Prevention service
Prevention service is a third-party system that notifies merchants of payment disputes before they escalate into formal chargebacks. When a cardholder contacts their issuing bank to dispute a transaction, the prevention service intercepts this inquiry and sends a real-time alert to the merchant, typically providing 24-72 hours to respond.
Prevention services act as intermediaries between issuing banks and merchants. When a dispute is initiated:
- The issuing bank sends the dispute information to the prevention service network
- The merchant receives an immediate alert with transaction details
- The merchant can issue a refund to resolve the dispute directly
- If refunded, the chargeback is prevented and never appears on the merchant's record
Key benefits
- Avoid chargeback fees
Prevent costly chargeback processing fees (typically $20-100 per chargeback) - Protect chargeback ratios
Keep dispute rates below card network thresholds that can trigger monitoring programs - Maintain processor relationships
Demonstrate proactive fraud and dispute management - Preserve customer relationships
Resolve issues directly rather than through chargeback processes - Reduce operational burden
Avoid time-consuming chargeback representment and documentation
Major prevention services include:
- Ethoca Alerts (Mastercard network)
- Verifi Rapid Dispute Resolution (RDR) (Visa network)
- CDRN (Chargeback Dispute Resolution Network) - Multi-network coverage