With their many entertainment and purchasing options and relaxed atmosphere, outdoor festivals attract both fans looking to have fun, as well as sellers interested in bringing in a profit. You can certainly earn money by offering food, apparel, or artistic services at these venues.
However, it's important to understand that these environments are also prone to chargebacks and consumer fraud. Fortunately, there are actions you can take that will minimize your vulnerability to these unfortunate byproducts of the festival life.
Strategies to prevent chargebacks
In the excitement of the day, people often make purchases that they later regret. This prompts them to file a dispute with their card company or bank, a situation known as a chargeback. Because addressing chargebacks can be time-consuming and costly for merchants, they should be minimized as much as possible.
Some chargebacks are intentional, instituted by people who are deliberately trying to get free products. However, many others fall into the category of friendly fraud. They can happen when a buyer forgets that they have made a purchase, or does not recognize the business name on their credit card bill.
Clear communication and policies
Although chargebacks are unavoidable, you can drastically cut down on their numbers. Start by being crystal clear about your refund and cancellation policies, ensuring that customers agree to your terms and conditions. Your billing descriptors should also be precise, with a recognizable name that links back to your business name or the festival.
If anything is ordered, immediately send a confirmation with pricing breakdowns and your returns policy. If you are selling tickets, send any updates regarding the date, time, or lineup of the event.
Great customer service
The key is to be known for your individualized, efficient customer service. It should be easy for people to communicate with you through a variety of channels, and your responses should be thorough and prompt. This attention, combined with fast and efficient refund processing according to your terms and conditions, reduces chargebacks.
Verify cardholder’s identity
Since fund disputes can also occur when people are concerned about data safety, security needs to be a top priority. Verify the cardholder’s identity with Address Verification Service (AVS) and Card Verification Value (CVV). This ensures that the buyer is who they claim to be and has not stolen the card.
Use 3-D Secure
Additionally, using the 3-D Secure 2.0 protocol furnishes an extra layer of security by sending transaction details to the bank in real-time so that they can check for fraud. Furthermore, partner only with a conventional or high-risk merchant provider that is reputable. They should offer fraud prevention and chargeback services, and furnish you with point of sale systems that are secure and regularly updated.
Keep comprehensive records
If chargebacks do occur, you need to maximize the chances that will be decided in your favor. To that end, keep a comprehensive set of documentation. This should include detailed records for every transaction, proof of attendance or delivery of products, and logs of every communication with the customer. Use these to create a dispute package that addresses the specific chargeback code indicated and refutes it to the best of your ability.
Strategies to prevent fraud
Fraud at festivals can be damaging to your high-volume payment processing. It takes the form of anything from identity theft and payment fraud to counterfeit ticket sales.
Unique ticketing, QR codes, or wristbands
Your first step is to stop counterfeiting in its tracks. Give each ticket its own unique QR or barcode, and use systems that instantly invalidate the ticket as soon as it is scanned.
You might even consider dispensing RFID wristbands that contain encrypted ticket data. These can be utilized to make cashless payments throughout the venue, reducing fraud and eliminating the need for people to carry large amounts of cash.
ID checks
Another idea is to link tickets to the buyer’s name, requiring an ID check before entry. Finally, educate attendees on how to spot false tickets and keep your website updated about possible scams.
Focus on security
Ramping up your on-site security also limits fraud and other crimes. Reduce the use of bills and coins with cashless systems such as RFID wristbands. Make sure all POS systems use encryption, are regularly updated, and are monitored for tampering. Finally, forbid your staff from using public wifi when conducting financial transactions.
Speaking of staff, focus on providing regular training to them as you promote a security-first environment. Concentrate on the security features built into official tickets. Tell them about fraud awareness, including how to identify specific red flags such as unusual payment behaviors and multiple suspicious tickets.
Your internal procedures also need to be ironclad. Implement controls for vital operational aspects, including cash and inventory management, merchandise, and vendor payments. Doing so helps to reduce the chances of fraudulent activity that could go undetected until long after the event is over.
Collaboration
One of the best weapons against fraud is collaboration. Share strategies and tactics with local law enforcement, organizers, and ticketing platforms. Doing so can give you insights into emerging security and fraud threats. Combine this networking with the latest anti-fraud technology that can analyze transactions as they occur, identify anomalies, and flag potentially fraudulent purchases for review.
When a large outdoor festival is carefully planned and well-executed, it can bring benefits to attendees and vendors alike. Implement strategies to keep chargebacks and fraud at bay as much as possible, and you will be in the perfect position to benefit from everything that the event has to offer.
North is a leading financial technology company that builds innovative, frictionless end-to-end payment solutions designed to simplify and grow businesses of all sizes. From the front door, to the back office, the developer world, and partnerships that expand the payments landscape, North offers proactive, comprehensive merchant services, in-house processing, and more.
