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The Perks of Preventing Chargebacks with Verifi and Ethoca

Around the world, retailers faced a dire choice during the pandemic: to adapt or face the prospect of losing their business. The Covid-19 pandemic forced businesses to rethink their sales strategies, adjust their policies to accommodate homebound consumers, and focus on other channels like eCommerce.

Recalibrating for eCommerce, although a step in the right direction, came with its own drawbacks, one of which is “friendly fraud”, or chargebacks as they are popularly called. Initially introduced as a method of consumer protection, chargebacks refer to customers asking their credit card company to reverse a charge on their card. Chargeback requests can have legitimate reasons behind them, such as order fulfilment issues or merchant errors. Some, however, can be maliciously or fraudulently submitted for the purpose of keeping both the products and the funds.

A chargeback report from 2021 shows that merchants continue to experience uncertainty in this area, supported by 25% more chargeback activity attributed to COVID-19. The reality is that there is no foolproof way to prevent chargebacks, but this doesn’t mean retailers cannot minimise their occurrence.

And this is where chargeback alerts services come into play. The best known ones are Verifi, provided by Visa and Ethoca, provided by Mastercard. We’ve covered the basics of both products in a previous article, but read on for a deeper understanding of the benefits of using these services.

What are the benefits of a chargeback alert service?

The main benefit of these alert services is the reduction of chargebacks. Ethoca reports that during the last financial year, their customers were able to prevent 7.1M incidents of friendly fraud, which is an average of 591,600+ cases per month. And Verifi claims that for every $1 disputed, merchants and issuers incur $1.50 in more costs. Both tools often help businesses resolve consumer disputes without the need for chargebacks.

They help retailers resolve disputes without sacrificing revenue. The customer no longer needs a refund once they recognize and understand the charge. This equals a good return on investment for the retailer.

They offer real-time insights to issuers, and as a result, customer disputes are notified to you instantly. Since time is of the essence in chargeback cases, the customer can be preemptively contacted before the chargeback occurs, which often takes between 2-5 weeks to be resolved.

A reduction in the number of declines is also a benefit of using these alerts as they help reduce incorrect claims. If there is a more accurate understanding of dispute liability, issuing banks will be less inclined to decline good transactions.

These real-time alert services will help you save money from fulfilling orders. Customers often dispute a purchase before it has been fulfilled. If real-time alerts are sent, fulfilment may be stopped before products are shipped. As a result, fulfilment costs, shipping costs, and product costs can be retained.

Alerts help you offer your customers a better experience by being able to react quickly to their feedback and address any potential issues early. You will make your clients feel valued and potentially keep them loyal.

What else can you do to prevent chargebacks?

In addition to enabling these efficient alert services, there are certain business behaviours you can adopt to prevent chargebacks:

Be transparent

Be transparent with your terms and conditions and contact details. If these are hard to find, your customers will revert to their banks for help. Make it accessible for customers to return items.

Provide great customer service

It’s risky to delay customer refunds, fail to provide customers with tracking numbers, or miss on detecting multiple orders (which can occur when a customer clicks the Submit button twice, for example). These are some of the pitfalls of chargebacks.

Align your business name with your transactions

Customers are more likely to question payment if they can’t recognise your business’s name on their credit card statement. Verify that your credit card processor has registered your account under the same name or make this clear to your customers on their invoices.


Be ethical

Don’t engage in sales and marketing techniques that are borderline ethical, such as adding shady terms and conditions in the fine print, where the customers will have difficulty noticing them. Adding to this list is offering a subscription model with a free trial and then a charge that can be easily missed. It’s a sure way to lose customer trust and loyalty.

Where to find out more about managing chargebacks

  • If you’re interested in learning more about this chargeback prevention tool, contact our team of experts.

  • You can find a checklist to protect eCommerce sales here.

  • And if you are working in the restaurant industry, we’ve got a dedicated resource here to help you.

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Security is our top priority at Trust Payments and we strive to ensure that all data is kept secure at all times We keep all customer data safe with AES256 encryption, SSL Certificates, and a minimum of TLS1.2, between your website and our datacentres.

Our systems are scanned quarterly using the Qualys PCI Platform, an independent Qualified Security Assessor (QSA) and approved vendors – Omnicybersecurity (UK) & Forgenix (US) – to ensure compliance with the security requirements of the card schemes.

We follow a number of rigorous security procedures on a daily basis including, but not limited to, continuous monitoring of our perimeter, dark web monitoring, and internal checks to ensure that CIA triad is maintained at all times.

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