It’s common to confuse the purpose of a retrieval request, an alert, and a chargeback since they are all interrelated.
In this article you will find an in-depth description of these services, how they differ, and suggested ways in which you should be handling each of them.
A retrieval request is a formal request sent by the cardholder’s bank to obtain additional transaction information. Retrieval requests are typically sent when there is confusion about a purchase or fraud is suspected.
Response expectations differ by card brand (Visa, Mastercard, etc.). Typically, banks expect you to respond with basic transaction information or a copy of the receipt.
If you want to reduce the risk that the case escalates to a chargeback, you can respond with more than just the minimum requirements. One option is to respond with order data and other relevant information, similar to what you would provide for a dispute response. Another option is to issue a refund and respond to the retrieval request with proof that you credited the cardholder’s account.
A retrieval does not impact your chargeback ratio. However, if you don’t respond or the information you send is deemed unsatisfactory, the case may automatically advance to a chargeback.
A prevention alert, also referred to as a pre-chargeback alert, is a notification. It is triggered when a customer disputes a transaction or an issuing bank discovers a transaction is fraudulent.
Prevention alerts give you the opportunity to refund the transaction and potentially stop the dispute from progressing to a chargeback.
Alerts do not impact your chargeback count or ratio. However, if you do not refund the transaction or respond within the submission deadline, the case will likely advance to a chargeback.
There are two vendors that provide prevention alerts: Ethoca and Verifi. It's important to note that not ALL disputed transactions will trigger a prevention alert. Ethoca and Verifi are actively increasing their coverage networks and today typically cover about 30-40% of disputed transactions.
A dispute advances to a chargeback if other resolution tactics aren’t successful.
Unlike prevention alerts and retrieval requests, you do not want to refund a transaction that has a chargeback. Typically, a processor will debit your merchant account for the amount of the dispute at the time the chargeback is filed. Therefore, if you also issue a refund, you’ll incur a loss for double the transaction amount.
Another notable difference between retrievals, alerts, and chargebacks is a chargeback does impact your chargeback-to-transaction ratio.