I think your post has outlined the main reasons - loss of business. You need to figure out the benefit:cost ratio and weigh it against your own business aims.

If you now do 1000 sales a month and one of those results in a chargeback based on shipping only to billing addresses, then your chargebacks are 1:1000.

Ideally, you should do a limited period trial, either as an A:B type or by comparison to the same season in previous years. If this isn't possible, and preferably in addition, get hold of as much data as you can on chargebacks with a separate billing address.

Assume you discover that on orders shipped to a separate address the chargebacks are 1:10, and that the potential increase in orders is an additional 500 a month.

If chargebacks cost you $100 on average, and your profit less proportioned expenses on one order averages $40 then:

Current profit = 999*$40 - 1*$100 = $39,860
Potential extra = 450*$40 - 50*$100 = $13,000

Then, factor in whether an extra 500 orders a month would give you a reduction in your wholesale rate, whether it would be using underutilised resources, if it might support a larger advertising campaign, the extent to which it reduces your proportioned overheads and similar benefits. Be aware of penalties such as being tipped just into the realm of having to hire someone new but not quite enough to fully utilise them.

From that you get a cold hard business case upon which you can make a proper decision. Such things shouldn't be about preference and risk reduction but about their contribution to your eventual business aim (whether that is expansion / profitability / stability / etc.)

It can be a useful financial structure to deduct a percentage for chargebacks from every payment you take, based upon your estimated chargeback cost averaged across all orders. Alternatively, take out a chargeback insurance policy which will cost you slightly more (in general) and have them deal with the risk.

Other possibility one: customers who have ordered previously are shown a separate shipping block for orders over the holiday period. Don't announce it and don't do it for customers who's first order was after you started the process.

Other possibility two: use the 'shipping address' facility some card providers support

Other possibility three: perform additional checks / security measures for those with separate shipping addresses (require faxed or scanned ID / phone landline which matches phonebook / on local electoral roll for shipping address ...)

possibility 1 from vince is what i do with my site.
For customers who are making their first / second order i always ship to the billing address. once i have established that the customer is 'legit' then i allow them to ship to different addresses - if the amount they are wishing to order is large, or there looks to be something not right then i would make a phone call to them to confirm.

Ally

Thanks for the input. I wasn't aware of chargeback insurance and will look into it.

About 90% of our orders are placed online so we need to develop a way to measure the bounce rate off the checkout page. If that rate is high we might conclude that the "no separate shipping address" is the underlying factor in the bounce rate and calculate a risk/reward projection based on changing our shipping policy.

We have always offered the option of a separate shipping address, Which I feel is a necessity because our competitors do and I think we would lose business if we didn't. I personally send everything I order to my job, because there's always someone there to receive it. I think I can count on one hand how many charge backs we've had due to fraud and shipping to a different address.

That's not to say there haven't been attempts, we've just been good(lucky?) at seeing them before shipping anything out. Fortunately, we're also in a segment that doesn't have the appeal to a thief that say electronics or computers do.

Whenever we get an order that we deem suspicious, we investigate the order thoroughly until we can rule out fraud. If we can't rule out fraud, we will refuse to ship to the different address. We only get maybe two to three orders a week that look suspicious, and maybe only one a month or so that end up being what we believe was a fraud attempt.

We could not do business if we restricted shipping to the billing address. Like MrFishGuy, and a whole lot of other people, I ship virtually nothing to my home address. Assess the risk, and figure it into the cost of doing business. The product niche, average order amount, and such, will affect how you elect to manage the risk.

There are a lot of people with different billing than shipping addresses. For example college students, people with second homes, people on vacation, people who have stuff shipped to their place of employment, and of course people sending gifts.

Perhaps one might separate goods and title. Ship the title to the billing address then ship the goods to the shipping address.

I really can't think of a scenario where there wouldn't be a legitimate reason to ship to an address other than the billing address.

About 25 percent of my customers shipping address differs from the billing address.

That's the one of the main reasons why people order online: They have to work and don't have the time to go shopping. And working people are usually not at home when the parcel service arrives. So they let the goods deliver to their working address.

I have heard that the reception area of many companies look more like an UPS shipping centre nowadays with all the employees parcels arriving each day.

Our percentage is around 15% with differing bill-to and ship-to address.

Their reasons vary: Buying something for an elderly parent, and having it shipped directly to them; buying from Mexico or Canada, but having it shipped to a friend in a US border town; or buying a birthday present for an out-of-town friend.

We've provided this feature for years, and have had zero problems with it.

try selling unique gifts and telling your customer that they can only send the gift to them self. yes, and after they selected gift wrap and have bought for multiple recipients (hopefully). Id say that thats 40% of our business, which offsets the 1% that goes to fraud. Its not hard to capture a fraudulent order if you know what your doing, as it is way too easy to fail due to not meeting the demands and desires of your target market. think about it

piatkow wrote:

I really can't think of a scenario where there wouldn't be a legitimate reason to ship to an address other than the billing address.

piatkow ... what john5000 said:

There are a lot of people with different billing than shipping addresses. For example college students, people with second homes, people on vacation, people who have stuff shipped to their place of employment, and of course people sending gifts.

Additional scenarios:

· people whose billing address is a PO Box
· people traveling on business -- (need another gig of ram shipped overnight to their hotel...)
· people using a Corporate credit card
· people who manage finances for their parents
· people whose accounting/financial matters are done by a business manager or a CPA.
· ... and much, much more :-p

Yikes -- even PayPal lets me have multiple "ship-to" addresses (and PayPal will often confirm them as well).

[As an aside -- some credit cards allow the customer to add additional "ship to" addresses as part of their cardholder profile.]

I think you were confused by the double negative in my original post to paraphrase slightly - in every scenario that I can think of there are legitimate reasons for customers to require shipment to a different address.

Mea culpa!

piatkow, I read your post this morning and it is clear as day.

... which is a message to me -- I ought not post after sunset.

This topic comes up here every year and every time 99% of experienced e-tailers agree there is no reason to prohibit orders from separate ship/bills. In our case, such orders represent about 10% of our business... again with zero problems.

Reminds me of sites that used to reject orders from free email services...gmail, yahoo etc.

In a chargeback one of the issues is whether you shipped to the address confirmed by the card issuer in a CNP transaction. I don't recall (I'll use Visa rules) reading any of the reasons I've read in this thread as valid for successfully answering a chargeback. What I conclude here is a strong case that the reward of increased sales outweighs the risk of chargeback(s). I won't agree or disagree but it's a good read on how others conduct their business.