People who are working in E-commerce sphere might be familiar with the very common problem of Fake Orders. The reason behind this, people going through all the trouble to checkout with a product they don’t intend to receive, is still not a very well understood phenomenon but the implications are important nonetheless. In this day and age of increasing competition and reducing attention span making the purchase process restrictive or long winded will only be counter productive for your own business. Just because of some 10% or so bad cases you should not annoy the rest of the 90%. Whilst in ecommerce business model, it’s the fake orders in other businesses there are bad debts and so forth which also lead to write-offs.
What’s to say that a customer placing a fake order will use a real name and address? One solution would be to use machine learning to compare the behaviour of a genuine customer with a fake customer but the ultimate solution would be pre-payment like most of the rest of the world. I know this is a problem in Pakistan due to a large unbanked population. If you can calculate the amount of time spent over selection and ordering you might get the idea. FakeOrders.pk is a step we have taken to eliminate such orders. It is an open repository for all fake orders. Currently, all e-store owners dispatch products after confirmation of the order by call thus fake customers with invalid numbers can be eliminated right away.
COD is not going away anytime soon
The main culprits are the ones who confirm orders on call but when delivered refuse that any order was placed. Cash on Delivery service makes this even worse. The associated cost (pre-ship call confirmations, shipping, fulfillment man-hours etc.) is huge and will only increase with an increase in the percentage of online shoppers. While I am imagining an online shopping environment where everyone behaves responsibly, even Alibaba faces such order cancellations and fake order deliveries. Unless everyone gets onboard the simple idea of pre-payment backed by Estores backing up their product/service, world can be a better place.
Just add OTP on checkout and 99% fake orders will disappear
In Pakistan, most people don’t have email IDs as well. OTP is good but the only problem is it will add an additional conversion barrier and hence will discourage the genuine buyers from checking out. Do not annoy the majority of good customers and accept this issue as a business expense. It actually increases conversion rate. Their phone number is their Id and password is OTP that is generated whenever they want to login.
We never received a fake order. The reason is that we only have OTP enabled profiles and checkout process. It works well in Pakistani market. — Mamnoon Raza, Founder at Webmasters.pk
Incentivize pre-payment and reward first-time deliveries
In my opinion, fake orders are the part of the business. What to worry about? Banks give loans and immediately make a provision that 5% will not give back the money. You should make a provision that 10% of orders will not be delivered. So making databases and sharing personal information of clients is neither ethical nor practical. Return rate can be controlled but cannot be eliminated even if there is pre-payment solution as well.
Use of CNIC by NADRA to avoid Fake Orders
Selling online, we have one of the best human database in the world and we all know that now our mobile phone sims are verified using our CNIC. If our government can provide an API using which we can verify users from the NADRA database using their phone number and name or CNIC it would solve a lot of problems not only in the E-Commerce sector but others too. It needs to be regulated though in order to avoid misuse such as Fake Amazon Order Email from the customer point of view as well.
Get a merchant account and accept payments through debit card only
It’s not easy but this revolutionary thought needs to be executed if we ever wish to come out of the cod mentality. Online shopping culture is new to most (if not all) and something simple as this needs customer education. The only way forward is to filter the customers beforehand (by making them create an account) if they have a working email address they can sure as hell work a debit card. Rest is fake anyways so why bother?
People cancel orders at last minute for various reasons may it be Germany, South Africa, Vietnam, Canada or the U.S. Customer not available at the time of delivery is the most common problem. The products that are SEO’d have lower return rates compared to products that are advertised. High value items have lower return rates compared to lower valued items. Buyers remorse gets to run its due course in online shopping. E-commerce store owners should realize that fact to be successful. Online shopping through ads is mostly “impulse buying”. the rate of “buyer’s remorse” is quite high in “impulse buying”. That remorse resolves itself through the time taken for delivery. The actual mistake most people make is focusing on “instant hits” rather than “needs”.
Related: 6 reasons Kaymu failed in Pakistan?