Online shopping is quickly becoming a staple of modern life. 2021 saw $870 billion in eCommerce sales and the industry has only been growing since then! With this growth comes new challenges for merchants: credit card payment processing. Many online businesses make avoidable mistakes when accepting and managing payments from customers through their online storefronts. Avoid these 10 common errors to make sure your business thrives.
Not Knowing How a Merchant Account Works
Not knowing how a merchant account works when accepting credit card payments online. A merchant account is required by law to securely store customer data, like names and addresses, as well as financial information like credit card numbers and expiration dates. To maintain compliance with PCI-DSS standards, it’s important to choose a reputable payment processor that has strong security measures in place to protect this sensitive data.
Not Understanding the Terms of Service for Your Merchant Account
Not reading or understanding the terms of service for your merchant account. It may sound obvious, but merchants often don’t take the time to read through their merchant agreement and understand all of its details. Understanding what you’re agreeing to is crucial before signing on with any credit card processor. Ask about PCI-DSS compliance and liability for fraudulent charges when choosing a payment processing company, as well as whether you’ll have access to reports and statements detailing transactions from your customers.
Not Setting Clear Policies for Refunds and Cancellations
Not setting clear policies on refunds or cancellations online due to unforeseen circumstances like technical issues with an order page, product defects, etc. When setting up your online store, be sure to create clear policies on refunds and cancellations so you’re protected legally in these situations. You should also consider offering products with a no-questions-asked return policy to appease customers that may be hesitant to shop online.
Not Using the Same Company as Your Merchant Account for Transaction Processing
Processing transactions directly through the company you have your merchant account registered with instead of an independent payment processor. Most merchants don’t realize this, but processing transactions directly through a credit card brand, such as Visa or Mastercard, expose merchants to more liability when it comes to fraudulent charges than using a third-party processor like Stripe or Square. When working with a reputable payment processor, you can rest assured knowing that they take responsibility for fraudulent charges, and you won’t be held liable.
Not Having a Backup Plan
Not having a backup plan for if your primary payment processor experiences an outage. While outages are rare, they do happen from time to time. If you rely on a single payment processor to power your online store, an outage could mean lost sales and frustrated customers. To avoid this, consider signing up with a backup processor that can take over transactions in the event of an outage. That way, your business can keep running smoothly no matter what.
Not Using a PCI-Compliant Data Storage Solution
Storing credit card data on your servers instead of using a secure, PCI-compliant storage solution like Amazon S3 or Azure Storage. Many businesses make the mistake of thinking they can save money by storing customer credit card data on their servers. However, this exposes the business to a much higher risk of data breaches and expensive fines from credit card brands if PCI-DSS compliance is not maintained. It’s always best to use a secure, PCI-compliant storage solution for storing customer credit card data.
Not Using Tokenization
Not using tokenization when processing credit card payments online. Tokenization is a process whereby sensitive credit card data is replaced with a randomly generated string of numbers, called a “token.” This token can then be used in place of the actual credit card number when making future transactions. Tokenization helps to reduce the risk of fraud and data breaches by making it nearly impossible for hackers to obtain usable credit card information. If you’re not currently using tokenization for your online transactions, talk to your payment processor about how it would work with your current setup.
Not Preventing Long Shipment Times
Not being mindful of the amount of time you take to ship orders. People hate waiting around for their purchases and if you take too long between processing a customer’s order and shipping it out, they may never become a repeat buyer. Make sure to give yourself enough lead time so that you can process the order and get it packed up and shipped out promptly. Customers will appreciate this consideration and be likely to return next time they need something from your store.
Not Charging Customers Prices Stated
Charging customers more than the price stated on an item’s description page. This is a pet peeve of many eCommerce customers and one that can be easy to avoid by making sure all prices are clearly stated before an item is purchased. Customers will be angry if they think an item is cheaper than it really is and will also feel like they’re being misled or lied to. To prevent this, always stick to the price listed on your product description page when you’re processing a customer’s order.
Not Having Clear Shipping Policies
Not having clear shipping policies that list what you do with the returned merchandise and how long the process may take overall in issues such as lost shipments or damaged orders. If you want to run a successful business online, it’s important to include clear shipping policies so customers know what to expect when they purchase from your store. Make sure to list out everything from how you handle returns to what your policy is on lost or damaged shipments. Customers will appreciate this level of transparency and it can help to prevent any misunderstandings down the line.
Avoiding these 10 eCommerce merchant mistakes can help you run a smoother, more successful business. By being mindful of these potential pitfalls, you can avoid them altogether and keep your customers happy.
There are a lot of mistakes that eCommerce merchants make with credit card processors but the above can help you prevent the most common. If you are looking for a company that can combine your merchant account with your credit card processing, then Balanced Processing Partners may be the answer.