New PayPal Tools Help Reduce Abadoned Carts

Written by  July 12, 2009

In a recent article I wrote titled 10 Proven Methods to Decrease Your Shopping Cart Abandonment Rate I detailed a number of strategies you could use to reduce your cart abandon rates.

If you use PayPal as a payment method, and depending on the technical ability of your cart, you might have had trouble with abandon carts in the past. However a recent survey conducted by comscore on behalf of PayPal aimed to answer the question why shoppers abandon their carts.

The survey revealed that largest single reason online shoppers abandoned their carts was due to high shipping costs. Additional factors were security concerns and check-out processes that lacked convenience.

The survey also found that if merchants had provided shipping costs upfront, this might have persuaded 40 percent of participants to complete the purchase.

As a result of the survey findings, PayPal recently released the PayPal Instant Update API — a new Express Checkout feature.

The Instant Update API enables merchants to provide customers with the critical information they need — when they need it — in order to make the purchase.

Merchants who integrate the new API, can now show order details which include shipping options, insurance choices and tax totals, earlier in the check-out process.

Customers will still pay on your site when using Express Checkout; however, with the new tools they do not need to reenter shipping, billing, or payment information because the information is already available from PayPal. This helps merchants offer a more simplified checkout process while providing customers with what they are looking for.

Additional Reasons Shoppers Abandoned Carts

A comprehensive list of the most frequent reasons why shoppers abandoned their carts is below.

  • High shipping charges: 46 percent
  • Wanted to comparison shop: 37 percent
  • Lack of money: 36 percent
  • Wanted to look for a coupon: 27 percent
  • Wanted to shop offline: 26 percent
  • Couldn’t find preferred pay option: 24 percent
  • Item was unavailable at checkout: 23 percent
  • Couldn’t find customer support: 22 percent
  • Concerned about security of credit card data: 21 percent

If you are looking for more information on the PayPal Instant Update API you can read about implementing it using any of these links:

Implementing the Instant Update API

The PayPal Blog

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Comments

4 Responses to “New PayPal Tools Help Reduce Abadoned Carts”

  1. nathan sanko on July 30th, 2009 3:30 pm

    I have a question Eric….what percent of abandoned shopping carts have an email attached to them, and therefore afford a retailer the opportunity of following up with an email? Thanks!

  2. Eric on July 30th, 2009 4:52 pm

    Good question Nathan.

    My answer would be that determines on where you decide to track the abandonment.

    Do you track an abandon as someone who puts an item in there cart with no intention of ever buying (such as to see a price, to get shipping info, etc…) or do you track the abandon as someone who puts an item in their cart and makes a conscience decision to buy?

    Depending on your shopping cart solution if you track from the point at which they only put the item in their cart and then abandon you could see overly high abandonment rates. Why? I’ve seen in a large number of cases with very popular shopping carts where a robot (search engine) is able to start a session and add an item to their cart.

    You can see the immediate problem here if you are trying to track abandons from this one micro action alone.

    I would opt to only track those who put the item in and want to buy as a true abandon. You can tell these people for the most part as those that actually start the checkout process and then leave at some point during it.

    If they start the checkout process with something in their cart chances are high that they are in the market to buy it.

    Depending on your shopping cart technology you should be able to gather their email address during checkout and that should be added to an “abandoned carts” list in the event they never complete the transaction.

    So looking at it from that perspective, I would say that if your cart can do this and if you track an abandon from the point that the checkout process actually begins, you should have 100% of the email addresses for those who abandon.

  3. nathan sanko on July 30th, 2009 5:58 pm

    Thanks so much for the timely response! My question is more along the lines of what the industry average is. I have read that 60% of all carts are abandoned…51% are abandoned at checkout. So of that 51%, what percentage have email info attached to them? For all the information out there on abandoned carts and how to convert them into sales, I haven’t seen one mention of how many of the abandoned carts actually have an email “attached” to them that would allow a retailer to send a follow up email.

  4. Eric on August 2nd, 2009 7:47 am

    Nathan,

    The reason you haven’t been able to find that information is because there is no real industry standard on that. The ability to have an email tied to an order and at which point is a technical feature of the cart being used. Due to the large number of cart platforms (including custom platforms) present, there isn’t any concrete data on how many emails are attached.

    In my experience as long as the cart includes an “abandon” carts feature in it and as long as it collects the email (which the majority do during checkout) then the ability to followup with those is usually present.

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