Charge Alerts benefit all types of online retailers and merchants in reducing their chargebacks, and they are especially useful for merchants that offer digital goods, subscription services and recurring billing, as well as merchants with high chargeback margins.

Chargeback Alerts provide a means of communication between participating card chargebacks and merchants, facilitated by a service provider, enabling chargebacks to notify merchants of transactions they intend to process a chargeback on due to suspected fraud and or a cardholder initiated dispute. This communication occurs outside of and before the chargeback is processed by the chargeback with the intent of providing merchants that are participating the opportunity to address the issue and or to process a refund or credit to prevent it from ever becoming a chargeback.

Key considerations when implementing or buying this functionality include:
How large is the provider’s network of participating chargebacks? This should be considered in terms of the number of cards issued by participating banks rather than just the number of different chargebacks participating.
Does the service apply only to fraud or to both fraud and non-fraud related chargebacks?
How are transactions flagged by chargebacks to become alerts? Does it require the cardholder to contact the chargeback and dispute the charge, or does the chargeback provide information on all compromised cards to the service provider?
Are both domestic and international chargebacks participating in the service?
Can merchants provide information on a transaction to the card chargeback? (one way versus two way communication)

Typically chargeback alerts are sent to merchants through the service provider to recognize transactions that may be fraudulent or would otherwise result in some type of chargeback without intervention. However there are some service providers that provide real time data sharing between the merchant and chargeback to look for potential fraud. In this case the chargeback may provide a real time alert or post alert when fraud or a chargeback is likely.