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Running a successful eCommerce business requires more than just great products and marketing. Hidden costs, like transaction fees, can significantly impact your bottom line. But don't worry, you can take control! In this Order Management Guru discussion, the Gurus dive into how to optimize your Order Management System (OMS) payment processes to minimize those fees and maximize profits.
Taming the Wild West of Payment Methods (00:05:55)
Key takeaway: Not all payment methods are created equal. While Buy Now Pay Later (BNPL) options like Zip are gaining traction, some, like PayPal, can present challenges with error rates and account locks. Choosing the right mix of payment methods is crucial for a smooth customer experience and efficient operations.
1. Conquering the PayPal Challenge:
Love it or hate it, PayPal is a major player in ecommerce. But its high error rates and the dreaded account lock can cause headaches for businesses. Learn how to navigate these challenges and keep your orders flowing smoothly.
2. Riding the BNPL Wave:
Buy Now, Pay Later (BNPL) options are exploding in popularity. But integrating them into your OMS can be tricky. We'll break down the benefits, challenges, and best practices for choosing the right BNPL providers for your business.
Authorization: Your Secret Weapon Against Fees (00:10:05)
Key takeaway: Always authorize payments upfront. This not only verifies funds but also acts as a fraud prevention measure. For orders with longer fulfillment timelines, like pre-orders, strategically reversing and re-authorizing closer to the ship date can save on processing fees.
1. Authorize Upfront, Every Time:
Think of authorization as your first line of defense. It's not just about verifying funds, it's about preventing fraud and ensuring a smooth fulfillment process. We'll explain why this step is non-negotiable.
2. The Reversal Strategy:
Did you know you can strategically reverse and re-authorize payments to minimize fees? This tactic is especially powerful for orders with longer lead times, like pre-orders and backorders. We'll show you how it's done.
Refunds & Chargebacks: Minimizing Risk (00:11:58)
Key takeaway: Delaying refunds for mail-in returns until the item is received mitigates risks associated with damaged or missing goods. Implementing robust fraud prevention measures and maintaining clear communication with customers can help minimize costly chargebacks.
Strategies to Slash Fees (00:23:44)
Key takeaway: Promoting private label credit cards can incentivize customers and reduce processing fees. Interestingly, encouraging in-store pickup (BOPUS) might also lead to lower fees due to its perceived higher security. Investing in a top-tier fraud prevention system like Alx is crucial.
Settlement: Timing is Everything (00:37:23)
Key takeaway: Optimizing your settlement process is key. Settle BOPUS orders immediately upon pickup, ship-to-home orders after fulfillment, and delivery orders after the item is physically reserved.
Payment Architecture: Finding the Right Fit (00:55:21)
Key takeaway: Integrating payment processing within your OMS offers seamlessness and real-time status updates. However, external payment systems provide more flexibility for customization and fine-tuning payment logic. The best choice depends on your business's complexity and needs.
Golden Rules for OMS Payment Optimization (00:51:37)
- Reverse authorizations before expiration.
- Don't immediately re-authorize after reversal.
- Always reverse authorizations for canceled orders.
- Strategically time authorizations to minimize fees.
By implementing these strategies and carefully considering your payment architecture, you can significantly reduce transaction fees, streamline operations, and improve the customer experience.
