ERA Proposes Policy to Protect DR Consumers

Share this content:
MIAMI -- The Electronic Retailing Association proposed a buyers assurance policy at its spring meeting this week in an effort to protect consumers making direct response purchases.

Under the proposed policy, merchants will be asked to pay a yet-to-be-determined premium to an ERA insurance fund per each consumer transaction. If a purchase is successful, the premium will be returned to the merchant with dividends. If the transaction is unsuccessful and the consumer experiences difficulty in receiving a refund, the money will be returned to the consumer through the buyers assurance fund.

Credit card companies typically charge merchants a holdback percentage when a consumer places a purchase. The holdback charge, which may vary, is usually retained for six months to protect the credit card company in case a consumer returns merchandise, getting a "charge-back" adjustment on his bill, and the merchant fails to reimburse the card company in a timely manner.

The ERA hopes the buyers assurance policy will provide merchants with an incentive to serve customers better in an effort to spur the credit card companies to eliminate or reduce holdbacks.

"Serious money is being reserved by credit card companies for six months," said ERA president/CEO Elissa Myers.

"What will make it work is if we can get credit card companies to reduce or eliminate holdback fees because of increased confidence that there will be less charge backs," Myers said. "This is in the interest of the credit card companies because it will cover their risk.

"If a consumer orders a $3,000 item and is dissatisfied, the customer is going to complain until he receives his money back," she said. "But, if a consumer makes a $19.95 purchase and is dissatisfied, he may put it aside and not take action for lack of time."

Consumers who experience difficulty in placing a direct response purchase will most likely not be retained as a customer, Myers said.

"The major problem is the lack of consumer confidence in the direct response media," she added.

The ERA is working with its operations council, which consists of several telemarketing and fulfillment companies, to track future transactions under the proposed system. Myers said operations council member companies perform roughly 80 percent of all transactions in the United States.

The ERA is in discussions with two major national insurance carriers, Myers said, adding that it is too early to disclose names.

"The carrier that participates would be taking huge transactional business," she said.

A potential start date for the initiative has not been determined yet.


Next Article in Marketing Strategy

Sign up to our newsletters

Company of the Week

Since 1985, Melissa has helped thousands of companies clean, correct and complete contact data to better target and communicate with their customers. We offer a full spectrum of data quality solutions, including global address, phone, email, and name validation, identify verification - available for batch or real-time processes, in the Cloud or on-premise. Our service bureau provides dedupe, email/phone append and geographic/demographic append services for better targeting and insight. For direct mailers, Melissa offers easy-to-use address management/postal software, list hygiene services and 100s of specialty mailing lists - all with competitive pricing and excellent customer service.

Find out more here »

Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here

Relive the 2017 Marketing Hall of Femme

Click the image above