Post-authorization tools
Post-authorization tools help merchants identify and resolve customer disputes after a transaction is authorized but before a chargeback is filed. These tools provide early alerts when cardholders contact their bank to dispute a charge, giving merchants a chance to issue a refund and avoid the chargeback process entirely.
How they work
When a cardholder initiates a dispute with their issuing bank, post-authorization alert services notify the merchant in real-time. The merchant can then review the dispute and choose to:
- Issue an immediate refund to resolve the issue
- Provide additional transaction details to the customer
- Allow the dispute to proceed to a formal chargeback if warranted
Benefits
Resolving disputes before they become chargebacks helps merchants avoid chargeback fees, prevent increases in their chargeback ratio, and maintain better standing with payment processors. This is particularly valuable for disputes caused by merchant errors (wrong amount charged, duplicate transactions) or friendly fraud (customer doesn't recognize the charge).
Common examples: Ethoca Alerts, Verifi Rapid Dispute Resolution (RDR), and Visa's Consumer Dispute Resolution Network (CDRN).