It is common to confuse the purpose of a retrieval request, a prevention alert, and a chargeback because they are interrelated. This article features an in-depth description of these services, how they differ, and suggested best practices for handling each of them.
A retrieval request is a formal request sent by the cardholder’s bank to obtain additional transaction information. Retrieval requests are typically sent when there is confusion about a purchase or when fraud is suspected.
Response expectations differ by card brand (for example, Visa® or Mastercard®). Typically, banks expect you to respond with basic transaction information or a copy of the receipt.
If you want to reduce the risk of the case escalating to a chargeback, you can respond with more than just the minimum requirements. One option is to respond with order data and other relevant information, similar to what you would provide for a dispute response. Another option is to issue a refund and respond to the retrieval request with proof that you credited the cardholder’s account.
A retrieval request does not impact your chargeback ratio. However, if you do not respond, or if the information you send is deemed unsatisfactory, the case can automatically advance to a chargeback.
A prevention alert, also referred to as a pre-chargeback alert, is a notification. It is triggered when a customer disputes a transaction or when an issuing bank discovers a transaction is fraudulent.
Prevention alerts give you the opportunity to refund the transaction and potentially stop the dispute from progressing to a chargeback.
Alerts do not impact your chargeback count or ratio. However, if you do not refund the transaction or respond within the submission deadline, the case will likely advance to a chargeback.
Two primary vendors provide prevention alerts: Ethoca and Verifi. It is important to note that not all disputed transactions trigger a prevention alert. Ethoca and Verifi are actively increasing their coverage networks and currently cover approximately 30% to 40% of disputed transactions.
A dispute advances to a chargeback if other resolution tactics are not successful.
Unlike with prevention alerts and retrieval requests, we strongly advise against refunding a transaction once a chargeback is filed. Typically, a processor will automatically debit your merchant account for the amount of the dispute at the time the chargeback is initiated. Therefore, if you also issue a manual refund, you will incur a loss for double the transaction amount.
Another notable difference between retrievals, alerts, and chargebacks is that a chargeback directly impacts your chargeback-to-transaction ratio.
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