The most effective way to handle Mastercard’s monitoring programs is to do everything in your power to never see the inside of one.
A proactive, multi-layered approach to fraud and chargeback prevention — involving security tools, proactive communication, and five-star customer service — is your best defense. This will let you avoid the revenue loss, crippling fees, and reputational ruin that these dispute monitoring programs can bring about. Avoiding the fight entirely is going to be a lot cheaper than struggling to win it.
In this article, we talk about how you can prevent your business from being involuntarily enrolled in a Mastercard monitoring program in the first place.
You shouldn’t bank on this as your saving grace, though. Exemptions are granted entirely at Mastercard’s discretion and cannot be appealed. So, you may still be involuntarily placed in one or both of the card network’s merchant monitoring programs regardless. Once this happens, the clock will start ticking, and the fees will start adding up.
How to Avoid Enrollment Into the ECM and EFM
The best way to avoid enrollment is to stay in compliance with Mastercard rules at all times by lowering your chargeback and eCommerce fraud rates to acceptable levels. You can do this by deploying a multi-layered fraud prevention arsenal that consists of the following:
Transaction Monitoring Tools
Always-on transaction monitoring software that provides 24/7 coverage across your entire platform serves as a powerful first line of defense. It can automatically inspect every order before it’s approved and ensure that no checkout attempt falls through the cracks.
It also uses dozens of data points at once — like geolocation information, IP address data, and order velocity — to spot suspicious transactions in real time. By automatically flagging or blocking high-risk orders, you can stop bad actors before they ever gain a foothold and dramatically cut down on fraudulent chargebacks.
Staff Training Programs
Your team is a critical part of your fraud and chargeback defense, but only if they are fraud-aware and know what to look for. For instance, regular staff training can empower your customer service team to recognize subtle red flags of friendly fraud during customer interactions and teach them how to de-escalate issues that might otherwise turn into disputes.
Clear Billing Descriptors
Some chargebacks occur not out of malice, but mere ignorance. Customers who examine their card statements and can’t identify a charge, for example, may file a chargeback thinking it’s fraudulent.
That’s why clear billing descriptors — the short line of text that identifies a transaction — must be easily recognizable. When creating billing descriptors, use your well-known brand or website name instead of your legal corporate name. Additionally, include a phone number or email in the descriptor, and consider investing in dynamic billing descriptors so that your customers can be reminded of what they purchased as well.
Accessible Refund & Return Policies
If a customer wants a refund or return but can’t figure out how to get one, they’re not going to call in. Instead, they’ll simply file a chargeback.
That’s why you’ll need a customer-friendly refund and return policy that’s easily accessible on your website. Write it in plain English, be generous with refunds, returns, and exchanges, and offer flexible timelines so that your customers have real incentives to work with you directly to solve the problem.
Easy Subscription Cancellation Processes
Let’s be real: if a customer has to navigate several menus, fill out a form, and wait on hold for an hour to cancel their subscription… they’ll be more likely to just call the bank and file a chargeback.
A simple, one-click cancellation process respects your customers’ time and eliminates one of the most common and easily avoidable reasons for chargebacks. Besides, such an easy-to-cancel subscription arrangement is now non-negotiable, thanks to the Federal Trade Commission’s new “Click-to-Cancel” rule.
Proactive Customer Communication
Candid and proactive communication can solve problems before they even begin. Keep your customers in the loop with timely order confirmations, shipping notifications, delay alerts, and billing reminders.
If a customer knows what’s going on with their order or when they’re going to be charged, they’re far less likely to assume something is wrong and file a chargeback out of panic or frustration.
3-D Secure 2.0 At Checkout
3-D Secure 2.0 is the latest and most advanced protocol used to protect the checkout process. It works in the background to authenticate customers, adding an extra layer of security without introducing an inordinate amount of friction at checkout.
Not only does this stop fraudsters in their tracks, but it also provides a huge benefit: for many fraud-related chargebacks, implementing 3DS can shift liability away from you and spare you from enrollment in Mastercard’s EFM program.
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