How to avoid losing money by trusting your gut instinct.

Alison Wren is a good friend, a fellow business owner with a wealth of experience.  Today she shares “when it comes to money and business, it pays to trust your gut instinct.”  Recently I didn’t follow my instincts and it nearly cost me £1,000, so I really hope this blog from Alison will stop you from making the same mistakes.

So over to Alison

Alison Wren Guest Blogger

Alison Wren Guest Blogger

How to avoid losing money by trusting your gut instinct.

When it comes to money and business, it pays to trust your gut instinct.

Ignoring mine cost me over £400 (plus a load of hassle).

It happened in the days when I was running my ecommerce business. The products we sold – crafts and wedding related – were pretty low risk for fraud. We’d traded successfully for years with barely a chargeback or PayPal dispute.

So when a big (but not out of the ordinary) order came by phone, there was no hint of the issues to come. It wasn’t until I looked at the daily report from my card payment handling company and saw the payment flagged with a low Address Verification score that a little alarm bell starting ringing.

However, the payment went through OK, we sent the order and everything seemed fine. A couple of weeks later the customer called to make a second order. Again, this wasn’t unusual, but something was starting to make me feel uneasy. I ignored it. We were talking to the customer and I told myself that if it was fraud they would just order online and not by phone. Big Mistake.

A few weeks later the chargeback letters arrived. The customer had been using stolen credit cards.

Apart from losing the price of the orders, I had to spend several hours dealing with paperwork from the banks – and they charged me for the privilege.

It was a big lesson learned. After that we tightened up our procedures for dealing with payments flagged with low verification scores (very few, as it turned out).

However, we did need to make sure that we didn’t over-react. After all one fraud in 6 years trading wasn’t a bad record. Implementing stricter criteria for rejecting online payments and adding lots of extra checks would probably have ended up costing us more in the long run.

The big lesson I did learn was that you should always listen to your gut instinct. We’ve probably all experienced it – the new client you suspect will be “high maintenance” or the enthusiastic prospect who never quite gets round to signing the contract. Even if the consequences are not directly financial, you’ll still be losing out in terms of time and energy.

So listen to that little voice. You may still decide to proceed, but at least you will be doing so fully aware of the risks and be able to put in place measures to protect yourself.

 

Alison Wren escaped corporate life to create ecommerce business The Wedding Crafter in 2004, growing it from back bedroom start-up until selling in Spring 2011. She now runs Paprika Marketing, creating and implementing effective online strategies for small business. You can follow Alison on Twitter @PaprikaMktg

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