Chargeback prevention alerts: How they work & prevent chargebacks | ONE BCG


Prevention alert is a notification system for merchants in which a customer contacts their issuing bank to dispute a chargeback, and the information is transmitted to the merchant.

Chargeback management includes preventing chargebacks as well as resolving any unlawful transaction disputes that occur. Prevention alerts give merchants a significant time to decide on taking suitable action & respond before the issuer initiates the chargeback process. This efficiently avoids the lengthy and irrevocable chargeback process by resolving the issue before reaching the acquiring bank.


Why should you use prevention alerts? 

Chargeback prevention alerts allow merchants to resolve customer disputes before they turn into a chargeback. As a result, merchants get protected from the fines and penalties imposed by the card networks or their acquiring banks.



How do prevention alerts work?

Merchants pay for chargeback prevention alerts fees. These fees proved to be much more cost-effective in the long run than dealing with lost revenue & penalties associated with having your account suspended or terminated. 



How to prevent chargebacks

  • Abide by the rules: Payments are administered by standards that apply to everyone from processors, card network companies, to federal governments. You could face a chargeback if you don't abide by the rules, even if it's an unintentional violation.

  • Excellent customer service: Many customers may file a chargeback right away after being unsatisfied with the service provided. Putting the customer first, providing exceptional customer service can sometimes encourage the customers to work out the issue directly instead of requesting a chargeback.

  • Analyze historical chargeback data: It's not always easy to figure out why a consumer is disputing a transaction. Especially in cases of friendly fraud, it gets difficult to determine the actual cause behind the chargeback. Analyzing your past data can assist you in bringing clarity to the situation and identify red flags around the exact nature of the dispute that had occurred in the past.

  • Use clear billing descriptors: Providing a clear and understandable billing descriptor can assist customers in recognizing transactions efficiently. They help maintain the merchant's chargeback threshold ratio, save time and maximize revenue.

  • Determine if a chargeback is worth fighting: Fighting chargeback can be a demanding & intimidating task involving time and money. While chargebacks acquire added costs, they may not be worth fighting if the revenue recovered is insignificant.


Conclusion

Chargebacks are undesirable for merchants because they often result in additional costs, penalties that are detrimental to all merchants, irrespective of their economic status and business size. However, the majority of chargebacks can be avoided. Merchants can reduce the risk by closely adhering to business best practices and defining and maintaining protocols. Do you need a partner to help you identify potential fraud, implement & maintain business best practices? Get in touch with us.


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