Protecting Revenue with Enhanced Smart Prevention Alerts

November 19, 2024

Chargebacks are a persistent problem for merchants, not only because of lost revenue, but also because an excessive chargeback ratio can lead to significant fines. For merchants at risk of exceeding chargeback ratio thresholds, prevention alerts can be a highly effective solution. But not all alerts are the same.

The Importance of Chargeback Prevention

Visa and Mastercard have established chargeback monitoring programs to ensure that merchants keep their chargeback ratios low, which they see as essential for maintaining the reputations of their networks and ensuring customer trust in credit card payments.

When a merchant’s chargeback ratio exceeds established thresholds (0.9% for Visa and 1.5% for Mastercard) for several months in a row, they can be enrolled in these monitoring programs, where they face fines for continuing to exceed these thresholds.

In some cases, businesses can even have their merchant accounts terminated by their acquirer for continuing to have excessive chargebacks.

When this happens, the merchant is added to lists such as Mastercard’s MATCH (Member Alert to Control High-Risk Merchants) list or VISA’s VMSS (VISA Merchant Screening Service). Being listed in MATCH, VMSS etc. can significantly hinder a merchant's ability to open new accounts with financial institutions which in turn puts their business at further risk.

Chargeback prevention alerts are a vital tool for merchants aiming to reduce their chargeback ratios. These alerts put the chargeback process on hold, notifying merchants of disputes before they officially escalate into chargebacks that would count against their ratio.

With this early warning, merchants can issue a refund to resolve the dispute, avoiding a chargeback. Although merchants must pay fees for these alerts, the cost is significantly lower than the expenses tied to excessive chargeback programs

There are two major alert networks, Verifi and Ethoca. There are also other ways of resolving incoming disputes with refunds, such as Visa’s Rapid Dispute Resolution (RDR). Some providers, such as Chargeback Gurus, can integrate all these channels under a single cohesive system while providing additional benefits to merchants.

What Are Enhanced Smart Prevention Alerts™?

With Chargeback Gurus Enhanced Smart Prevention Alerts™, merchants can take advantage of industry expertise to catch the alert notifications that slip through the cracks of automated systems, such as partial disputes and mismatched transaction dates. Combined with access to the world’s largest alert networks, merchants get more complete coverage than with any other provider.

Chargeback Gurus also monitors each individual Merchant ID (MID) and notifies the merchant if a chargeback ratio is close to exceeding the threshold.

Merchants can take timely corrective actions to avoid being placed in monitoring programs simply by staying informed at all times.

This service requires daily access to the merchant’s transaction and chargeback data to function effectively. This data is essential for providing accurate and timely alerts, ensuring merchants can respond swiftly to potential issues.

All data is handled with the utmost care and security, adhering to globally recognized standards like PCI DSS (Payment Card Industry Data Security Standard) and GDPR (General Data Protection Regulation), ensuring compliance with privacy and data protection laws.

Additionally, SOC 2 Type 2 certification ensures the service maintains stringent controls for data security, integrity, and confidentiality. Importantly, no personally identifiable information (PII) is collected, preserving the privacy of all stakeholders.

Chargeback Gurus provides a suite of supporting services tailored to enhance the overall chargeback prevention process. These services streamline alert resolution, and data-driven decision-making and help merchants stay compliant and be proactive in preventing chargebacks:

Services Offered Under Enhanced Smart Prevention Alerts™

Enrollment and Management Services

Chargeback Gurus manages the entire process of enrolling and unenrolling merchant descriptors, BINs, CAIDs, and other identifiers required for various chargeback prevention services.

This service ensures that merchants are properly integrated into prevention programs which allows them to receive the full benefits of these services. Chargeback Gurus simplifies the process for merchants, enabling them to focus on their core business activities by handling these technical aspects.

Alert Resolution Services

Chargeback Gurus offers flexibility in how alerts are managed, providing both fully managed and self-managed service options. In the fully managed service, Chargeback Gurus takes full responsibility for resolving alerts based on predefined rulesets agreed upon with the merchant.

This option is ideal for merchants who prefer a hands-off approach and want experts to manage the complexities of chargeback prevention. For merchants who prefer more control, the self-managed service allows them to resolve alerts independently using the FPRONE™ platform. This option provides the necessary tools and support for merchants to manage alerts effectively while maintaining autonomy over the process.

Consultation and Data Analysis

In addition to providing technical tools, Chargeback Gurus also offers personalized consultations based on a merchant’s unique data. This service ensures that merchants receive tailored advice and strategies to enhance their chargeback prevention efforts.

By analyzing transaction data and identifying trends, Chargeback Gurus provides actionable insights that help merchants reduce chargeback rates and protect their business. These consultations are designed to add value by leveraging data-driven strategies that align with the merchant's specific needs and objectives.