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Overview
Optimize chargeback prevention and revenue recovery with Chargebackhit

Chargebackhit is a unified source of data with a layer of proprietary technology aimed at boosting the efficiency and Glossary
ROI is a ratio that shows the return on an investment in relation to its value.
ROI
of chargeback prevention. It leverages the two main chargeback Glossary
Chargeback notifications are messages that the merchant receives informing them that a chargeback has occurred or will soon occur.
alert
networks, Visa’s Verifi and Mastercard’s Ethoca, which offer global coverage by comprising various issuing banks worldwide, with many of them participating in both networks.

Chargebackhit empowers merchants by offering proactive assistance in the early stages of the dispute-resolution process. The streamlined approach helps merchants to resolve issues promptly, without the need for time-consuming dispute analysis, ultimately reducing the chargeback costs. When a customer initiates a chargeback, instead of immediately filing a dispute, the issuer sends a notification through the Chargebackhit system, requesting transaction details from the merchant. This early intervention allows merchants to provide supporting evidence or initiate a refund, notifying the issuing bank and effectively avoiding the chargeback.

To prevent chargebacks and stay compliant with Visa and Mastercard, consider the following approaches provided by Chargebackhit:

  • Glossary
    A tool that allows merchants to stop Visa chargebacks before they are initiated by the customer. Merchants integrated with OI (formerly referred to as Visa Merchant Purchase Inquiry - VMPI) can provide card issuers with the detailed company, customer, order, and product information in real-time.
    Order Insight
    and Glossary
    Consumer Clarity (formerly referred to as Ethoca Eliminator) is a system that allows the merchant to provide details of the transaction to the issuing bank to prevent unlawful chargebacks.
    Consumer Clarity

    When a customer initiates a chargeback or transaction clarification, the bank requests details from Visa, who in turn requests them from the merchant. Merchants can provide data automatically using Consumer Clarity and Order Insight, with Chargebackhit acting as a communication channel between the cardholder’s bank and the merchant. This automated communication can prevent potential chargebacks. Furthermore, Compelling Evidence 3.0 combined with Order Insight increases the likelihood of successfully preventing fraudulent disputes, reducing costs and efforts associated with addressing disputes.
  • Guide
    Resolve disputes efficiently with Chargebackhit automation.
    Resolve

    It integrates RDR for auto-resolve, CDRN and Ethoca with a refund on the merchant side. Integrating with Verifi ( Glossary
    RDR is a program from Visa that allows merchants to automatically process returns to resolve certain disputes.
    RDR
    and Glossary
    The CDRN is Verifi’s proprietary solution, this platform is one of several alert networks that intercept chargebacks on your behalf.
    CDRN
    ) and Ethoca (Mastercard and Issuers alerts) provides chargeback resolution services, preventing claims from escalating into disputes while staying within Guide
    Thresholds refer to the predefined levels of chargeback activity that trigger alerts, allowing merchants to take action to prevent chargebacks before they become a significant issue.
    thresholds
    , chargeback ratios, payment processing fees, dispute resolution costs, and program compliance fines.

Order Insight and Consumer Clarity are preemptive notification tools combined into Guide
Chargebackhit system prevents disputes and protects revenue by providing enriched transaction information to issuers and customers in real-time.
Prevent
to proactively deal with disputes. The data can later be compiled into Guide
Increase win rates and recover revenue with chargeback representment and compelling evidence.
Recover
to fight chargebacks.

Chargebackhit service is an API that provides alert notifications. Visa, Mastercard, or Issuer send a JSON request to the Chargebackhit API, which in turn sends an alert to the merchant.

For each product, the alert processing flow is approximately the same:

  1. Convert the alert into an internal format and store it in the database.
  2. Check for duplicates and exclusion rules.
  3. Generate a request for the merchant and send a notification.
  4. Handle the merchant's response and respond to the provider accordingly.

Alert types

Glossary
Chargeback notifications are messages that the merchant receives informing them that a chargeback has occurred or will soon occur.
Chargeback alerts
are delivered to the merchant before a claim is made, giving them a chance to avoid it. The alerts inform the merchant that a chargeback is pending but has not yet been filed. In this case, the merchant may take independent actions to avoid the chargeback, such as a voluntary refund, and pass this information to the issuer.

success
By bundling all the alerts on the market, we can assist merchants with one of the first stages of the dispute-resolution process to resolve the issue without investing significant time into analyzing your disputes while also reducing your chargeback costs.

Alerts are issued either by issuers or card schemes and originate from customers who have initiated a chargeback. Here is a simplified overview of the process for all types of alerts:

  1. Cardholder contacts the issuing bank to dispute a purchase.
  2. Issuer returns notifications to the providers directly or via card schemes.
  3. Providers notify Chargebackhit of the upcoming dispute.
  4. Chargebackhit sends a request to the merchant and notifies the merchant of the incoming chargeback. Then the merchant decides either to refund the customer, stop order fulfillment, update order details, or dispute the transaction, depending on the alert type received.
  5. Merchant takes the necessary actions, such as matching the alert to a database transaction or issuing a refund, and then communicates the action taken to Chargebackhit.
  6. Once the response is received by Chargebackhit, Chargebackhit responds to the issuer according to the alert type. Assuming the merchant wants to avoid a chargeback, they refund the purchase and stop order fulfillment.
  7. Issuer receives the information, and under certain conditions, can stop the chargeback process.
  8. Cardholder gets information or a response from the issuing bank indicating that the money will be returned shortly, or they receive additional real-time information about the transaction. Obtaining information can also help to stop the chargeback process.

Chargebackhit provides a unified API for all kinds of alerts. Currently, its products include:

Cardholder Dispute Resolution Network’s (CDRN) unique and patented, closed-loop process directly integrates with top issuers and provides unmatched service quality and accuracy for merchants and issuers to resolve disputed payments, dramatically minimizing chargebacks and cardholder dissatisfaction. CDRN receives immediate notifications from issuing banks about cardholder issues.

Verifi CDRN alerts lead to the freezing of the chargeback process for 72 hours.

Before a dispute can be registered, Visa will require issuing banks to make an Order Insight inquiry into the transaction. Order Insight sends the transaction data from the merchant as it is gathered in real-time. This data contains delivery confirmations, purchasing device IDs, and even customer support interactions that link a cardholder to the purchase. Order Insight prevents disputes and friendly fraud by aiding cardholder recognition.
Additional transaction data is displayed to cardholders in real-time on their online statement. Consumer Clarity helps issuers determine if a cardholder has made a purchase, both via contact center or mobile device in real-time (such as Order Insight).
When a fraudulent transaction is confirmed, issuers send a fraud alert called a TC40 statement. TC40 tracks stolen card numbers and other identifiers for fraudulent transactions. The VISA product also includes dispute notifications for already-issued chargebacks, which you can receive more quickly than from the acquirers.
Disputes that have not been declined due to Consumer Clarity requests are routed through the issuer’s network and global Mastercard (including Mastercard Collaboration) alert network before they become chargebacks. Merchants should check these alerts through their payment processor gateway. Refund alerts do not affect merchant accounts as negatively as chargebacks. Typically, merchants will refund, stop shipping, cancel subscriptions, etc.
If a dispute survives an Order Insight request, Visa has provided a pre-dispute phase where the transaction details are sent to the merchant for automated review. Here, the merchant specifies certain conditions, the fulfillment of which can result in an automatic refund via Visa Response Online (VROL). Rapid Dispute Resolution (RDR) provides an immediate refund to the cardholder.
The key value of Compelling evidence in Chargebackhit system is to help merchants prevent disputes by providing supporting evidence for disputed transactions that can potentially lead to a more favorable outcome.

Alert types are categorized as:

Type Definition
inquiry Chargebackhit sends merchants inquiry requests initiated by the issuing bank and returns additional merchant data to the Visa issuer when matching the available transaction data. If a transaction does not match, Chargebackhit sends default data.
init-refund Chargebackhit notifies the merchant that the transaction should be refunded.
resolved Chargebackhit notifies regarding the resolved dispute. The transaction is automatically credited to the cardholder and the chargeback is prevented.
prevented Chargebackhit sends a notification indicating the successful dispute prevention, originating from the inquiry .

Guide
Leverage post-authorization fraud and dispute notifications to lower payment risk.
Inform
types are categorized as:

Type Definition
fraud-notification This is a Visa notification of a confirmed fraud event by the cardholder. No refund should be processed. For best practices, we recommend suspending subsequent billings for the cardholder.
dispute-notification This one received for all Visa fraud and non-fraud disputes from a single course. For best practices, we recommend tracking dispute rates and improving link analysis, modeling, and dispute analytics.

Interaction

Type Products Actions
inquiry
  • Order Insight
    • Compelling evidence 3.0
  • Consumer Clarity
Alerts that require a response and transmission of additional data.
  • Matching
  • Response with the data
  • Timeout for prevent
prevented
  • Order Insight
    • Compelling evidence 3.0
  • Consumer Clarity
Successful prevention of disputes.
  • Matching and providing with response
init-refund
  • CDRN
  • Ethoca
Alerts that require a response and refund.
  • Matching
  • Refund the transaction or resolve with the cardholder
resolved
  • RDR
Post-factum notification about the pre-dispute.
  • Matching and providing with response
fraud-notification
  • Verifi Inform
Notifies about the confirmed fraud cases.
  • Matching and providing with response
dispute-notification
  • Verifi Inform
Notifies about disputes.
  • Guide
    Internal logic for quick matching of alert data by the system in real-time.
    Matching
    and providing with response

Responses

Responses summarize complex Chargebackhit API outcomes and responses, ensuring accurate transaction reconciliation.