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Chargeback Alerts

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What Are Chargebacks?

A chargeback occurs when a cardholder disputes a transaction with their credit or debit card issuer, requesting a reversal of the payment. Originally created as a consumer protection mechanism, chargebacks now also stem from:

  • Fraudulent Transactions: Unauthorized card use

  • Customer Dissatisfaction: Disputes over product or service quality

  • Billing Errors: Duplicate or incorrect charges

  • Friendly Fraud: Customers disputing valid charges, whether mistakenly or intentionally

Why Chargebacks Matter

Chargebacks can cause substantial harm to a business, including:

  • Financial Losses: Forfeiture of transaction revenue, chargeback fees ($20–$100), inventory, shipping, and labor

  • Increased Processing Costs: Higher fees or reserves due to elevated chargeback ratios

  • Reputational Risk: Negative merchant standing with processors and card networks

  • Account Termination: Excessive chargebacks (over 0.9–1.0% of volume) may result in losing processing privileges

Chargeback Alerts: A Proactive Defense

Chargeback Alerts notify merchants of disputes in real time—before they are formally filed as chargebacks. This gives merchants a critical window to intervene, often allowing them to issue a refund or resolve the issue with the customer directly.

How Chargeback Alerts Work

  1. Dispute Detection
    Alerts are triggered the moment a dispute is initiated by the issuer, based on your billing descriptor, not your MID.

  2. Instant Notification
    You receive an alert in your Bankful dashboard with dispute details (when available).

  3. Resolution Window
    You typically have 24–72 hours to resolve the issue or issue a refund before it becomes a formal chargeback.

  4. Dispute Prevention
    If resolved in time, the chargeback is avoided—protecting your chargeback ratio and processing account.

⚠️ Important Limitations & Merchant Responsibilities

To ensure transparency and reduce confusion, please note the following:

  • Alerts are generated based on the billing descriptor, not the MID. This means:

    • Alerts may trigger for any MID that shares your enrolled descriptor, even if it’s not processing through Bankful.

    • If the transaction did not occur within Bankful, the alert will still populate.

  • In cases where you believe an alert was triggered incorrectly or is missing critical information, you may submit a request for review or rebuttal by submitting a support ticket. Please include:

    • The date and alert ID (if available)

    • A summary of the issue

    • Any supporting documents or references (e.g., processor details)

Benefits of Chargeback Alerts

  • Prevents formal chargebacks before they are filed

  • Reduces dispute-related losses

  • Maintains a low chargeback ratio

  • Protects processor relationships and approval rates

  • Builds trust with customers through proactive resolution

How to Activate Chargeback Alerts

  • Login to Bankful
  • Click on Chargeback Alerts on the menu to the left of your dashboard
  • Click “Activate Chargeback Alerts”

  • Click on “+ Add additional MID”

  • Input your “Merchant ID Number” and your listed processing bank’s “Descriptor”
    • This information needs to be precise in order for Chargeback Alerts to function properly
    • Please reach out to your processing bank or agent to ensure this information is correct
    • You may also contact us at support@bankful.com

How to Utilize Chargeback Alerts

  • Once your request is approved, your Chargeback Alert page will look like this:
  • You can engage the top toggle button to enable automatic refunds for your chargebacks

  • If you incur any chargebacks, they will appear as in the example below

  • By clicking on the + sign at the left of a chargeback you can expand the details
  • You can also to choose to refund from here

11.20.2024