Prevention alerts are a highly valuable chargeback reduction tool capable of effectively stopping certain chargebacks from happening. However, to achieve the best possible results, you must understand how the alert lifecycle works.
The primary goal of the prevention alert service is to enable merchants to resolve disputes before they advance to chargebacks. The most common way to resolve issues with prevention alerts is to refund the disputed transaction.
Prevention alert networks connect merchants with issuing (cardholder) banks. Through these networks, participants can exchange information and reduce the chance of incurring chargebacks.
Two primary vendors maintain prevention alert networks: Ethoca and Verifi. Banks and merchants have the option to participate in Ethoca’s network, Verifi’s network, both networks, or neither network.
If both you and the bank are enrolled in the same network, the bank can send an alert when a transaction is disputed. However, if you are not part of the same network, the dispute automatically advances to a chargeback, and you do not receive an alert.
Because participation in a prevention alert network is optional, some issuing banks have chosen not to use this service. Other banks do not currently have the data capabilities or technology to support it.
Billing descriptors play an important role in prevention alert functionality.
A billing descriptor describes a payment and helps the cardholder identify a transaction on their bank statement.
Now that you understand what billing descriptors are, the following workflow explains how they are used in the prevention alert lifecycle:
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You share your billing descriptors with Equifax.
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Equifax enrolls your billing descriptors in the Ethoca and/or Verifi platforms.
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A cardholder contacts their bank to dispute a purchase made at your business.
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The issuing bank initiates the dispute process.
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An alert vendor intercepts the dispute.
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The alert platform matches the descriptor for the disputed transaction to the descriptor enrolled for your business.
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The platform sends you a prevention alert.
Merchants must respond to all prevention alerts. This is a critical part of the process—your response helps stop the dispute from becoming a chargeback. The following outlines the standard response workflow.
The alert technology (Ethoca and/or Verifi) notifies you that an alert has been issued. The Chargeback Portal receives this notice on your behalf and displays it within our platform.
When you receive an alert, it typically means you must complete an action in your CRM or order management system. A prevention alert gives you the opportunity to resolve the dispute; if you do not, the case likely advances to a chargeback.
The most common reactions to an alert include:
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If the alert is valid, refund the disputed transaction.
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If the alert is for a pending transaction, void the transaction.
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If you have already refunded the transaction, no CRM action is required.
Specific transaction information is included in the alert notification to help you locate the order in your CRM. Data typically shared includes:
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The first six and last four digits of the credit card number.
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The transaction date.
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The dispute amount. (This can differ from the transaction amount.)
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The customer name (included only with certain alerts).
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The acquirer reference number, or ARN (included only with certain alerts).
Note
If you use our fully automated service, the technology refunds or voids the transaction on your behalf. However, if you use our PreventFlow feature, you need to act quickly. Typically, if the issuing bank does not see a refund posted to the cardholder’s account within 24 hours of initiating the alert, the case advances to a chargeback. Regardless of the workflow you use within the Chargeback Portal, you must settle your transaction batches promptly so the refund posts to the cardholder’s account within the required time limit.
You must inform the alert vendor and the issuing bank of the action that was taken. Your response lets the bank know if you have addressed the issue, which dictates whether the case needs to advance to a chargeback.
Note
If you use our fully automated prevention alert service, the technology responds on your behalf. However, if you are using our PreventFlow feature, you must respond to alerts manually.
Be sure to resolve each alert as soon as you have reviewed the case and decided which action to take. For best results, we suggest responding to all alerts within 20 to 24 hours of receiving them. You can sign up for our daily prevention report emails to be notified the moment you receive an alert.
It is important to remember that once you respond to an alert, you are unable to edit the outcome you selected. Resolutions are submitted to the cardholder’s bank in real time.
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