Chargeback prevention solutions for online businesses

Does your business need chargeback protection?

There are dozens of ways to reduce the risk of chargebacks. Start is by addressing the most effective, low-cost updates.

Here’s what we suggest.

1. Clear up any confusion.

Quite often, customers dispute legitimate transactions because they don’t remember making the purchase.

To address this, focus on writing clear, easy to understand billing descriptors (the short explanations that appear on billing statements).

2. Make it easy to contact you.

If customers have issues with their purchases, you want them to contact you instead of the bank. So share your customer service information in as many places as possible — in the footer on your website, on a “contact us” page, and in the order confirmation email.

3. Write clear product descriptions.

Write clear descriptions for the goods and services you sell. Include as many details as possible.

Also, clearly disclose billing details. If the customer signs up for a free trial, explain when their debit or credit card will be charged.

4. Write customer friendly return and cancellation policies.

The more customer friendly your policies, the fewer chargebacks you’ll receive. Things like free return shipping and extended time limits can help.

Once you have your policies perfected, make them easy to find on your website.

5. Issue refunds quickly.

Issue qualified refunds promptly. The sooner the customer gets their money, the less likely they are to seek a chargeback. Let the customer know when the refund was initiated and when to expect the money in their account.

6. Communicate.

Effective communication is essential to any chargeback prevention strategy. The more your customers know and trust you, the better off you’ll be.

Consider these touch points:

• Confirming an order
• Confirming a refund
• Notifying the customer of upcoming charges
• Sharing special deals and offers
• Warning for anticipated service interruptions or outages

7. Prevent fraud.

Fraud chargebacks are difficult to fight but fairly easy to prevent. The market is saturated with fraud detection vendors to help you avoid unauthorized transactions. If you can prevent unauthorized transactions, you can avoid the resulting chargebacks.

8. Create reports.

Data is often an overlooked ingredient in a successful chargeback prevention strategy.

Data can help you determine why disputes are happening so you can solve problems at their source.

Try to get data as close to real time as possible. The sooner you know about issues, the better off you’ll be.

9. Use the right tools.

There are several solutions that can help you resolve customer disputes before they progress to chargebacks. Here is a comprehensive list of solutions available for card not present businesses:

• Order Insight
• Consumer Clarity
• Ethoca prevention alerts
• Verifi CDRN
• Rapid Dispute Resolution (RDR)
• Mastercard Collaboration

If you’d like to learn more about these chargeback prevention solutions, let us know.

10. Consult with experts.

Chargeback management is a dynamic process. Fortunately, there are several people who are able to help you along the way.

• Read blog articles and attend webinars. Absorb as much as you can. Start with the AltoPay blog!
• Network at trade shows and events. Industry conferences are crawling with fellow merchants. Schedule meetings, bounce ideas off each other, and see what other people have found to be successful.
• Reach out to your payment processor. Your payment processor wants you to stay processing as long as possible, so they have an interest in helping you be successful.

There are various fraud detection tools and chargeback prevention solutions on the market today. You can use multiple solutions throughout the transaction lifecycle to create the best protection possible.

Solutions are primarily used at two points in the payment processing lifecycle:

• Pre-authorization – before the transaction is approved and finalized
• Post-authorization – after the transaction has been approved and finalized

It’s important to balance solutions at both stages. If you get too many on one side or the other, you could disrupt your bottom line.

For example, if your pre-authorization strategy is too aggressive, you’ll turn away good sales. If you use too many solutions post-authorization, you could sacrifice revenue.

Here are some pre-authorization solutions to reduce the risk of fraud.

• Card security code
• Address Verification Service
• 3D Secure

You can also bulk up your chargeback management strategy with post-authorization solutions.

• Order Insight
• Prevention alerts
• Rapid Dispute Resolution

Want help creating a chargeback prevention strategy that balances risk with reward? Contact our team today!

Since the invention of the internet, there has been a risk of chargebacks. For decades, we’ve watched threats come and go with new challenges emerging every year. And 2025 is no exception.

What is the biggest threat that merchants face this year?

VAMP.

Visa is changing how fraud and chargebacks are managed with the Visa Acquirer Monitoring Program. With lower ratio thresholds and higher fees, 2025 is shaping up to be one of the most challenging years we’ve faced in a while.

If you’d like help navigating VAMP, let us know. The AltoPay team consists of several qualified chargeback management and prevention experts. We have what you need to maintain stable, reliable payment processing during the VAMP transition and beyond.

Why bother with chargeback prevention? Can’t you just accept chargebacks as a cost of doing business?

Probably not.

And there are a couple of reasons why.

The customer experience.

If a cardholder files a chargeback, it probably means the experience wasn’t what the customer expected. And dissatisfied customers tend to talk. You don’t want a slew of negative online reviews and bad word of mouth.

Your authorization rates.

The more chargebacks you receive, the more tarnished your reputation. If issuing banks perceive you as risky, they will probably approve fewer transactions with your business.

Your chargeback ratio.

It’s important to maintain a good customer experience and a high authorization rate. But the biggest reason to reduce chargebacks is your chargeback ratio.

Each month, the bank calculates your chargeback-to-transaction ratio — the percent of transactions that turn into chargebacks.

Acquiring banks and card brands set thresholds for chargeback ratios. If you breach those thresholds, you could be penalized — up to and including account closure.

Try to keep your chargeback ratio below 1%.