This year’s Black Friday, Cyber Monday (BFCM) will be massive. Bain & Company, a management consulting business, predicts that retail sales in the U.S. will exceed $75 billion—a 5% increase compared to last year.
To help you prepare, Butter’s payment nerds put their heads together to develop five strategies you can implement between now and Black Friday to optimize your payments flow, boost sales, and reduce failed payments.
1. Share your BFCM forecast with your payments partners to drive sales
Imagine your typical customer buys from your store only once or twice a year, and you want to boost sales with a special promotion during BFCM. You spend months preparing, but when the big day comes, a significant portion of payment transactions fail, costing you tens of thousands, if not millions, of dollars.
This scenario happens more than you think. Acquirers, payment processors, and card issuers monitor and flag unusual purchasing behavior—like buying multiple items from a store where the customer rarely shops—as potential fraud.
To avoid this, be proactive. Share your promo plans and BFCM forecast with your subscription management partner, eCommerce partner, and payment service provider (PSP). With the information, your partners can adjust their risk rules accordingly so fewer transactions are flagged by mistake.
Pro tip: If you're a smaller or growing merchant, consider using automated tools from your PSP to optimize your payment settings during peak transaction periods.
2. Protect your revenue with multiple PSPs
The nightmare scenario for any brand during BFCM is having their PSP crash. You can protect yourself from this worst-case scenario by adding redundancy to your payment flow––using multiple PSPs ensures that if your primary one fails, you can seamlessly route transactions through another.
There are additional benefits to using multiple PSPs beyond just reliability. Here are the most important:
- Cost savings: Fee structures vary by acquirer. With multiple PSPs, you can route transactions to the most cost-effective option, reducing costs.
- Performance: Success rates aren’t static between PSPs. You can route transactions to the PSP with the best success rate.
- Global reach: Handling cross-border transactions is easier with multiple PSPs, enabling you to optimize international payments.
Spinning up a second or third PSP does take time, but if you act quickly and select the right provider, you can have it live by the holidays.
Pro tip: If you can’t launch a new PSP in time for this year’s holiday season, aim to do so next year in the spring when the sales season dies down.
3. Boost your cash reserve to protect against fees
If everything goes as planned, your sales will skyrocket over the BFCM weekend. However, with this surge in sales, you might also experience an increase in refunds and chargebacks––both of which come with steep fees from issuers. To safeguard your business, we recommend increasing your cash reserve through the holiday season to ensure you have enough liquidity to cover these potential fees.
Pro tip: If you’re a subscription-based brand offering a free trial, you can reduce chargebacks by avoiding automatic enrollment when the trial ends. Instead, use opt-in messaging to give customers the choice to continue.
4. Streamline your checkout process with one-click payments
Cornell researchers found that 70% of online shoppers will abandon their cart due to a complicated checkout process. Simplify it and give shoppers what they want by offering one-click payments for returning customers.
One-click checkout enables consumers who’ve shopped with you previously to quickly complete their purchase without having to hunt for their wallet and then re-enter their card information.
The key to enabling one-click payments is through card vaulting. A card vault is a secure digital repository – hence the name – where you store customer payment details.
It works like this: When a first-time shopper makes a purchase, they enter their personal information, and their payment details are securely saved in the vault. On future visits, the system automatically retrieves this information, speeding up the checkout process and reducing the chance of cart abandonment.
Pro tip: Partner with a payment optimization solution that vaults at the point of sale. You’ll unlock enhanced Bank Identification Number (BIN) details that can be used to improve performance across your payment funnel, leading to better authorization rates and reduced fraud.
5. Launch a campaign to update your customer information
Accurate customer data is key to ensuring smooth transactions––the better customer data you have, the more likely you’ll succeed. Before BFCM kicks off, launch an email or SMS campaign asking customers to update their personal information on your site. Doing so will decrease failed payments caused by outdated information.
Pro tip: The messaging of your campaign is crucial. Don’t just ask customers to update their information––we recommend creating FOMO by offering exclusive pre-sale access or discounts for those who update their details. This adds value and increases participation.
Ready, set, go!
The holiday season moves fast, so don’t wait––start implementing Butter’s recommendations today to boost your revenue and maximize profits. Need support? Butter is here to help you implement multiple PSPs and vault solutions. Book a consult to learn more.
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