Chargeback Alerts: The Complete Guide

Chargebacks are a dreaded headache for merchants across all industries. These not only impact your bottom line but also your reputation with financial institutions and customers.

The good news? You can prevent up to 99% of disputes in the first place by harnessing the power of chargeback alerts, like those provided by Ethoca and Verifi. 

These are your first line of defense to safeguard both revenues and business relationships. We’ll show you how to use them below as we unpack the different types you have at your disposal and introduce our solution here at Disputifier that combines both Verifi and Ethoca alerts for comprehensive protection. 

Our chargeback company uses advanced technology to detect and alert you to potential chargebacks so you can resolve disputes swiftly and maintain good standing across the board. 

Not only does it prevent almost every dispute, but it can actively fight chargebacks on your behalf without you having to lift a finger. The best part? You only pay if we increase your chargeback win rate! Your free trial and the subsequent peace of mind await.

What are Chargeback Alerts?

First things first, what exactly are chargeback prevention alerts? As the name suggests, these are notifications sent to merchants when their online storefront has been faced with a dispute. 

This occurs when a customer disputes a transaction directly with their bank, and the bank takes preliminary steps to investigate and potentially reverse the charge. This gives you a small window of opportunity to respond to the chargeback claim before it progresses further.

Receiving an alert for a chargeback does not yet mean the money has been withdrawn from your account, but it does signify that you need to act swiftly to address the dispute. 

This could entail reversing the transaction and refunding the customer yourself to avoid escalation if you have not yet rendered services or delivered a product. Or, it could mean preparing evidence to refute the chargeback, such as proof of delivery, service completion, or terms of agreement.

The Different Types of Chargeback Prevention Alerts

There are really just two types of chargeback alerts you need to know about - Verifi and Ethoca. We already have a separate article on Ethoca alerts, but we’ll highlight them below here as well.

Verifi Alerts

Verifi, owned by Visa, offers two primary programs for managing chargebacks: the Cardholder Dispute Resolution Network (CDRN) and Rapid Dispute Resolution (RDR). 

Both programs are designed to intervene before a chargeback becomes finalized, but they operate slightly differently:

  • CDRN: Allows merchants to directly receive and respond to chargeback alerts from issuing banks. Merchants can review the alert and decide whether to issue a refund or let the chargeback process proceed. This system gives merchants a proactive role in the dispute resolution process.
  • RDR: This newer system is more automated. When a dispute arises, the RDR program evaluates it based on predefined rules set by the merchant. If the dispute meets these criteria, an automatic refund is triggered, resolving the issue instantly without further merchant intervention. This not only saves time but also reduces the operational burden on merchants.

Verifi offers a unique pricing system based on your risk level - which is known as your MCC code. The higher the risk, the more you pay. You’ll fall into one of three categories, with most businesses coming in at either tier 1 or tier 2 (tier 3 is extremely risky).

Ethoca Alerts

Owned by Mastercard, Ethoca works similarly by providing early warning alerts for disputes. When a customer initiates a chargeback, Ethoca alerts the merchant, who can then decide to refund the transaction to prevent the chargeback from affecting their ratio.

What’s great about Ethoca alerts is how quick and easy they are to set up. You can get your alerts configured in about 24 business hours through our software!

Just as with Verifi, you can also customize what happens to each alert. For example, you can auto-refund all alerts with certain criteria or be notified to take manual action yourself. 

Do You Need Both?

While both companies more or less do the same, we’ve seen customers enjoy a chargeback reduction of 80% or more when combining both Visa and Mastercard. After all, just about all US-based banks are partnered with these companies.

How Do Chargeback Alerts Help Protect Your Business?

You may already be starting to see why chargeback prevention alerts are such a powerful tool in your fraud and dispute prevention strategy. 

From protecting against losses to maintaining good relationships with customers and financial institutions, where’s why this is an area worth investing in for your business.

Immediate Action to Prevent Losses

Chargeback alerts give you an important advantage in fighting disputes: time. You’re notified immediately of a potential issue so you can act fast, whether that entails issuing a refund, halting the delivery of goods, or engaging directly with the customer to resolve their concerns. 

This timely intervention often prevents the chargeback from proceeding, saving the merchant from the financial loss of both the transaction amount and any accompanying fees or penalties. Chargebacks can be expensive, after all.

Enhancing Customer Relationships

While some chargebacks are associated with fraud, a good chunk is the result of a customer having a legitimate issue. Maybe their order didn't arrive, or perhaps they’re simply not satisfied with their goods. 

Either way, these alerts allow you to be proactive in your customer support efforts and reach out to the customer even though they may have bypassed you and gone straight to initiating a dispute. You can resolve misunderstandings or errors that would otherwise escalate into more serious complaints.

This responsive action can convert a potentially negative customer experience into a positive one, enhancing customer loyalty and encouraging repeat business. 

A perfect example of this is being alerted to orders over a certain dollar threshold or transactions being flagged for mismatching delivery address and billing address details. 

Calling the customer to confirm they are actually placing the order shows good faith and will leave your customers feeling like they’re working with a trustworthy business. 

Maintaining Good Standing With Financial Institutions

Regular use of chargeback notifications is one of the best ways to prevent chargebacks - which not only saves you money but also helps you stay in good graces with banks and credit card processors.

Financial institutions monitor your chargeback ratio closely as an indicator of your risk level. A high ratio can lead to increased processing fees or even termination of processing privileges. You can keep this ratio low by effectively managing disputes through chargeback prevention alerts.

Financial institutions appreciate when merchants take chargeback disputes seriously, as it aligns with their standards for transaction integrity and customer satisfaction.

Prevent Chargebacks and Enjoy Peace of Mind By Leveraging Disputifier’s Alerting System!

Ready to incorporate chargeback alerts into your fraud and dispute management system? It’s as easy as integrating with Disputifier, the best chargeback company with a proven track record of preventing up to 99% of disputes.

Our advanced alerting system is designed to significantly reduce the incidence of chargebacks by providing early warnings whenever a dispute is likely to occur. 

It’s powered by the renowned Ethoca and Verifi alerts, which means you can rest assured you’re getting the best information with a low likelihood of false positives. Here’s how it works:

  • Real-Time Monitoring: Disputifier scans and evaluates transactions as they occur based on risk factors like unusual spending patterns, geographic anomalies, and known fraud markers.
  • Automated Alerts: You’re automatically sent an alert when a potential issue is detected. This includes detailed information about the transaction you can review and act quickly - whether that means reaching out to the customer for clarification, halting the shipment of goods, or preemptively issuing a refund.
  • Customization: We allow you to customize the parameters of what triggers an alert, tailoring the system to the specific needs of their business and customer base. This ensures you receive relevant and actionable alerts, thereby preventing unnecessary disruptions and focusing resources on genuine threats.

You won’t have to stress about chargebacks or fraud putting a strain on your business resources any longer. But in the case of a chargeback slipping through the cracks, we will fight the dispute on your behalf through an automated, proven system.

Disputifier generates a customized response tailored to the specifics of the case. It’s based on an analysis of hundreds of data points, ensuring that it addresses the particular reasons for the chargeback and is backed by relevant evidence.

Everything is automated, including the submission of the chargeback response to the bank or card issuer on your behalf. The system continues monitoring the case after submission analyzing feedback to improve future responses and strategies.

Like a fine wine, it gets better with time thanks to our A/B testing that constantly optimizes responses and strategies. So how often do merchants win chargeback disputes with Disputifier? Our customers see as high as 70% win rates compared to the industry average of 10-30%.

Plus, you only pay we increase your win rate, so you’ve got nothing to lose. Get started with your free trial today and discover the Disputifier difference firsthand!

Bringing Our Guide on Chargeback Prevention Alerts to a Close

In summary, chargeback alerts can be your saving grace if you deal with frequent fraudulent transactions or disputes. They allow you to act immediately when a transaction looks suspicious or when a customer files a dispute, solving the problem swiftly before it escalates. 

This saves you money while supporting your relationship with customers and financial institutions alike. And with Disputifier, leveraging these chargeback notifications couldn’t be any easier.

Our blog has more resources on how to win a chargeback, including setting up chargeback insurance, forming your chargeback email to customer, and even what happens if you lose a chargeback

Fortunately, you won’t have to stress about that any longer with Disputifier working around the clock to protect your business. Take control of your transaction security today by implementing Disputifier’s comprehensive chargeback prevention system!

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