On behalf of everyone at Yahoo! Small Business, we wish you a safe, warm, and successful holiday season.

On the Network
Important Changes to Yahoo! Shopping

Currently, if you participate in Yahoo! Shopping, you pay a 3.5% revenue share for every sale driven from Yahoo!. During February 2004, Yahoo! will be removing the 3.5% revenue share in favor of a click based pay-per-performance model. If you choose to participate in Yahoo! Shopping, you will be charged on a cost-per-click (CPC) basis.

Here are the details:

• Under the new cost-per-click model, whenever a potential customer clicks on your product, you will pay a fixed cost-per-click price based on the category of the product listed. You will manage your inclusion with Yahoo! Product Submit, an easy-to-use, Web management system, and will only need to follow a few simple steps to sign up and get started.

• The new cost-per-click pricing for inclusion in Yahoo! Shopping will be phased in during February 2004. You can continue to participate in Yahoo! Shopping under the current revenue share terms through the transition, but by the end of this period, you will need to sign up for Yahoo! Product Submit.

• To thank you for being a Yahoo! Store merchant, and to ease the transition into this new model, we will be offering a free click promotion during February. Specific program details to follow in January.

• After the end of the free click promotion, you will automatically be eligible to receive a 20% discount off the Yahoo! Product Submit rate card across all categories! This special rate will only be offered to Yahoo! Store merchants and Yahoo! Merchant Solutions customers.

We will provide more information and reminders in January, but we wanted to make sure you had advance notice.

A D V E R T I S E M E N T Business Filings Incorporated Special savings! Incorporate your business this winter and save! A leader in providing formation services, Business Filings makes it easy to form a corporation, LLC, or nonprofit in any state. Experience the ease of incorporating with Business Filings. Take about 10 minutes to complete our online order form, and we'll prepare and file your formation paperwork. This leaves you valuable time to concentrate on growing your business. Learn more.

Merchant Tips
How to Handle Holiday Returns

It's inevitable. With holiday sales go holiday exchanges and returns. To help you minimize the hassle, we asked your fellow merchants to share how they manage the process.

Be sure to display your return policy on your web site "so there are no questions later," says Howard Geschwind of SpyTown. Geschwind suggests being "as specific as possible about how you will handle returns for different types of products. And make sure to tell the customer to save their original paperwork and all original boxes and packing material."

Karen McMasters of BareBabies says her company's policy "is to happily take back returns." Although they sometimes receive returns that do not meet their return policy guidelines (brand new, in the original packaging, with no markings on the box), "we always try to accept the items and know we will have a return customer because of it."

What about returns that you can't resell as new? McMasters recommends having an outlet section of your site. "Or you can always sell the returns on Yahoo! Auctions!"

Here are more best practices we recommend:

1. Be sure that your order confirmation and shipping status emails include a link to your return policy.
2. Include return policy information in your packaging materials when you ship your customer's purchase.
3. Treat returns as a chance to build future business! Remember that a good return and exchange policy makes for satisfied customers, repeat purchases, and increased sales over the long run.

A D V E R T I S E M E N T The Fleet Small Business Value Package Better control. Better for business. Small Business Tip: If you're looking to simplify payroll, merchant services, checking, credit services, business spending and more – Fleet now has an affordable, bundled small business solution: The Fleet Small Business Value Package. It can give you better control of your small business banking. Call 1-800- FLEET-BIZ or learn more.

Feature Update
Fraud Protection and Enhanced Shipping Are on the Way!

We're actively working on two new and exciting projects that will launch early next year -- enhanced shipping functionality and fraud-protection tools. We've heard you say loud and clear that these two features are crucial to you, so here's a quick preview.

• Improved Tools to Help Combat Online Fraud
  We're developing new tools to help reduce the expense and frustration associated with fraudulent transactions. Soon, you'll be able to create rules that block and flag orders with address verification or card verification value (CVV) errors. For example, you could automatically reject or flag all orders over a certain amount when the customer's billing ZIP and CVV don't match. This is just one of the many different ways that you'll be able to customize your fraud protection based on your business needs. Fraud-protection tools will be available to all Yahoo! Store and Merchant Solution customers.
• Enhanced Shipping Will Simplify Order Processing
  To help you save time, we'll provide access to enhanced shipping features, including the creation of shipping rules, order management and processing, and checkout modules to help inform your customers about shipping options. Highlights of our upcoming features include being able to process shipments, print shipping labels, and generate tracking numbers automatically - all within your Store Manager. Please note: Enhanced Shipping will only be available in Yahoo! Merchant Solutions.

Stay tuned for more details on our launch plans for the shipping and fraud-protection features.

A D V E R T I S E M E N T VirtualCenter Order Entry Services VirtualCenter is designed for Internet merchants who need flexible call center, data reporting, and virtual PBX services at affordable prices. U.S. call center agents take orders and messages, and support customer service. $0.79 per agent minute, no monthly minimum, 24/7. VirtualCenter - a Blakey Services service.

E-commerce on the Web
Links to Sites, Features, and Stories

Soldiers in Iraq Go Online for Holiday Shopping
Some of your holiday shoppers this year might be American troops ordering gifts for the family back home.

Online Sites Raise Shopping Accessibility
Online merchants are mimicking their brick-and-mortar predecessors to make online shopping more familiar, thus more attractive for consumers.