Most merchants are reactive when it comes to chargebacks because they respond after they’re filed, which might be fine if they happen infrequently.
However, if chargebacks are common, merchants might benefit from implementing prevention alerts.
What value do prevention alerts bring?
✔️ Keep chargeback counts low. The notifications can help merchants stop chargebacks before they count against them.
✔️ Provide a better customer experience. Quickly and proactively respond to customer complaints.
✔️ Take quick action. In the normal chargeback notification process, it can take 2-5 weeks to be notified. Prevention alerts arrive within 24 hours of a dispute.
✔️ Save on fulfillment costs. If an order is disputed, it can be stopped before it ships.
Now that we know what prevention alerts can do, let’s talk about how they work.
Prevention alerts allow issuing banks to communicate with merchants in real-time. When a cardholder disputes a transaction, a prevention alert network like Verifi or Ethoca alerts the merchant. The merchant can then issue a refund and notify the alert network, thereby avoiding the chargeback.
Merchants can work directly with Verifi and/or Ethoca, or these services can be obtained through a platform like Midigator. Here are a few considerations as merchants navigate these choices:
✔️ Verifi is more commonly used if most of the chargeback reason codes are for consumer disputes predominantly taking place in the U.S., while Ethoca handles more chargeback reason codes for unauthorized transactions globally. These are generalities – there is some overlap between these two networks.
✔️ Sometimes, Verifi and Ethoca have volume requirements when merchants work with them directly. These may be avoided by enrolling through a provider like Midigator.
✔️ The alert functionality merchants have access to will be the same whether they work directly or indirectly with an alert network. When used through Midigator, they have access to the added bonus of reporting & analytics.
✔️ Platforms like Midigator can also automate the alert process, which is not offered directly. This technology reduces the risk of errors, improves outcomes, and cuts back on time-consuming, labor-intensive tasks.
✔️ Accessing these tools through a platform like Midigator also has the benefits of ease of use and visibility. It is much easier to manage notifications from both providers on a single platform, and the consolidated data makes it much easier to spot trends and threats.
✔️ Lastly, pricing is set by Verifi and Ethoca, whether the merchant is accessing these services directly or through a reseller like Midigator.
Even though there are fees for prevention alert services, they can pay for themselves or even produce a return when closely managed. The key is to select the option that best matches the merchant’s needs, and then consistently monitor to ensure the solution continues to deliver results. It is not set-it-and-forget-it.
Do your e-commerce merchants find themselves in this seemingly helpless situation? They accept payments for legitimate sales, only to have cardholders dispute the transaction, claiming fraud. There are products that