In the last decade, the number of people choosing to shop online has dramatically increased. And so has the need for being able to make payments for these purchases easily.
According to a survey, 87.5% of online buyers use PayPal as their primary online payment method due to its global presence and ease of use. Online businesses have been fast to catch up with this payment gateway preference, creating merchant accounts on PayPal.
As of today, there are over 30 million merchant accounts on PayPal, and the numbers are only increasing by the day.
But there is a catch — as you start taking orders through PayPal payments, you will start to experience ‘account reserves’ on every transaction that gets made in your store. This basically means that PayPal starts to hold some part of the order value in reserve to secure the consumer in case of disputes.
While you can’t evade this policy, there is one way to reduce your account reserve - build and consistently maintain a good PayPal merchant record.
In this post, we are discussing different ways that will help you to achieve a stellar merchant record on PayPal.
Merchant record on PayPal, in simple terms, acts as a report card of the merchants or businesses that help the consumers to avoid risky transactions and choose authentic sellers. Like any other report card, it is like a metric of how good or bad the products of a particular merchant are. A good merchant record gives the businesses an important validation and makes them look credible to the consumers.
The importance of merchant records is multifaceted and impacts your business’s success. The following are some areas where this PayPal ‘report card’ positively impacts your business:
Merchant records determine your brand’s image to the consumer. A positive one will give your business credibility, whereas a negative merchant report will drastically impact your brand value.
For each product, there are hundreds of options available on the market. So building a positive brand image is of utmost importance. This is especially true for small businesses because once the brand gets tarnished, scaling a business in this extremely competitive market becomes a nearly impossible task.
A poor merchant record can drastically hamper your customer acquisition strategy. Customers will not find your business authentic and refrain from giving you any business from their end.
You might get repeat customers who believe in your product, but to acquire new ones, you need a positive record on PayPal. If you succeed in keeping a steady merchant record, scaling your products to new customers will become much easier. It’s pretty much similar to having social proof displayed on your website!
An account reserve essentially refers to the amount of money PayPal holds in your account. This is a policy to cover potential financial risks like payment reversals (chargebacks and claims).
If you don’t have a consistently positive merchant account, PayPal will hold bigger chunks of money into account reserves for every order you receive through their payment channel.
The release of the money held in account reserves depends on PayPal’s scheduled cycle. So when bigger amounts of your income through online orders get stuck in account reserves, retrieving it becomes a hassle.
Naturally, that will result in lower cash flow into the business and trigger a series of butterfly effects like additional debt and decreased credit ratings. With a low cash flow, you may struggle to manage operations across different departments.
In a hugely competitive market, providing a positive customer experience can significantly contribute to your business’s success. Even if customers order from you, not having a positive merchant record will significantly degrade the consumer experience.
A negative report on PayPal impacts your credibility and that in turn, causes a lot more post-purchase anxiety in consumers.
After having worked with thousands of ecommerce businesses taking orders through PayPal payments, here are some tips we recommend following:
The first step you need to take to establish a positive image is to sync the information of PayPal order tracking in real-time. Ensure that the customers who order through PayPal to make payments, automatically receive all the information regarding the status of their purchase.
Now doing all this manually is extremely time-consuming and prone to error. To avoid any mishaps and maintain consistency, make use of PayPal order syncing apps like TrackiPal to automate this task. That way, your customers will receive order tracking information immediately after placing an order.
For a good customer experience, providing real-time order tracking is not enough. Make sure you communicate with your customers after they purchase your products. You can do that through email, SMS, Facebook Messenger, WhatsApp and other channels by automating the conversation. Use this communication to share information about the purchase or how to put it to work through manuals and other formats of content.
This is also a great tactic to keep the buyer engaged and excited about the purchase they’ve made, leading to a positive experience with your brand.
Your job doesn’t end with selling your products to the customers. Addressing any pre or post-purchase problem consumers may face is also important.
Keep a consistent system of customer support ready to address any grievances or issues your consumers may have regarding your products and their orders. You should give it even more importance if the delivery ETA (Estimated Time of Arrival) is often longer to reduce refunds, cancellations or even chargebacks on your account.
There is no better way to improve services as well as showcase your quality of service than authentic reviews. After every delivery, make sure you ask your customers to leave reviews. That way, you know what part of your services worked or didn’t work for them. Asking for feedback makes the customer feel valued and positively contributes to their customer experience.
If you gain enough positive reviews for your products and services, your merchant record will automatically improve. Check PayPal’s suggestions on getting more positive reviews.
PayPal currently boasts a whopping 361 million active users. An average user conducts about 40 transactions per year. This shows that online shoppers around the world prefer PayPal as their primary payment method for purchases.
Now setting up a PayPal merchant business account is just the first step to being able to make the most of this consumer behavior. If you want to encourage your store visitors to make payments through PayPal, you need to give them an assurance of safe transactions and order security - this is where your merchant record comes in.
If you have an inconsistent or negative merchant record, consumers will shy away from using PayPal to place orders, leading to lower conversion rates on your online store.
And even if they do go through with the purchase, you may start seeing a steady increase in refunds or cancellation requests due to the post-order anxiety they experience dealing with a merchant with a negative record.
So if you ask us, your PayPal merchant record is as important as the security signals and social proof you display on the website itself.
Not sure where and how to begin?
Well, let’s start by first ensuring that all the orders that have received payments through PayPal are up-to-date. By this we mean, ensuring order tracking information is updated for these customers.
That’s where TrackiPal can help you. It will quickly and easily synchronize tracking information for every order directly to your PayPal account. This helps address consumer anxiety and also signals to PayPal how reliable you are as a business, leading to lesser disputes and a better merchant record.
Ready to sync Shopify orders to PayPal? Install the TrackiPal app today.
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