Chargebacks are a serious threat to businesses that cannot be simply neglected. But why are chargebacks so dangerous, and how can you protect your business from them? Today, we will talk about chargeback prevention services, their benefits, and why businesses need them. So, without any further ado, let us dive right into this topic.
What Are Chargeback Prevention Services?
First things first, let’s figure out what chargeback prevention services are. However, to answer this question, we need to define a chargeback first. Basically, a chargeback is the procedure of refunding a customer after a dispute. At first, everything seems pretty decent since chargebacks protect customers, but businesses often suffer from financial losses due to chargebacks, especially if those are fraudulent, and this is where chargeback prevention solutions come in handy.
Thus, chargeback prevention services are the tools that help prevent disputes at early stages and, therefore, protect businesses from financial losses, penalties, approval rate decrease, and other unpleasant consequences of chargebacks. The mechanism of most chargeback prevention alerts is the following:
- The issuer notifies the prevention service about a chargeback
- The service sends an alert to the merchant
- Merchant refunds a customer to prevent the dispute (chargeback procedure)
- The issuer receives an alert outcome from the prevention service
Such a simple mechanism provides decent protection against both friendly and chargeback fraud, which makes chargeback prevention services a must for pretty much all online businesses.
Benefits of Chargeback Prevention Solutions
It goes without saying that chargeback prevention solutions are good for your business, but what are the actual benefits they provide? Let’s see:
- Financial loss prevention. Disputes often result in rather significant financial losses, including dispute fees, refunds, penalties, etc., but a good chargeback prevention solution will help you avoid those.
- Approval rate increase. A high approval rate is important for your merchants’ proper work and security, and with a chargeback protection service, you can be sure disputes will not decrease your merchants’ approval rates.
- Penalty reduction. With a chargeback protection solution, disputes do not reach merchants, which results in fewer penalties.
- Improved reputation. Finally, chargeback prevention alerts are a sure way to secure the spotless reputation of your business.
As you can see, the benefits are undeniable and are definitely worth the sometimes costly price of chargeback protection alerts, so if you still do not have such a service, it’s time to consider getting one.
What Chargeback Protection Service to Choose?
Today, we have a wide selection of chargeback protection services to choose from, but let’s be honest — not all of them are worth the money. So, what services should you pay attention to and why? Let’s take a look at the best chargeback prevention solutions available on the market.
Ethoca
Ethoca is one of the best solutions for Mastercard payments, and it reliably secures your merchants from friendly fraud and fraudulent disputes. Additionally, Ethoca’s Fraud Insights feature provides the merchants with all the required info about decline and chargeback data as well as Mastercard fraud in order to prevent and remedy fraud. Finally, you can get Ethoca alerts within Germius CRM, which ends up being more convenient and affordable.
Also read: How To Avoid And Prevent Chargebacks?
Verifi
Verifi is another decent chargeback prevention solution by Visa. It is a reliable ally in the fight against chargebacks that comes with a wide variety of alerts, such as RDR, CDRN, Order Insight, and Compelling Evidence 3.0. In particular, rapid dispute resolution (RDR) automatically distinguishes fraud and non-fraud disputes and resolves pre-dispute cases. At the same time, Order Insight provides complete information about a purchase from sellers, which significantly minimizes disputes at first customer inquiries. Lastly, just like Ethoca, Verifi is available within Germius CRM.
Kount
Kount is considered to be the number one choice for e-commerce platforms, and it has a reason to be so. The service provides multiple automated and AI-operated solutions that help fight chargebacks and prevent fraud. In particular, Kount’s algorithms analyze chargebacks for patterns, which helps prevent most cases of chargebacks, including friendly fraud.
Of course, there are many other chargeback protection services, and we do not insist on choosing only the above-mentioned ones. However, the three services we talked about above are surely worth your attention since they can provide reliable chargeback protection for your business regardless of its type or size.
Final Thoughts
Chargeback protection is among the top priorities for every business owner, and it just cannot be neglected. In fact, in the worst-case scenario, your merchant accounts can simply get blocked due to too many disputes. So, make sure to protect your merchants and your business with a reliable chargeback prevention solution.
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