Conversion rates increased 7.4% and average order size rose by 4% after DVD Planet began giving customers the option of guaranteeing their orders against merchant fraud through buySafe Inc., says Mark Harrill, DVD Planet director of merchandising.
BuySafe will refund a customer’s purchase price up to $25,000 within 30 days in cases of merchant fraud. Online retailers can offer it free or for a fee to customers. A retailer must pass a buySafe risk review of 20 factors, including financial viability, business history, average monthly sales, and length of time in business before it can post the buySafe seal on its site.
Harrill says he was skeptical at first that offering buySafe on DVD Planet would attract more customers or boost sales. “It really didn’t make a whole lot of sense to me what they were proposing,” he says.
But the results of A/B testing of the buySafe program, including a nearly 12% increase in revenue that translates into $500,000 in additional annual sales, convinced him of the value of the program. “To be honest, I didn’t expect we’d have as many people select a bond as we’ve had,” Harrill says. “And it does seem to be more so on higher orders.”
DVD Planet customers pay 3% of the purchase price for the buySafe guarantee, with buySafe and the retailer sharing the revenue. Customers are offered the option of purchasing a buySafe bond at checkout.
“It’s easy to forget that there are a huge percentage of customers that don’t shop online yet,” Harrill says. “Everyday you have people coming to your web site who have never purchased anything online. BuySafe gives them a little more assurance that if something goes wrong in a transaction that they’re not going to have to call their credit card company or anything like that. They’ve got an intermediary that’s got them protected.
DVD Planet’s experience shows how online retailers can benefit from the buySafe seal, says Travis Brown, buySafe general counsel and vice president of business development.
“DVDs and CDs are a very low-margin business,” Brown says. “It’s extremely interesting that we can have an impact on a large well-known seller with a very low margin.”
More than 3,000 merchants offer buySafe, Brown says.
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