“Chargeback” is the word merchants dread most.  Not only do chargebacks mean the loss of an expected sale, but it can also mean heavy fines, blacklisting and in cases of excessive chargebacks, closing of the merchant account.  As profitable as a merchant may think he is, he is often in for a surprise when he finds much of that alleged business was actually fraud waiting to result in chargebacks. 

For these reasons, merchants use online payment solutions that lead them through the standard fraud checks such as card verification process and developing country blockage, among others.  However, even with these processors, chargebacks can sometimes still occur.

Some payment processors have systems for advanced chargeback prevention that is integrated into the merchant’s own admin back-office.   Such a system has the ability to alert the merchant when a chargeback has been made, or better yet, when a “retrieval” has been made. A retrieval is the critical stage where an end-user simply inquires about the charge before he makes an official chargeback.  Once this happens, the bank notifies the payment processor and they are able to alert the merchant instantly by posting a notification in his back-office.  This feature is important because it gives the merchant enough time to settle the issue directly with the end-user, before the official chargeback  occurs.

In the event that a chargeback should nonetheless occur, they too will be immediately posted in the merchant’s back-office, so that the merchant can immediately block the problematic user and terminate any pending activity with him. 

This type of feature cuts down chargebacks, keeps merchants within permitted thresholds set by the international credit card companies, and most of all, guarantees no unwanted surprises.