post-holiday chargebacks often occur in different forms. They could be actual fraud, friendly fraud, and return fraud. For instance, one research projected the value of returned items in 2022 to be $816 billion, up 7.2% YoY. Another report indicated that payment disputes rise by over 40% in January compared to November and December.

Hence, this article will unveil exclusive insights to help you prepare adequately for the holiday season and avoid the rude shock of post-holiday chargebacks.

How the Fastest Growing eCommerce Brands Stop Post-holiday Chargebacks

Being proactive about outcomes often leads to better results. You can't achieve success by dabbling. You must fully commit.

The same goes for stopping fraud and post-holiday chargebacks. It’s about being diligent in maximizing sales while plugging any drawbacks. Therefore, having a real-time chargeback resolution system is crucial in preventing post-holiday chargebacks.

Again, post-holiday sales chargebacks may not always result from fraudulent activities. They can also arise due to buyer’s remorse. Therefore, the challenge lies in finding a balance between a flexible return policy that encourages product return and one that discourages system misuse but could potentially lead to customer dissatisfaction.

The good news is that crafting your chargeback and fraud mitigation strategies to ascertain the "who, what, when, where, how, and why" of your buyers can help you create a seamless sales process.

But that’s easier said than done. Following the tips below can be extremely useful.

Post-holiday Chargeback Prevention Tip #1: Design a Multi-layered Fraud Prevention Framework

The spike in e-commerce transactions isn’t slowing down in the foreseeable future. The numbers tell the whole story: The eCommerce market will reach $8.3 trillion in transaction value by 2025, growing by 55.3 percent per FIS Global.

As online transactions rise, using IP intelligence to reduce risks from bad actors is one effective method of ensuring sustainability. Conducting a thorough evaluation of IP addresses used for transactions can help detect fraud patterns and avoid processing transactions from high-risk regions. Below are 10 of the best IP Address tracker tools:

1. Solarwinds IP Address Tracker
2. Gestio IP
3. WhatIsMyIPAddress
4. BlueCat IPAM
5. Advanced IP Scanner
6. BT Diamond IP
7. IP Tracker
8. Angry IP Scanner
9. LizardSystems Network Scanner
10. Bopup Scanner
11. Alcatel-Lucent VitalQIP
12. Infoblox Trinsic

Next to IP Address mastery, you must ensure that each transaction is valid.

First, you can use the cardholder's device information and reputation scoring to assess the transaction's validity. Also, you can use Address Verification Service (AVS) and tokenization to avoid unauthorized transactions.

Besides AVS and tokenization, EMV 3D Secure also helps validate credit and debit card purchases. Plus, geolocation can help you trace buyers' locations to ensure authenticity. Further, integrating SSL in your store helps establish secure encrypted communication between customer devices and payment solutions.

While these are not an exhaustive list of technology tools to thwart fraud attempts, using these tools helps you limit fraud and post-holiday sales chargeback exposure.

Post-holiday Chargeback Prevention Tip #2: Use Your Return Policy to Stop Returns from Turning to Chargebacks

You already know this, but it bears repeating: Not everyone who visits your store is a real customer.

Wardrobing is a growing consumer fraud where a customer buys an item and uses it for a one-time purpose with the intent of returning it.

Here are some numbers:

• Research from Checkpoint Systems states that U.K. retailers are losing up to £1.5bn in potential sales because dishonest customers return products after using them.
• The study of 1,542 shoppers found that a fifth (22%) buy items to use and return them.
• That rises to 43% of 16-24-year-olds and 39% of 25-34-year-olds, compared to 6% of over 55-year-olds.
• U.S. retailers suffered a loss of $84.9 billion in 2022 due to fraudulent returns, according to NRF.

What’s the way out, you ask?

For the most part, the answer lies in your return/refund policy. It’s your arsenal for addressing order issues and setting better expectations for each transaction. It’s also your key to ensuring that merchandise problems do not push real customers to commit friendly fraud.

For example, if a customer purchased the wrong gift and wishes to return it but can’t do so due to the rigid nature of your policy, their only recourse will be a chargeback.

Here are some ideas:

1. Design a unique return/refund policy for holiday sales. Below are valuable consideration points in crafting your policy to avoid post-holiday chargebacks:

• Provide a more extended refund and return timeline. You can increase the timeframe of your usual order return or refund schedule, bearing in mind the intricacies of the holiday season.
• Highlight your customer service channels. Ensure your customers can connect and communicate with you for their needs. Give more options, and be sure they can reach you 24/7.

2. Prioritize effective communication with your customers. Make it easy for customers to contact you before reaching their bank for a chargeback.
3. Educate your staff on the demands of your policy and give them room to use their best judgment for decision-making. But most importantly, ensure your customers can easily access your return/refund policy. You can have the best draft in the world, but if no one can easily find it, you may not have any policy.

Get an Extra Layer of Security with Chargeback Automation

You may lose money if you don't plan your holiday sales with online shoplifters in mind. While you do your best to serve your clients and build your online business, scammers lurk in the dark to steal from you. It’s the nature of eCommerce today. And hoping it won’t happen to you will not change anything.

The best strategy is to take proactive action and protect your company. To reap the rewards of your efforts this season without post-holiday sales chargebacks taking you back to zero in the New Year, design a multi-layered fraud prevention process and use your return policy to your advantage. While these will help reduce post-holiday sales chargebacks from actual customers, they will only suffice for some instances. Hence, I invite you to join 500+ merchants using chargeback automation to pre-empt chargeback losses. Get started here.