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Ecommerce Forum

One step vs two step credit card processing
Difference in rate of abandonment?

 2:08 am on Jan 31, 2001 (gmt 0)

I've read that the rate of abandoning shopping carts without completing purchases is normally above 80%. These are essentially one-step, with the order placed in sequence with choosing the items.

Is there any difference noted between this drop-off rate compared with a two-step process like PayPal where after submitting the order a request for payment has to be sent?



 2:32 am on Jan 31, 2001 (gmt 0)

I never saw any figures on abandonment with a two step billing. Would be interesting, but given the differences between single opt-in and double opt-in for newsletters, I suspect two step billing would be an even higher rate of abandonment.

BTW, did you see the ad during the Super Bowl that gave 65% shopping cart abandonment as the current rate?


 2:38 am on Jan 31, 2001 (gmt 0)

Those figures can be misleading IMO, I know I've taken a shopping cart or two for a test drive without any intention of purchasing anything. I've also watched inexperienced surfers add "stuff" to their cart without realizing it, then simply leaving the site. From their point of view they did not abandon anything. I wonder if the stats compensate for this sort of thing?


 2:50 am on Jan 31, 2001 (gmt 0)

I totally agree. We were talking about this on another thread -- how people use shopping carts to make a "wish list", check out total charges with shipping included, etc.

I'm personally very happy when people decide to interact with one of my sites in any way. I also ask neutral parties to test the shopping carts, just to be sure everything is OK. It's hard to test yourself when you already know how it's supposed to work!

Have you ever seen a site that won't tell you the price until you put their product in the cart? I have seen several, and that thick-headed methodology most surely pushes the cart abandonment stats up.


 4:27 am on Jan 31, 2001 (gmt 0)

>>won't tell you the price until you put their product in

I won't even put the product in on those.

I am wondering because regular remote credit card processing is 7-9%, not bad with no startup or monthly fees, yet there is a shopping cart available for PayPal now that looks very nice, and is good for a small site just starting out. I can also do a very easy secure order form for PayPal or ProPay, but don't want to suggest something that will result in lower sales.

>>BTW, did you see the ad during the Super Bowl
Ummm..no, LOL. The only part of football games I've ever taken part in is kitchen related - doing up snacks and beverages for the fans.

I once had a neighbor who told a story that she gave her husband a raw potato instead of an apple while he was watching a game, and swore up and down that he ate the whole thing without ever noticing the difference.

I never have tried that (yet), but will volunteer for KP anytime because it's fun just listening to the fans. I still can't figure out who's jumping on who.

Edited by: Marcia


 4:37 am on Jan 31, 2001 (gmt 0)

>> don't want to suggest something that will result in lower sales.

That "will" is a tough word.

In the absence of hard numbers, you only have informed hunches to go on. Yes, sales might be mariginally lower. But I'd bet chargebacks and returns are a LOT lower -- making it perhaps more attractive to the small business.

I don't see anyway to guarantee a particular outcome. I think you'd have to serve it up as a well informed experiment.


 4:45 am on Jan 31, 2001 (gmt 0)

I will be trying PayPal on an upcoming site, just need to decide on buy buttons or shopping cart.

That's a good point about returns.


 4:38 am on Feb 3, 2001 (gmt 0)

Have one site with the paypal tied into a shopping cart system(nice having an in house programer to do the shopping cart instead of waiting on paypal to get around to it). Their purchase rate is not as high as a standard cart to credit card but they also didn't have the initial outlay of funds for credit card services. Have also recently changed a site from single order via a form to a shopping cart system. Even without SEO work taking effect yet, the increase in $ per order due to the ability to take more than one item per order was dramatic.


 3:36 pm on May 9, 2001 (gmt 0)

Marcia, I am thinking of doing a similar thing with paypal ... how did this go for you?


 4:20 pm on May 9, 2001 (gmt 0)

The one complaint I have about most on-line ordering systems is that you can't find out the shipping charges without getting almost to the end of the checkout. Sometimes I find that the price with shipping is more than a competitor that has a higher item charge but a lower shipping charge. I frequently get two competitors checkout pages on the screen at the same time to find out which has the smaller bottom line. The one that is larger gets cancelled.


 2:36 am on May 10, 2001 (gmt 0)

Xoc, it seems to me that it would be considerate if merchants gave shipping information right on their sites before the ordering process even begins. It should be included right along with return policy, privacy policy, and payment options, if any.

physics, I did not end up doing that, so I can't say. It's hard to compare, because the products are completely different, but it's been the experience on sites recently that ones with a shopping cart have had more sales than with just an order form. And it seems to be borne out by the experience of others.

I think a lot could depend on type of product, and how many products on the site.

It depends on the particular type of site, but at this point I'm partial to Mals Ecommerce because of the capability of choosing different payment methods -ProPay, regular credit card processing, or PayPal.

Also, for the small sites I've been doing, it's handier (for me) to have it remote - simpler for me to code and set up. A "normal" larger ecommerce site will be different.

physics, I'm sold on PayPal for myself, personally. I've been using it for client billing and it's working wonderfully.


 4:58 am on May 10, 2001 (gmt 0)

>...if merchants gave shipping information right on their sites before the ordering process even begins...

The problem is, shipping charges vary by size, weight, destination, and method of delivery. This must be calculated for each order.

I have done exactly what Xoc has described. Too many sites make you jump through all the hoops short of entering your card # (some don't until after) just to find out what the charges would be. IMO, this is the main reason for all the reports you read about full shopping carts being abandoned at checkout.

The sites that "get it" are the ones that offer the calc'ing right on the product info page, so you can get a bottom line with one more click. All you have to do is select your zip, and your delivery options are listed with costs for each. Too few and far between are these setups.

Paypal, from a consumer standpoint, I am very leery of using. You have nowhere near the protection of a normal credit card purchase. I would have made several ebay purchases had the seller offered more than just a paypal option. Paypal accounts seem to be a major target for hackers as well. I'll stick with my VISA, thanky.


 7:50 am on May 10, 2001 (gmt 0)

Drastic, it could depend on the total dollar amount and number of transactions, deciding which method to use.

The particular market I'm dealing with makes extensive use of PayPal themselves, and is 100% comfortable with it.

I figured it out for clients originally, and came up with a breaking point - under a certain amount, it's a monthly loss/expense to use regular cc transactions.

I'm set up to do regular credit card processing through a third-party processor I've done business with for over a year now, for 6% with no monthly and no set-up - zero charges other than a percentage of sales. But in my particular case, right now, it's more convenient and cost-effective this way. I sent out a bill Sunday night, and had the payment by Monday morning.

The amount of billing I do this way, as opposed to the checks sent by mail, doesn't warrant anything else. There's also a difference in what's available for services, as opposed to products.

It depends on the particular business.


 8:09 am on May 10, 2001 (gmt 0)

>> Too many sites make you jump through all the hoops short of entering your card # (some don't until after) just to
find out what the charges would be. IMO, this is the main reason for all the reports you read about full shopping carts being abandoned at checkout. <<

I totally agree. I have some clients whose abandoned cart rate runs under 40%. But there's no surprise, no sticker shock, when the total comes on screen. All the information was givern up front.

On the other hand, I've seen way too many sites where I need to put an item in a cart just to find out the price!


 4:16 pm on May 10, 2001 (gmt 0)

Here are a few articles about abandoned shopping carts I have found:

[cyberatlas.internet.com ]

[ebsure.com ]

[powerhomebiz.com ]

Some of the articles are better than others. This first article claims that around 45% of abandoned carts are due to shipping costs. That is a fairly high percentage. Obviously there will be a decent percentage of abandoned carts where the customer had no real intention of buying in the first place as Air mentioned. I know I have done this many times for many reasons. People would also abandon carts because they are confused by the forms that need to be filled out. Many carts I have seen are way to complicated and it is understandable why people would abandon them. There are also many other factors (buyer's remorse, lost connection, distractions, etc.) so the 45% lost for shipping charges seems like a very large portion of the legitimate abandonments. Has anybody here played with the idea of offering free shipping and slightly raising the prices of the products to compensate? I would be interested to see if most shoppers would be enticed by the free shipping and not notice that they are paying more for the products.


 8:19 pm on May 10, 2001 (gmt 0)

The thing is that if you comparison shop with PriceWatch, it doesn't take into account shipping charges. So the company with the lowest item price has an advantage. They can make it back with the shipping charges.


 6:08 pm on May 15, 2001 (gmt 0)

Some tips that have helped me reduce abandoned carts.

1)If at all possible include shipping costs, and make this policy very clear from the start, and repeat it often.

2) Make sure a toll free telephone number is posted on every selling page, and more importantly at every stage of the checkout process.

3) Be up front and pro-active about your return policy.

4) Be clear about security and privacy issues.

Even though their are clear similarities, what works with bricks, doesnt always work clicks.

Hope this helps.

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