Chargeback alerts are an amazing tool to reduce your dispute rate and incoming chargebacks.
In this article, you'll find more about how to maximize and predict the chargebacks which can be intercepted by alerts.
#1 Expectations
Chargeback alert coverage is never going to be 100% - no matter who tells you it is.
Chargeback alert coverage relies on a few factors:
The card brand of the customer
Visa and Mastercard have the best coverage, whereas AMEX and Discover have little to no coverage
Here is the healthy and normal coverage by card brand, assuming you use all chargeback alert programs and mainly sell in the United States:
Visa: >95% coverage if using a traditional processor, 80-90% coverage if using Stripe/Shopify Payments.
Mastercard: 60-80% coverage
AMEX: 0% coverage if using Stripe/Shopify Payments, 15-25% coverage if using a traditional processor.
Discover: 0% coverage if using Stripe/Shopify Payments, 15-25% coverage if using a traditional processor.
The location / bank of the customer
The customer's bank needs to opt-in to chargeback alerts in order for them to work. Luckily, Visa and Mastercard have enrolled the majority of the major banks in chargeback alerts. However, there is still many banks not enrolled in chargeback alerts. There are a larger amount of banks not enrolled in chargeback alerts outside the United States, If you sell to customers oustide the United States, your coverage will be lower as a result.
The chargeback alert programs you have enrolled in
For maximum coverage, we recommend enrolling in the 3 main types of chargeback alerts: Ethoca, RDR, and CDRN. We also recommend utilizing Disputifier refund retrieval functionality, and our PayPal alerts functionality. This will reduce incoming chargebacks as much as possible.
#2 An important note
With RDR alerts, they may still show up as a chargeback in your processor. Some processors will notate this this is RDR (such as Stripe) whereas others will remove the ability to respond to them (such as Shopify Payments), whereas others won't have any indication whatsoever that this is an RDR alert and it just looks like a normal chargeback. That said, these never count against your Visa dispute ratio, and typically do not count against your dispute ratio tracked internally at your processor.
A Shopify Payments RDR-covered dispute. You can identify this by the terminology "The customer's bank already decided the case" which only shows on RDR alerts.
A Stripe RDR-covered dispute. Stripe specifically calls out that it is an RDR-covered dispute.
#3 How to enhance coverage by card brand
Visa: Add Visa ARN numbers in your dashboard under "configure" (RDR) if your Visa coverage is <90%. Ideally, provide Visa chargeback ARNs from Visa chargebacks not covered by RDR, which you may have to contact your processor's support team to obtain.
Mastercard: Add all your descriptors and descriptor variations including any past descriptors you've used in your dashboard under "configure" (Ethoca). If you ever change your descriptor, be sure to add your new descriptor in your dashboard. Furthermore, you may be enrolled as "exact match" descriptor matching. You can contact our support team to change this to "starts with" descriptor matching.
Here is the difference between "starts with" and "exact match" descriptor matching.
Order #12345 - Customer sees "YOUR STORE" on their banking app.
Order #12346 - Customer sees "YOUR STORE NEW YORK NY 8006483018" on their banking app.
With "starts with" descriptor matching, both of these chargebacks would be alerted. With "exact match" descriptor matching, only order #12345 would be alerted
Note that "starts with" descriptor matching has the potential to pick up alerts on unrelated stores so it's not always used by default, especially for Shopify Payments. We are happy to change this at any time, so please contact our support team to confirm and/or change your descriptor matching method.
AMEX: Coverage will always be extremely minimal on Stripe and Shopify Payments, but we recommend ensuring you enroll in both Ethoca and CDRN to improve it. This is because AMEX requires an "SE Number" to enroll in alerts. Typically, you have to contact your processor to obtain this number. Unfortunately, Shopify Payments and Stripe do not provide this number when asked. This is why using a traditional processor will ensure that your AMEX coverage is better. If you obtain your SE number, you can contact our support team to provide it. You will also need to provide your DBA, legal business name, and legal business address.
Your AMEX coverage can be enhanced further if you are an enterprise and have access to an OptBlue portal. Here, you can enroll in additional alerts, manage retrievals better, etc. If you have an OptBlue portal, you can invite us to the account for enhanced chargeback prevention.
Discover: We recommend ensuring you enable the "refund retrievals" setting and ensure we have access to your processor. Discover sends many chargebacks first as a retrieval, so many of these can be avoided. Alert coverage will always be extremely minimal on Stripe and Shopify Payments. This is because Discover requires an "SE Number" to enroll in alerts. Typically, you have to contact your processor to obtain this number. Unfortunately, Shopify Payments and Stripe do not provide this number when asked. This is why using a traditional processor will ensure that your Discover coverage is better. If you obtain your SE number, you can contact our support team to provide it. You will also need to provide your DBA, legal business name, and legal business address.
Hopefully this article was helpful in identifying what the typical alert coverage is by card brand, as well as how to improve your alert coverage when it's falling below average.
Please reach out to our team if you have any questions or concerns!