Each transaction you process, whether it’s online or at POS, comes with the possibility of a chargeback. Chargebacks are merchant’s worst nightmare: they can eat into your profits, strain your relationship with processors, and irreversibly damage your reputation.
LexisNexis study shows that for every $100 you lose to fraud, you actually spend $300 in transaction fees, merchandise replacement, and redistribution.
If these mounting costs and operational setbacks are keeping you up at night, you need a chargeback management solution. Not just any solution, though. A solution that takes all that mind-numbing dispute paperwork off your plate, helps you win more cases and shows you exactly why those chargebacks are happening in the first place.
In this blog post, we’ll help you choose between chargeback management solutions so you can gain high-risk merchant Fraud protection you deserve.
What Are Chargeback Management Solutions?
Chargeback management software are dual-purpose tools:
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Prevention: Block disputes before they occur.
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Resolution: Fight illegitimate claims with evidence to recover revenue.
At their core, chargeback management solutions screen transactions before they occur and provide real-time alerts and automated processes to handle disputes that do arise. At FastoSafe, we use AI-driven fraud detection, 3D Secure, and seamless integrations with networks like Ethoca and Verifi.
How Chargeback Management Solutions Reduce Disputes
Advanced tools use machine learning to analyze 100+ data points per transaction (device fingerprints, IP geolocation, purchase history). For instance, a gambling platform might flag a $1,000 purchase from a new device in a high-risk region, prompting additional authentication.
Next, real-time alerts can help you resolve disputes before they turn into chargebacks. Partnerships with Ethoca and Verifi notify you the moment a customer disputes a charge so you can either approve the refund or challenge the dispute.
During this intervention, you also gather critical evidence, such as transaction data and communication records, that can be used later to support your case in dispute representation.
Finally, clear billing descriptors (for example, “YourCBDStoreOrder”) and post-purchase emails reduce “I didn’t buy this” claims.
How Chargeback Management Increases Revenue
Automated tools compile evidence (timestamps, delivery proof, customer interactions) to help you with chargeback recovery. For a $500 chargeback, that’s $325 recovered, plus avoided fines.
Also, lowering your chargeback ratio below 1% keeps your merchant account active. This is critical for high-risk industries, where alternatives like offshore processors charge exorbitant fees.
How to Choose the Best Chargeback Management Solution for Your Business
When evaluating chargeback management solutions, look for a tool that offers real-time transaction monitoring powered by AI. This way, you can spot transactions that seem off (based on purchase history, for example), without preventing legit customers from completing their purchase.
But don’t settle for generic solutions. Look for AI models trained on your sector’s risks, like synthetic identity fraud in travel or card testing in adult entertainment.
Then there’s dynamic authentication such as 3D Secure 2.0. Not only is this feature incredibly useful (it helps you challenge suspicious transactions with verification methods), it is also required under the PSD2’s Strong Customer Authentication (SCA) regulation.
Unlike its predecessor, 3D Secure 1.0, 3D Secure 2.0 offers a smoother checkout for legitimate customers while maintaining strong chargeback prevention against bad actors.
Finally, dedicated support that’s available 24/7 can help you resolve disputes and manage chargebacks. The right partner will join forces with you to implement best practices and maintain compliance with regulatory standards such as PSD2. At FastoSafe, we pride ourselves on our expert support and thorough guidance.
Stop Losing Money to Fraud
You now know that advanced AI screening, dynamic 3D Secure 2.0 authentication, and real-time alerts from trusted partners work together to reduce chargebacks and save you money. It’s not just about stopping fraud; it’s about keeping your merchant account healthy and ensuring every transaction is both smooth and secure.
With the right chargeback management solution in place, you can stop fraud in its tracks, recover lost revenue, and build lasting trust with your customers.
How to Get Started
To start saving money and protecting your merchant account from chargebacks, simply fill out our contact form.
One of our experts will reach out to schedule a free consultation, assess your current chargeback challenges, and guide you through a seamless integration process.
