Subscription models inherently carry higher chargeback risks.
Customers often forget about recurring charges, fail to cancel trials in time, or dispute transactions they later regret, a trend known as “friendly fraud.”
High-risk sectors like adult entertainment (for example, Escort services, Adult websites, and OnlyFans creators) face additional challenges, as customers may dispute charges due to social stigma or buyer’s remorse. Worse, fraudsters exploit recurring billing by using stolen cards to fund multiple subscriptions before victims notice.
The best chargeback management tools protect your revenue as well as relationship with payment processors.
As Dennis, Fasto’s CEO puts it: “Many subscription businesses underestimate how much chargebacks affect their approval rates. A strong chargeback management tool doesn’t just prevent disputes, it also helps merchants maintain stable payment processing relationships.”
The Ripple Effect on Low-Risk and High-Risk Merchants
Excessive chargebacks trigger penalties from payment processors, including higher fees, rolling reserves, or outright account closures.
For high-risk businesses, finding a payment processor is already challenging; a single chargeback rate above 1% can sever those hard-won partnerships.
Even low-risk merchants, like SaaS platforms, face revenue loss and operational strain as they manually contest disputes.
How to Choose the Best Chargeback Management Tool
Essential Features: Alerts, Automation, and Resolution
Modern tools go beyond basic dispute handling. Chargeback alerts, such as those offered by Ethoca and Verifi, notify merchants of disputes before they’re formalized, allowing refunds to bypass the chargeback process.
Rapid Dispute Resolution (RDR) automatically submits evidence to issuers, recovering revenue without manual intervention.
For high-risk subscription businesses, integration with recurring billing platforms like Recurly or Chargebee is critical to align dispute data with customer cycles.
Pricing Models: Balancing Cost and Value
Most chargeback tools charge per dispute resolved or a monthly fee.
For example, Chargebacks911 offers plans starting at $99 per month for small businesses, while enterprise solutions like Kount cost upwards of $1,000 per month for advanced features.
High-risk merchants should prioritize tools with flat-rate pricing like FastoSafe to avoid unpredictable fees during dispute spikes.
Top Chargeback Management Tools on the Market
FastoSafe
At FastoSafe, we deliver specialized protection for high-risk merchants through our AI-powered platform. Our system analyzes hundreds of data points including device fingerprints, geolocation, and purchase history to identify fraud in real time.
Our Dynamic 3D Secure 2.0 implementation only challenges suspicious transactions. A first-time customer purchasing an expensive travel package from a masked IP faces biometric verification, while repeat buyers using trusted devices checkout without friction.
This selective approach reduces cart abandonment by 30% compared to standard 3DS solutions.
We integrate with Ethoca and Verifi networks for real-time chargeback alerts. When customers initiate disputes, merchants receive immediate notifications to issue refunds or submit evidence before formal chargebacks occur. One of our CBD merchants reduced disputes by 70% within three months using this feature.
For regulated industries, we automate compliance requirements like age verification for adult content, gaming operations, and cannabis sales, ensuring adherence to regional regulations.
A CBD merchant using our solution cut chargebacks from 8% to 0.9% in 90 days, saving their merchant account.
Sift
Sift focuses on behavioral analytics to detect fraud patterns. Its machine learning models analyze user behavior across devices, locations, and transaction histories to identify anomalies. For instance, if a customer suddenly switches from buying small-value gift cards to luxury bookings, Sift will flag the transaction for review.
Sift also specializes in preventing account takeovers. It monitors login attempts for suspicious activity, such as rapid password resets or logins from unfamiliar devices, and blocks unauthorized access attempts.
Once fraudsters gain access to accounts, they can make purchases using stored payment methods, change shipping addresses, or steal loyalty points and rewards.
Durango
Durango Merchant Services specializes in providing payment processing solutions tailored for high-risk industries, including adult entertainment, travel, and cryptocurrency sectors.
They offer offshore merchant accounts that facilitate international transactions with multi-currency processing capabilities, which can be advantageous for businesses operating globally.
To address the elevated risk of fraud and chargebacks associated with these industries, Durango implements fraud prevention measures such as IP blocking and velocity checks.
Velocity checks monitor the frequency of transactions from the same device within a set timeframe, helping to identify and mitigate potential fraudulent activities.
For instance, a travel agency could configure the system to limit customers to a certain number of bookings per hour or block transactions originating from regions with high fraud rates.
Ready to Give FastoSafe a Shot?
Powerful fraud prevention tools are now at your fingertips. Our comprehensive solution combines advanced AI screening, dynamic 3D Secure 2.0 authentication, and real-time alerts from trusted partners to significantly reduce chargebacks and protect your bottom line.
This integrated approach not only stops fraud but also maintains the health of your merchant account while ensuring smooth, secure transactions.
Implement our chargeback management solution to effectively combat fraud, recover revenue that would otherwise be lost, and build enduring customer trust. Get your quote.
