There is certainly no business without chargebacks. But there are lots of ways to eliminate them. Surely, keeping a website in order and customer service helpful does work. But this is not enough. This Maxpay article is about Ethoca Alerts services. We will explain what a chargeback is, how it works, how it damages a business, and why a customer claims it. And after that, we will talk about the alert services and how they become a merchant’s remedy
What is a chargeback, and why is it dangerous for your business?
A chargeback is when a customer demands a money return via their bank but not on the merchant’s website. This money return can happen if the purchased product or service does not meet claimed requirements.
- A customer receives an item or a service and becomes unsatisfied with it;
- They contact their bank card issuer to claim a chargeback;
- A customer makes proof of the issue, normally by taking photos and writing a description of the problem;
- The dispute is sent to an issuer;
- An issuer assigns a reason code for a particular case;
- The complaint is being investigated by an issuer while money is being frozen;
- The case is sent to an acquiring bank of a merchant and is being investigated there as well;
- A merchant receives the dispute information and investigates as well, having an option to provide evidence for their protection;
- A bank issuer of the client receives information and evidence from both acquiring bank and merchant;
- An issuer is making a decision: in favor of a merchant or in favor of a customer;
|In favor of a merchant||In favor of a customer|
|For a merchant||A merchant keeps money spent by a customer without any consequences||A merchant has to return the money, pay a chargeback fee to its acquiring bank, lose an item|
|For a customer||A customer does not get a monetary return but keeps a purchased item||A customer gets money back, and also keeps a purchased item|
Why is a refund a better solution?
Basically, for a customer, a chargeback is a return of funds because the product or services did not meet certain expectations; but for a seller, a chargeback has a totally different outcome than a classical refund. As we have mentioned before, if a dispute is solved in favor of a customer, a merchant loses a lot.
That is why one of the best solutions is to make it very simple for a client to ask for a refund. A refund is a simple money return, so for a client, an outcome would be the very same inboth cases. While a merchant, for instance, would not have to pay an extra fee to its bank, could receive an item back, and would keep its financial reputation on a better level.
The list of main chargeback reasons
- Personal mistakes of a client can result in the wrong item purchasing or inserting the not valid delivery address;
- Website issues can cause some extra purchases or wrong products sales;
- Delivery issues can mean a recipient of a wrong item or parcel not coming at all;
- Quality issues refer to a product problem regarding the way it functions and the way it looks;
- A friendly fraud case is when a customer fakes a chargeback reason in order to get money back;
Ethoca Alerts: chargeback protection
To reduce chargebacks, a merchant can use Ethica Alerts services. Ethoca Alerts services are dedicated to chargeback elimination and offer a merchant an opportunity to turn a chargeback into a simple refund by funding a common solution with an unsatisfied customer directly. Currently, MasterCard is an Ethoca Alerts parent company.
How does the Ethoca Alerts service work?
Here’s how it goes: when a customer places a dispute, a bank issuer does not process it but sends a notification to Ethoca. Ethoca Alerts then notifies a merchant sharing customer’s data. A merchant then has 24 hours to contact a particular person, find out the nature of the problem, and offer a peaceful solution. If a merchant does nothing, the chargeback flow goes normally.
How to set up Ethoca Alerts for an online business
To protect your online merchant account with Ethoca Alerts, we recommend partnering with Maxpay. Maxpay is a payment gateway service provider that offers merchants top solutions for their businesses in the USA, UK, and Europe, including Austria.
With Maxpay, a merchant can open an online account, set up a payment system on a website, and obtain Ethoca Alerts and fraud prevention for better business protection. Besides that, Maxpay assigns a personal manager to each client, so there will be customer service that really knows your business. To find out how much services cost and how fast we can set them up, please contact us.
What is Ethoca chargeback?
Ethoca Alerts is a service that provides chargeback protection. It freezes the dispute, allowing a merchant to contact a particular customer and offer a peaceful solution. To set up Ethoca Alerts on your website, contact Maxpay.
How does a merchant get notified of a chargeback?
A merchant gets notification because of the Ethoca Alerts. The service receives information about the dispute from a customer’s bank. Then, it redirects this data to a merchant. Meanwhile, a dispute is paused for the next 24 hours. During this time, a merchant can contact a customer and offer a refund, return, or any other pleasant outcome.
How do you manage chargebacks?
The most efficient way is to set up Ethoca Alerts. This service allows a merchant to eliminate chargebacks and avoid extra fees, bad banking reputation, financial damage, and fraud. To set up Ethoca Alerts on your website, contact Maxpay.
How do you protect merchants from chargebacks?
You should make a refund option easy to find on your website, this could reduce the chargeback amount. But the real remedy is Ethoca Alerts. It can freeze a dispute for 24 hours, letting a merchant contact an unsatisfied customer and find a peaceful solution together.