Prevention alerts are a valuable chargeback management tool. But unfortunately, not all chargebacks can be intercepted with an alert.

The Primary Reason Why Alerts Can’t Prevent All Chargebacks

To understand prevention alert coverage, it’s helpful to understand how they work.

Prevention alerts are provided by two vendors: Ethoca and Verifi. These vendors maintain networks that issuing banks can join. Banks can participate in Ethoca’s network, Verifi’s network, both networks, or neither network.

If a bank is a member of a network, the bank can send an alert when a transaction is disputed. However, if the bank is not part of a network, the dispute will automatically advance to a chargeback and you won’t receive an alert.

Since participation in a prevention alert network is optional, some issuing banks have opted not to use this service. Other banks don’t have the data capabilities or technology to support this service. This is the primary reason why you don’t receive an alert for all disputes.

Other Reasons Why Prevention Alerts Are Less Effective

If you sign up for both Ethoca and Verifi prevention alerts, you should be able to prevent about 30-40% of disputes from becoming chargebacks.

If your results are below this average, there may be other things happening:

You Don’t Receive Alerts From Both Ethoca and Verifi

The basic functionality of both alert providers is the same. However, the way they go about providing that functionality is slightly different.

VERIFI

  • Originally created to help merchants resolve issues resulting from non-fraud, consumer disputes
  • Strong presence in US, expanding into international regions

ETHOCA

  • Originally created to help merchants resolve issues resulting from legitimate credit card fraud
  • Strong presence in both US and international regions

If you want the most complete protection possible, we recommend you accept prevention alerts from both Ethoca and Verifi. This ensures you receive alerts for as many dispute categories and geographical regions as possible.

If you are looking for additional information on Ethoca & Verifi, please reference the following article: What is the difference between Ethoca & Verifi?

Some of Your Descriptor Variations Aren’t Enrolled

Billing descriptors play an important role in prevention alert functionality. A billing descriptor describes a payment and helps a cardholder identify the transaction on his or her bank statement.

Billing descriptors are what Ethoca and Verifi use to issue prevention alerts. Your processor will have a “main descriptor” on file. However, a single billing descriptor typically has several different variations. Your descriptor may change based on many different things such as the type of transaction you process (card-present, card-not-present), the card brand that issued the card (Mastercard, Visa), the type of card used to process the transaction (debit, credit), etc.

It is important to enroll all possible variations. We suggest you process a couple of test transactions with different cards issued by different brands to see how your descriptors display.

If a descriptor variation isn’t enrolled, you may not receive the most complete protection.

Please reference the following article on best practices for identifying your descriptors to have the most effective alert coverage: Billing Descriptors: Tips, Best Practices & Adding to Your Account

How to Identify Potential Problems

If you continue to have chargebacks associated with different bank identification numbers (BINs) that are not being intercepted by Ethoca and/or Verifi, our support team may be able to assist you with identifying the problem. We do this by performing a chargeback analysis.

In order to perform the analysis we require the following information:

  • The first 6 and last 4 digits of the payment card
  • Transaction date
  • Transaction amount
  • Chargeback date
  • Chargeback amount
  • Reason code and/or description

We need all of these pieces of information to review your data. If you are unable to locate the first six digits of the payment card in your processor’s merchant portal, check your gateway. If you have more than one chargeback you would like us to review, we ask that you provide this data in CSV or Excel format.

If you still have questions about prevention alert coverage, contact our client success team. We’ll review your results and help you optimize performance.

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