Ethoca Consumer ClarityStopping Mastercard Disputes Before They Start

The Merchant’s Step-by-Step Guide to Ethoca Consumer Clarity

The steep rise in the number of chargebacks issued in recent years has had merchants scrambling to find a solution. As it turns out, they’re not the only ones looking to prevent chargebacks: credit card networks have also introduced new tools specifically designed to decrease customer disputes.

Ethoca Consumer Clarity is one such asset. Ethoca (a Mastercard company) designed the tool to help resolve cardholder inquiries before those inquiries advanced to chargebacks. It’s a powerful tool for keeping chargebacks under control, one that benefits both merchants and issuers.

That said, Consumer Clarity’s effectiveness can be limited by the types of chargebacks you receive. In this post, we look at how Consumer Clarity works, and how merchants can leverage the solution to maximize its use.

What is Consumer Clarity?

Consumer Clarity

[noun]/kən • so͞o • mər • kler • ə • dē/

Consumer Clarity is a dispute resolution platform created by Ethoca, delivering real-time data sharing between participating merchants and cardholders. This two-way communication can help resolve transaction inquiries that would otherwise become chargebacks.

Consumer Clarity is a technology solution created by Ethoca, a company owned by Mastercard. Formerly known as Eliminator, this tool enables collaboration between merchants enrolled in the program and cardholders inquiring about a charge on their statement.

Consumer Clarity is similar to a Visa product called Order Insight. It works with Mastercard transactions, whereas Order Insight is applied to Visa purchases. The goal of both, though, is to resolve a cardholder’s issue without the need for a formal chargeback.

How Does Consumer Clarity Benefit Merchants?

Consumer Clarity unites merchants and financial institutions in the battle against unnecessary chargebacks. It offers a number of benefits to you as a merchant:

Revenue Protection

Sharing data with cardholders can help them better remember transactions. If Consumer Clarity helps them identify purchases on their statement, and thus stops them from filing a dispute, you retain sales revenue that might otherwise be lost.

Faster Resolutions

From initial dispute through representment and arbitration, a single chargeback can take weeks, or even months to finally resolve. With Consumer Clarity, you can resolve cases before a chargeback is filed, often in just minutes.

Lower Costs

By preventing chargebacks — especially those from friendly fraud — Consumer Clarity helps you keep your Mastercard chargeback rate low, which will reduce your operating costs and ensure you stay below the chargeback threshold.

Fewer Friendly Fraud Disputes

Transaction insights provided through Consumer Clarity may help issuers identify — and block — a bogus chargeback by recalling evidence that contradicts the buyer’s claim.

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While Consumer Clarity is primarily a tool for merchants, banks can also benefit. Financial institutions will see fewer disputes progress to the chargeback stage, preventing write-offs and reducing confusion while staff have to spend less time processing disputes.

How Does Consumer Clarity Work?

Consumer Clarity helps answer legitimate customer questions, and in many cases helps identify and prove the validity of a charge.

It provides details about a transaction that would not be visible on a cardholder’s statement. More importantly, it works in real time, providing up-to-the-minute insights about a purchase. If the customer’s issue is successfully resolved, the dispute is stopped before it even gets filed.

Consumer Clarity works best when integrated directly into your CRM or order management system. This allows cardholders and banks to recall relevant transaction details instantly. If a customer contacts their bank about a transaction, the issuer can consult Consumer Clarity for transaction details, though.

If the details resolve the cardholder’s inquiry, the claim is done. There’s no need for your direct involvement at all.

Of course, more complex inquiries can come up. For these, you can provide real-time responses. If the cardholder reviews the additional information, but is still not satisfied, you have the option of refunding the purchase before a chargeback is filed.

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It’s also important to note that when sharing information with Mastercard, you can choose precisely what and how much to send through Consumer Clarity. Any information you share is completely secured and will never be replicated. Of course, you’ll ideally want to share as many details as possible.

Sharing Information With Consumer Clarity

So what kind of data is being shared using Consumer Clarity?

Anything the issuer can use to help a cardholder recall a valid transaction could potentially spare you a chargeback. For example, the information you might share through Ethoca Consumer Clarity could include:

You can even include things like shipping and tracking information or proof of delivery. Remember, you’re trying to prevent a chargeback. The more information you can provide, the better.

What Should I Do After a Consumer Clarity Inquiry?

Regardless of the outcome, responding to an inquiry is only half the job. Once you’re aware of an issue, you’ll want to do everything you can to prevent similar problems in the future. For example, if you’re submitting a refund in response to the customer inquiry, you should:

• Refund the transaction immediately and make note of the refund in your CRM.
• Cancel order fulfillment (if possible).
• Cancel any future rebills if part of a recurring billing program.
• If you suspect friendly fraud, flag the account and consider blacklisting the buyer.

If you’re submitting transaction information to try and resolve the buyer’s questions, you should take the following steps:

• Make note of the resolution in your CRM.
• Follow-up on any pending action item to ensure the issue is resolved and any promised action was completed.
• Prepare a response if you believe that the cardholder claim is illegitimate but the transaction details were deemed insufficient to reverse the dispute.

It’s also important to keep track of data generated by Consumer Clarity responses. Compiling this information over time can provide a better understanding of your general chargeback situation. You can analyze how well your inquiry responses perform and apply those insights to see a long-term reduction in disputes.

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Are There Limits to What Consumer Clarity Can Do?

The type of chargebacks Consumer Clarity can help you avoid generally result from errors and oversights. These may be on your part, or on your customer’s.

Consumer Clarity is powerful, but the program does have its limitations. The most obvious one is that it only works with Mastercard transactions.

Consumer Clarity won’t be optimally effective for chargebacks resulting from criminal fraud or deliberate friendly fraud. It can, however, definitely help you prevent many chargebacks that result from first-party misuse (i.e. friendly fraud).

How Do I Get Started?

You need connectivity with Mastercard systems to implement this solution and enjoy the benefits of Ethoca Consumer Clarity. After integration, you can immediately start reaping the benefits of real-time chargeback reduction.

The fastest, easiest, and most effective solution is to partner with an authorized facilitator like Chargebacks911®. We can integrate with the platform on your behalf; all you need to provide is basic merchant account details, while we handle all the complex details for you. Our clients see:

• More revenue recovered
• Reduced costs
• Increased net income
• Better resource allocation
• Long-term chargeback reduction

Want the support and saving offered by a Consumer Clarity facilitator? Or want to see how much you can save with end-to-end chargeback management? Request your free dispute analysis below and start saving today.