Valentine’s Day is right around the corner. And although the Beatles famously sang that “money can’t buy me love,” money most definitely can buy chocolates and flowers, which is essentially the same thing. The National Retail Federation estimates that in the US alone Valentine’s Day related purchases will amount to $20 billion.
Ecommerce merchants can expect to benefit from the holiday sales, as 59% of holiday shoppers prefer to make their Valentine’s Day purchases online. In this post, I discuss some key trends merchants should be aware in order to maximize their sales and avoid fraud this holiday.
Valentine’s Day Boosts Sales Across Verticals
Businesses selling “traditional” Valentine’s Day gifts can definitely expect a spike in order volume. Search engine data from the holiday in 2015 shows big increases in searches for jewelry, gift cards, and flowers. Our own data also shows that last year there was a 1.5x increase in the amount digital gift cards purchased on February 13th, and a 28% increase in the average gift card value.
Yet Valentine’s Day gifts are not limited to cosmetics, gift cards and jewelry. Last year, it’s estimated that US consumers used the holiday as an excuse to spend around $703 million on their pets in 2015. A survey from 2015 also showed that 40% of respondents said they hoped to receive a gadget or electronic device from the significant others.
In other words, even merchants in verticals not traditionally considered to be romantic may enjoy a boost in sales.
Valentine’s Day Orders Require Fast Turnaround Times
Valentine’s Day is notorious for producing many last minute, often panicked, shoppers. This leads to an increase in orders with overnight or next-day shipping and boosts sales of items that do not require shipping, such as digital gift cards. Millennials are the consumers who spend the most on Valentine’s Day gifts and these young shoppers will be out in force for last-second purchases. A whopping 36.5% of this key demographic said they would shop online for the holiday in 2015, spending an average $213.04 on purchases on Valentine’s Day itself.
To benefit from these late shoppers, merchants must be able to provide fast turnaround times and an accurate fraud review process that does not require reaching out to the customer for additional information. A recent report by the Javelin Strategy Group showed that 75% of millennials who had an order falsely declined due to suspected fraud limited their patronage of the merchant, while 42% stopped shopping with the merchant entirely. In other words, inadvertently rejecting a good customer on Valentine’s Day could cost you not only the sales revenue but could also potentially cost you their entire lifetime value. Digital goods merchants especially should make an effort to avoid rejecting good customers.
Valentine’s Day Is Not Just an American Holiday
Valentine’s Day is usually considered to be a US holiday, but it has actually been adopted by consumers is the UK and EU as well. Merchants can prepare themselves to take advantage of international and cross-border customers by taking the time to understand the patterns that characterize their legitimate orders.
For example, many merchants believe the use of reshippers is a “red-flag” indicating fraud, when the reality is in fact much more complex (hint: there are many legitimate reasons to rely on reshipping services). Another tip that might help identify and approve more legitimate Valentine’s Day orders is checking whether the customer used a promotional code. Since fraudsters are using stolen credit card details, they are not price sensitive, making usage of discount codes a positive indicator.
Riskified Helps Merchants Accept More Orders
Riskified uses powerful machine-learning and behavioral analytics technologies to allow merchants to accept more orders every day, including Valentine’s Day.
Click here to learn more about how our solution provides instant decisions and a 100% chargeback guarantee on all approved orders. You can also contact us directly at email@example.com with any questions.