Chargeback Prevention ToolsFinding the Most Effective Solutions to Stop Disputes

January 25, 2024 | 13 min read

This image was created by artificial intelligence using the following prompts:

Tools made out of money and credit cards, in the style of red and teal.

Chargeback Prevention Tools

In a Nutshell

Let’s say you’re trying to build a chair. Having the best tool box in the world won’t be much help if you don’t know a miter saw from an allen wrench. It’s the same with chargeback prevention tools. There are many out there, but how do you know which ones you need, and how to deploy them effectively? This post looks at different types of chargebacks and how to find the best prevention tools for your specific needs.

The Best Chargeback Prevention Tools for Merchants

You want to prevent chargebacks from damaging your business and your reputation. But, with so many service providers pitching the latest chargeback prevention technology, it's hard to know which solution is right for you.

What will it take to stop chargebacks from eating your revenue? The sheer number of chargeback prevention tools on the market is overwhelming, and every provider claims the latest technology and best results. Simply identifying the right solution for you can be a monumental challenge.

In this post, we’ll break down your options for chargeback prevention tools. We’ll distinguish between pre-transaction and post-transaction technologies, and help you understand what each product brings to the table. Finally, we’ll discuss the best ways to incorporate chargeback tools into a comprehensive prevention strategy.

How Do Chargeback Prevention Tools Work?

Chargeback prevention tools work by targeting a specific threat source, like unauthorized card use, buyer’s remorse, or policy missteps. This gets complicated, though, because there are hundreds of potential triggers that can lead to a chargeback. Each one demands a different response.

The key is developing an inclusive chargeback management policy that leverages different tools for different threats. Fixing individual trouble spots is important. But, it should be considered one part of an effective prevention plan; not the plan itself.

Any single tool or product may prevent a handful of chargebacks, but each tool you implement can provide another layer of protection. Employing a multilayered approach to dispute prevention will give you the best results. Adding too many layers or the wrong chargeback prevention tools, however, can actually work against you.

All chargeback prevention tools fall into one of three primary categories:



Tools designed to identify potential chargeback triggers and resolve problems before the transaction occurs.



Tools aimed at intercepting and resolving disputes that are already in-progress, but which haven’t yet advanced to the chargeback phase.

Source Detection

Source Detection

Tools that help identify the reasons chargebacks happen and provide guidance to resolve issues before they become new disputes.

In the following sections, we’ll break these categories down into more detail, and outline some basic chargeback prevention tools we recommend as part of your strategy.

Post-Transaction Chargeback Prevention Tools

Post-transaction chargeback prevention tools have the most immediate, predictable impact. But, they’re a stop-gap solution that will help while a more long-term strategy is implemented.

They can help protect you against disputes when all else fails. They don’t address any of the underlying issues that cause chargebacks. Still, they’re a good first step that merchants can easily implement when trying to get chargeback issuances under control.

There are two different categories of post-transaction chargeback tools: refund-based (chargeback alerts) and data-based (network inquiries).

Refund-Based Prevention

Chargeback alerts allow merchants to refund disputed transactions before a chargeback is officially filed. They’re a great tool to quickly lower your chargeback rate without impacting customer friction. Here’s how it works:

Let’s say one of your customers calls their issuing bank to dispute a charge. If the issuer is part of the alert network, you'll be notified of the pending dispute before a chargeback is filed. You can then avoid that chargeback by issuing a refund instead.

Chargeback alerts are very effective at stopping chargebacks caused by friendly fraud. They can commonly lower issuances by as much as 20% in a matter of days. Refunding the customer is not ideal, of course. But, it’s better than a chargeback. 

Start preventing up to 40% of chargebacks within 48 hours.REQUEST A DEMO

There are two primary alert networks: Ethoca (owned by Mastercard) and Verifi ( owned by Visa):

Verifi CDRN

The Cardholder Dispute Resolution Network (CDRN) from Verifi offers real-time notifications of pending chargebacks conducted on the Visa network. It allows you to stop losses by preventing chargebacks and preventing the fulfillment of unshipped goods and services.

Learn more about CDRN

Ethoca Alerts

Like the CDRN, Ethoca Alerts notify you before a bank proceeds with a Mastercard chargeback, allowing you to resolve the dispute via refund. The Ethoca Alerts network incorporates more than 5,100 banks, helping prevent millions of chargebacks every year.

Learn more about Ethoca Alerts

Did You Know?

The Chargebacks911® Alerts Management Platform allows merchants access to both CDRN notifications and Ethoca Alerts. This delivers the most comprehensive coverage available, all accessed through a single dashboard.

Data-Based Prevention

Like chargeback alerts, network inquiry tools allow you to intercept disputes before a chargeback is filed. There’s an important difference, though: with inquiries, you may be able to resolve the dispute without issuing a refund.  

Before data-based prevention was a thing, issuers had few ways to resolve a dispute. If one of their customers called asking about an unrecognized charge, it would typically result in a chargeback. 

Now, issuers participating in a network inquiry program are able to electronically request additional information about the transaction in real time. In many instances, this can automatically remedy potential friendly fraud claims before they become chargebacks.

These data-based prevention tools are widely available to merchants via the card networks. Both Visa and Mastercard offer proprietary inquiry products through their counterparts:

Verifi Order Insight

Order Insight from Verifi works as a plugin for the Visa Resolve Online platform. The company describes this tool as “an end-to-end chargeback solution that empowers issuer personnel with merchant CRM and order details in real-time, so that all parties can better recognize, remember, and validate the sale.”

Learn more about Order Insight

Ethoca Consumer Clarity

Ethoca Consumer Clarity operates in a manner similar to Verifi Order Insight, but applied to Mastercard transactions. It provides purchase information to cardholders' bank staff, including merchant’s name, purchase location details, and itemized digital receipts.

Learn more about Consumer Clarity

Rapid Dispute Resolution (RDR) and Collaboration are two other offerings that enable merchants to set parameters for automating the chargeback prevention process:

Rapid Dispute Resolution

RDR from Verifi  allows you to create rules and set parameters for automation under certain conditions. For example, you may choose to automatically accept all disputes under a certain dollar amount. This way, you can prevent a chargeback for these transactions by addressing the dispute before it progresses to the next stage.

Learn more about Rapid Dispute Resolution

Mastercom Collaboration

Collaboration will work like an early warning system for chargebacks, notifying you that a cardholder has disputed a charge. This gives you time to review the claim and see if you can resolve it directly. It is similar to RDR in this regard, but is specific to the Mastercard network (rather than Visa).

Learn more about Mastercom Collaboration


Don’t forget about Compelling Evidence 3.0! This is an updated set of guidelines and evidence requirements for disputes. The new ruleset standardizes and automates claims based on the customer’s purchase history, helping prevent bogus disputes marked with Visa reason code 10.4 (Other Fraud – Card-Absent Environment).

Learn more about Compelling Evidence 3.0

Pre-Transaction Chargeback Prevention Tools

Pre-transaction chargeback tools let you identify and prevent fraudulent transactions prior to checkout. Since these charges will always result in a dispute, detecting them before the order is processed should be filed under “best practices.”

As above, there are two primary categories of pre-transaction chargeback tools available: fraud screening and fraud scoring.

Fraud Screening

There are numerous free or low cost tools you can deploy to verify buyers’ identities. Many of these are legacy tools that have been around for years. Newer technologies are also being introduced on a regular basis, though. The newer tools tend to be more effective at preventing fraud since criminals are less able to circumvent them.

Fraud screening tools include:

  • Address Verification Service
    Address Verification Service (AVS) reduces fraud risk by automatically checking the billing address in the transaction against the address registered with the issuing bank. If they are not a match, AVS flags the transaction as possible fraud.
  • Card Security Codes
    Card Verification Value (CVV) security codes help ensure shoppers physically possess the card being used. Printed right on the card, CVVs cannot legally be stored by merchants or processors, and must be re-entered for every purchase.
  • 3-D Secure 2.0
    Implementing 3-D Secure 2.0 (or 3DS2) provides yet another level of fraud authentication by asking customers to enter a predetermined security code. The tool works like an online PIN code. 3DS stops the transaction from being complete if the valid code is not entered.
  • Fraud Blacklists
    Blacklists are designed to ban known or probable fraudsters, blocking repeat offenders. Lists can be based on something specific, like an IP address, or something generic, such as refusing all sales from specific geographic locations.

Learn more about fraud screening

Is fraud really causing your chargebacks? We can help you find out.REQUEST A DEMO

Fraud Scoring

Fraud scoring segments transactions based on the probability of fraud. Machine learning and artificial intelligence are used to compare the transaction details against an extensive variety of indicators.

A numerical score is calculated based on this analysis, rating the potential fraud level as low, medium, high, or very high risk. The higher the fraud score, the greater the risk of fraud the order represents.

Providing a standardized score helps the merchant quickly and confidently decide whether to accept the order, pull it for manual review, or reject the purchase altogether. The good news is that many service providers offer fraud scoring and screening as an all-inclusive risk management platform to let you offload this process entirely.

Learn more about fraud scoring

Chargeback Source Detection Tools

Understanding why chargebacks are happening is one of the most underappreciated components of chargeback prevention. If you aren't sure why your customers file chargebacks, you're likely to implement the wrong tool to address the problem. Furthermore, the chargeback tools you do implement may be "Band-Aids" that fail to address the root causes behind the disputes.

Chargebacks911 has invested heavily in dispute resolution tools that provide genuine chargeback source detection. We empower our clients to prevent chargebacks by detecting and addressing underlying issues directly. These proprietary tools allow our customers to prevent more disputes and retain more revenue than they can on their own, or even with other service providers:

Policy & Procedure Reviews

Merchant missteps like unclear policies, processing shortcuts, and simple oversights can trigger many more chargebacks than you might think.

These cases are preventable, but identifying such errors typically requires the aid of third-party experts. In most cases, familiarity with the business can be a vulnerability; it makes you blind to subtle problems that could have big consequences.

Chargebacks911 offers an exclusive in-depth review and analysis of your operation to track down trouble spots a biased retailer might miss.

Learn more about spotting merchant errors

Error-Risk-Threat Detection

Chargebacks911 Error-Risk-Threat (ERT) Notifications are designed to flag chargebacks resulting from merchant error. The ERT intelligence examines dispute data to detect existing liabilities, isolating the risk factors causing specific  disputes.

You receive up-to-the-minute notifications of pending issues, along with specific action steps to resolve the problem.

Talk to a specialist about ERT Notifications

Intelligent Source Detection

Intelligent Source Detection (ISD) is a proprietary technology specifically created to pinpoint the true cause of chargebacks.

Rather than relying on inaccurate reason codes, ISD deploys a unique combination of machine learning and human expertise at the transaction level. This allows you to see why disputes happen and identify illegitimate claims. You can also focus on the underlying factors responsible for your chargebacks.

Learn more about Intelligent Source Detection

Advanced Customizable Reporting

Accessing pertinent data and monitoring trends are key components of chargeback prevention.

The Chargebacks911 technology platform offers a full range of user-friendly reports that can be customized to your needs. Designed to be easily read and understood, reporting includes exclusive month-to-date stats that provide a deep dive into chargeback data. This allows you to pick up on trends and other data points that you might otherwise miss.

Learn more about chargeback reporting

Preventing Chargebacks & Retaining Revenue: The Tools are in Your Hands

Preventing transaction disputes is a complicated task. Your best bet is to consider proven-effective chargeback prevention tools, while keeping in mind that at the end of the day, even the best among them are just that: tools.

Chargeback prevention tools are useful. For maximum benefit, though, they still require knowledgeable and experienced people to wield them.

Few merchants have the necessary resources available to consistently prevent chargebacks. There are simply too many variables that can change on a day-to-day basis. Your time, effort, and energy are much better spent growing your business for the future, rather than addressing chargeback issues of the past. That’s where we come in.

The fully-customized, turnkey, end-to-end chargeback solutions offered by Chargebacks911 can take chargebacks off your plate, delivering a guaranteed ROI. Prevent chargebacks. Recover revenue. Contact us today to learn more.


What is chargeback software?

Chargeback software is typically defined as a solution designed to help merchants track chargebacks, analyze sources and prevention efforts, and return data that can be used for fine tuning the process.

What are the three sources of chargebacks?

All chargebacks can be traced back to one or more of the following: criminal fraud, merchant errors, or first-party misuse (friendly fraud). 

What is chargeback management software?

Chargeback management software refers to the tools and tactics merchants use to minimize the impact of chargebacks on their business. These tools should be part of a broader strategy to prevent disputes, recover revenue, and collect chargeback data.

How do you prevent chargebacks?

There is a wide range of actions merchants can take to try and stop chargebacks before they happen. For example, address verification can help validate consumers prior to purchases, while alerts allow merchants to bypass chargebacks by refunding customers. This is just a small sample; for a comprehensive, download our free guide, 50 Insider Tips for Preventing More Chargebacks.

How do you mitigate chargeback risk?

Merchants need an overall strategy for countering the risk of chargebacks. This plan might include providing clear and accurate product descriptions and promoting terms and conditions for purchases, shipping, and returns.

Merchants should also take advantage of available fraud detection and customer validation tools, such as address verification systems and card security codes. The most important step is providing “above and beyond” customer service and maintaining open lines of customer communication, including rapid responses to requests or inquiries.

Like What You're Reading? Join our newsletter and stay up to date on the latest in payments and eCommerce trends.
Newsletter Signup
We’ll run the numbers; You’ll see the savings.
Please share a few details and we'll connect with you!
Over 18,000 companies recovered revenue with products from Chargebacks911
Close Form