How do Ethoca alerts fight fraud and stop chargebacks?
Industry
23 Dec 2023
6 min
Andrii Romanyshyn
Head of Chargeback Prevention, Solidgate
Learn how Ethoca chargeback alerts help merchants prevent fraud, reduce chargebacks, and improve customer relations, ensuring smoother transactions and lower costs.
Are you looking for an efficient, cost-saving way to protect your business from chargebacks and false declines? Here comes the Solidgate prevention alerts – a on guard for your online business.
A unified, all-in-one solution aimed to prevent chargebacks and customer dispute losses before they become your headache. No more separate tools for verification and alert unification. If you want to learn more about the key to preventing fraud and customer disputes, put aside doubts and continue reading our guide.
What is a chargeback prevention alert?
Before we explore the pros of Ethoca alerts, let’s define a chargeback prevention alert. Services known as chargeback prevention alerts warn merchants when a cardholder files a dispute over one of their transactions.
This tool enhances merchant-issuer collaboration and enables the merchant to intervene and directly resolve the issue with the customer, thereby preventing chargebacks and false declines. This significantly reduces the number of fraud and customer disputes.
How do alerts help prevent chargebacks?
Let’s take a closer look at the chargeback issuing process. For instance, the cardholder complains to the bank about a fraudulent charge on their account. Then, the issuing bank initiates a chargeback and cancels the transaction, creating a poor cardholder experience.
Being a part of the chargeback alert system allows the bank to warn the alert provider before the final stage. Then the alert provider notifies the merchant. If the transaction still needs to be fulfilled, the merchant can cancel it and offer a refund option to the cardholder, eliminating the need for a chargeback.
N.B. A refund is a more beneficial option for merchants than a chargeback as it doesn’t include any . After all, it excludes the possibility of merchant account termination and doesn’t spoil account history details.
What are Ethoca alerts?
Ethoca is a Toronto-based technology solution provider focused on eCommerce fraud chargeback prevention, chargeback, and false decline avoidance, as well as lost income recovery from costly fraud claims. Since its founding in 2005, Ethoca's main customers have been e-commerce merchants and issuer network partners.
Ethoca alerts enable your online business to resolve disputes directly with customers. As a result, the Ethoca collaboration network significantly boosts the trustworthiness and relationships with issuing banks.
In addition, Ethoca alerts help avoid penalties, fines, and fees. All in all, this experience leads to improved consumer clarity and a better cardholder experience.
How do Ethoca alerts work?
Ethoca Alerts is a collaborative tool that enables merchants, acquirers, and issuers to share fraud and dispute data, minimizing or even eliminating their negative influence on your online business. This efficient, cost-saving tool enables a much faster dispute resolution process and eliminates the need for chargebacks.
Verified card fraud incidents from Ethoca network card issuer customers are quickly sent to retailers, allowing both to minimize fraud and chargeback costs dramatically. So what are the working principles of Ethoca alerts? Here is the typical process for improving an order and account history.
- Ethoca gets a notification from the issuer of a confirmed cardholder dispute or fraud.
- Ethoca sends near-real-time alerts to the merchant right away.
- Merchants may stop transaction fulfillment and suggest a refund to the customer. This might help prevent or address fraud and customer disputes. Fraudsters are not allowed!
- Ethoca sends an instant alert outcome to the issuer. Merchant and issuer liable losses are recovered by the card issuers on first contact with the cardholder.
Ethoca alerts for merchants
Businesses with a validated fraud alert can suspend fraudulent order fulfillment and give a refund to the customer. As a result, a merchant can resolve the dispute, reduce inventory loss, and save time, money, and nerves on the chargeback process. Then, using data directly from the issuer will help to update fraud rules and avoid future fraud cases.
In case of receiving an alert, the merchant undertakes four steps:
- Suspend the service or cancel the order.
- Use link analysis trying to uncover more fraudulent transactions.
- Revise and update fraud policies to prevent future fraud.
- Issue a refund or credit to the consumer (without any need for a chargeback).
Ethoca alerts for issuers
eCommerce fraud has an immediate negative impact on your issuing company. Processing chargebacks and operating costs rise, while you’ll keep taking losses on low-value and 3-D Secure transactions. Also, increased fraud results in higher decline rates.
Customers suffer due to lower acceptance and interchange income. These reasons are enough to undertake the necessary actions to stop losing opportunities immediately. Aren’t they?
By joining Ethoca’s network, you enable merchants to act quickly on confirmed fraud intelligence, providing you with immediate, proven benefits.
All you need is to transmit confirmed fraud evidence to Ethoca, while Ethoca Network delivers it to the merchant network partners as near-real-time alerts. It’s that simple!
The sooner you submit your proven fraud data, the sooner merchants can take action to halt fraud, refund transactions, and reduce chargebacks. This increases acceptance while decreasing the cost of your issuing business.
What does it take to start with Ethoca?
Begin forwarding confirmed fraud transactions to Ethoca. The sooner you provide them with your fraud data, the sooner online businesses on the Ethoca Network can prevent the scam with Ethoca chargeback alerts.
You’ll know you may avoid processing the chargeback in the following cases. As soon as merchants acknowledge that they have stopped fulfilling the fraudulent order.
Or in case of reimbursing the transaction using the Ethoca Portal. Ethoca will work with you to maximize your performance and continuously improve your fraud-loss prevention outcomes.
Ethoca chargeback alerts benefits
What are the benefits of using Ethoca alerts for your online business? Protect your revenue income with Ethoca chargeback alerts, fighting chargebacks while saving relationships with your bank. At the same time, among other privileges from using chargeback alerts are:
- To avoid false alarms, all chargeback warnings are linked to an existing chargeback. This eliminates the possibility of the network mistakenly flagging transactions.
- Real-time loss prevention: Avoid additional billings and order fulfillment losses by terminating rebills following an initial chargeback notification.
- More efficient staff allocation: Reduce your staff's chargeback management workload and let them focus on growing your business.
- Fraud and customer disputes are resolved quickly and efficiently: The essential advantage of chargeback prevention alerts is that they allow merchants to handle customer complaints directly, without triggering a chargeback from the card networks or acquiring banks’ perspectives.
Solidgate meets Ethoca alerts
Solidgate give your business the option to use Ethoca's chargeback alerts efficiently, reducing fraud and chargebacks without any additional effort.
Eliminate the need to handle all the issues related to the Ethoca registration and entrust us with this, so you can focus on what makes your online business grow.
Solidgate is your reliable, trustworthy solution to reduce fraud. An efficient all-in-one solution for optimizing fraud and chargeback costs and addressing business-related chargeback issues. Prevent and resolve fraud and chargebacks easily with Chargebackhit!
Conclusion
Ethoca chargeback alerts offer merchants an excellent, cost-saving solution for managing disputes and friendly fraud while lowering chargeback rates.
Nevertheless, it does not address the underlying reason for chargebacks. You can undertake a few basic steps to prevent chargebacks:
- Give a detailed explanation of the items and services.
- Make customer service accessible.
- Respond to client communications promptly.
- Before any transactions are completed, establish clear and detailed terms of service.
- Address internal issues like fulfillment, descriptions, or quality assurance shortcomings as soon as possible to avoid chargebacks.
Any other ways to boost your business and reduce fraud and customer disputes with Ethoca alerts? Surely, there is a much shorter way – delegating all your chargeback-related tasks to Chargebackhit, a top-notch customer dispute resolution tool for your business.
Frequently asked questions
Every Ethoca Alert includes the following details: Credit Card Number, Authorization Date/Time, Transaction Amount, and Merchant Descriptor.
Via Portal – Ethoca sends an email to the merchant once a new Ethoca Alert becomes available. To access the portal, the merchant clicks a link in the email message and enters their login and password. Once on the portal, the merchant can view and act on any Ethoca Alerts. Also, Ethoca includes a web service API that may be used to ingest and act on Ethoca Alerts automatically.
Just refund the transaction right away and point the outcome in the Ethoca portal (or API) with the “Stopped” comment field set to “Refunded on date/time.”
The greater the number of transactions, the higher the coverage. Customers in the United States are more likely to be served by the collaboration network than those in other countries. Established firms may have better coverage than new merchants.
Ethoca alerts’ preventative cost depends largely on the number of notifications you receive. On average, the cost of each alert received runs between $35 and $40.
Average time for new merchants: 45 – 60 days. Existing merchants that set up alerts: 20 – 30 days. Existing merchants switching alert providers: without delay.
