PayPal Survey shows Checkout Abandonments

By Garry HJ | July 17th, 2009 | Category: Pay Online | No Comments »

PayPal recently released a new survey that found nearly half (45 percent) of online shoppers had abandoned their carts multiple times in the previous three weeks due to high shipping costs, security concerns and lack of convenience.

According to PayPal’s survey, the average cost of abandoned goods in U.S. shopping carts is $109.

The results of this survey reminded me of a disturbing trend emerging on eBay …

Over the course of this year, I’ve identified several behaviour changes from eBay buyers within the USA – and only within the USA. They are -

Non-Paying Bidders have risen from a long-term statistical average of under 0.5% to around 20%, including when the item bought has a purchase price under $2.00 (I don’t believe it’s “the economy” at this price level either)
Slow-paying bidders (i.e. taking more than 36 hours to pay online, but paying eventually) have risen from around 5% to almost 40%
Pre-shipment & pre-payment “purchase regret” rates related to shipping costs have risen to a staggering 75% from US-buyers only. The rate from all other countries remains at an acceptable sub 1% level.

Similar, though far less severe, trends are beginning to display on all my ecommerce websites. Again, it is only US residents displaying this behaviour and I can only assume it is knock-on effect from what is happening on eBay.

It needs pointed out that on eBay I do all the “good stuff” regarding pre-purchase information that eBay and independent gurus recommend -

I state my location multiple times in the auction or buy now description, and in all emails
I name and describe the multiple shipping services offered in the description and have prices for each service for every country, in the shipping table
I break out postal insurance as optional and charge it at cost
I use automated template emails from eBay and PayPal for post-purchase messaging, and include a repeat of all the postal and payment options and prices
I use automated late payment reminders, 4 days after auction close, repeating all the above information.
I have information pages in my eBay shop showing all the above (non-price) information, including help pages for which shipping service to choose and what to do if … “being a skinflint you chose the cheapest shipping option and it’s taking ages to arrive“.
I include a leaflet in every package with a world map on it, showing the location for Thailand and where the goods were despatched from – it even goes so far as to state that Thailand to UK is 8,000 miles, and Thailand to the centre of the USA is 12,000 miles in either direction (east or west). Of course, if they don’t pay, they never get to see that leaflet.

Based on what I’ve received from US buyers by email this year, eBay is ramping up some sort of “Blackmail your seller” messaging regarding shipping costs, services, and transit times. Does anyone have any concrete evidence (screenshots) of such messaging?

Even when a buyer has been emailed 5 or 6 times that they bought the 3-7 week economy delivery option, I still get emails 5 days after despatch demanding to know where their goods are, or they’ll file a PayPal claim and leave negative feedback. They’re obviously not illiterate otherwise they couldn’t email to me, unless the “village scribe” trade is alive and well in the US, therefore why don’t they read the information supplied by their seller before and after the purchase?

Is there a cure for this?

There sure is – stop selling to Americans on eBay … but that would punish the many repeat-buying good customers we have there.

Is there a sensible cure for this?

Other than having Congress change the law on naturalised citizens, then relocating and running for President myself, I don’t believe so … except maybe a 100% change of the eBay top executives by installing managers who didn’t learn business in a classroom before arriving at eBay via a corporate asset-stripping consultancy firm.

Alternatively, continue mining eBay for new customers and selectively point the good ones in the direction of other venues where we sell, and to our own websites. In the meanwhile, develop hard and fast systems to deal with all the “dead beat bidders”, as American sellers like to call them.

Gaz

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