Which Chargeback Alerts Can I Use, RDR or Ethoca?

The short answer: they are not alternatives. Visa RDR covers disputes on Visa cards and Ethoca alerts come from Mastercard's programme, so which you can use depends on the cards your customers pay with and on your payment processor. If your processor supports both, most merchants who want prevention enroll in both.

Key points

• RDR is a rule: once you enroll, a matching Visa dispute is refunded by the network and never becomes a chargeback.
• An Ethoca alert is a warning: the customer is refunded before the chargeback is filed.
• Either way the customer gets the money back. You avoid the chargeback, not the refund.
• Whether you can enroll depends on your processor. The table below is ours.

What is the difference between RDR and Ethoca?

Stripe describes them as "dispute prevention products offered by Verifi (a Visa solution) and Ethoca (a Mastercard solution)."

RDR has conditions. Stripe notes that it "only resolves disputes when the cardholder disputes the full amount of the original transaction and the transaction hasn't been refunded", and that enrollment "only appl[ies] to chargebacks initiated after enrollment." It does nothing for disputes already open.

What do I gain, if the customer is refunded anyway?

You trade the sale for the absence of a chargeback. That is worth something for three reasons:

• The dispute fee. On Stripe, resolved disputes "don't incur a dispute received fee."
• Your dispute rate. Stripe says "resolved disputes don't count towards your overall dispute rates, helping you stay out of monitoring programs." Visa's monitoring programme fact sheet says its count "excludes disputes resolved through pre-dispute solutions, contingent on the timing of the data extract."
• Your time. There is no response to write.

What you give up is the chance to win. A dispute you could have fought and won is, under prevention, a refund. That is why the choice of what to prevent matters more than the choice of programme.

Which processors can I use them on?

This is ChargePilot's own coverage, as it stands today. Other providers and your processor's own tools may differ.

You pay only when a chargeback is actually prevented, never for merely receiving an alert. Each fee is flat, whatever card network the payment ran on. The same table, with the detail, is on the product page and the pricing page.

The third row is a different thing. A Stripe early fraud warning is a fraud report from the card issuer, not a dispute; we cover the decision it asks of you in a separate article.

How much say do I have over each alert?

With Visa RDR on ChargePilot, none per dispute: once you enroll, the card network resolves the dispute itself, and there is no limit to set.

With Ethoca alerts you can keep a say. Set a limit, and for an alert above it you are asked: refund, or fight for $15 plus 15% if we win. If you do not answer in time, it is refunded and the prevention fee applies. With no limit set, every alert is refunded.

How do I decide what is worth preventing?

These are hypothetical examples.

• A $24 order disputed as fraud: the fee to prevent it is close to the sale. Preventing it protects your dispute rate, not your margin. A merchant near a monitoring threshold may still want it.
• A $90 subscription renewal the customer forgot about: prevention ends it cleanly, and you avoid a dispute fee.
• A $1,200 order, delivered and signed for: this is one you may prefer to fight. A limit below $1,200 on Ethoca alerts means you are asked first.

The rule of thumb is to prevent what you would probably lose or cannot afford to have counted, and to keep the option to fight what you can prove.

Where does ChargePilot fit?

You enroll from your settings, and ChargePilot handles the alerts on the processors in the table. Disputes that are not prevented are answered the usual way: we build the response from your records, with a person on our team reviewing it, for 15% of what we recover and only when we win.

Questions and answers