Payment Issues Figure Among Reasons for Checkout Abandonment

Various issues with payment methods loom large among reasons consumers give for abandoning the checkout process on e-commerce sites, according to a survey released on Wednesday by PayPal Inc. Some 22% of 355 consumers who had abandoned shopping carts at a mix of large and small merchant sites before completing their transactions cited the absence of the payment method they wanted to use as a reason for walking away. One in five said their wallets or purses weren't readily at hand at the time. And 16% feared the site could not keep their card data safe. With about two-thirds of consumers walking away from Web sites before completing transactions, according to PayPal estimates, checkout abandonment is a sizable problem for online merchants. The recent survey reveals that the average purchase amount lost each time is $161 (on an average of 2.4 items) for large merchants and $118 (2.2 items) for small ones. Although more than one-third of the customers who abandon their carts do return to buy from the site, merchants are clearly losing substantial sums to the abandonment problem. “That's quite a lot of money being left on the table,” says a PayPal spokesman. The San Jose, Calif.-based processor of online transactions commissioned comScore to conduct the survey to get a better understanding of why consumers abandon transactions at checkout. Reston, Va.-based comScore tracks consumer usage of online applications. “We want to make it into actionable advice for online merchants,” says the spokesman. Survey respondents, all of whom had been identified as having abandoned secure checkout sessions, were contacted between March 25 and April 18. All were interviewed about their most recent such session. The biggest reason for abandonment?cited by 43% of the sample?was the cost of shipping, which they said turned out to be higher than expected. Other prominent reasons included: total cost of purchase ending up more than expected (36%); and a desire to visit other Web sites before buying (26%). One conclusion PayPal has drawn is that sites need to do a better job of providing product information?most particularly pricing and shipping data?to customers before they get to checkout. “It could be shipping and tax and price information, or it could be reviews of products,” the spokesman says. Some 54% of those who cited the absence of a preferred payment method said the method they were looking for was PayPal, though PayPal and comScore qualify this result as stemming from a small base of 54 respondents, since the question was put only to those who had abandoned checkouts at small merchants. Ranking second was Bill Me Later, at 17%, followed by credit card (13%). Direct debit was cited by 4%, while Google Checkout, a PayPal rival, registered among 2% of respondents. Still, while payments issues play a role in shopping-cart abandonment, the survey reveals some substantial good news for payments providers. Forty percent of those who abandoned checkout at a large merchant, and 36% of those who walked away from a transaction at a small one, agreed that “making payments online is very safe.” The study also indicates the importance of online wallets, which store account information and relieve consumers of the need t enter these details with each purchase. Thirty-six percent of those who abandoned their shopping carts at large merchants, and 42% of those who did likewise at small ones, cited agreement with the statement that “I prefer shopping on Web sites where I have my shipping, billing, and financial information stored.” The survey asked respondents about their abandonment of transactions at a total of 355 merchants, 221 of which were considered large, 134 small. Large merchants included amazon.com, ticketmaster.com, united.com, staples.com, bestbuy.com, and target.com. Forty-three percent of those who had walked away from large sites, and 47% of those who had done the same with small sites, said they had abandoned shopping carts “multiple times” in the previous two weeks.