Chargeback Protection - Handle Disputes Proactively

This Knowledge Base article is designed to help vendors understand and set up the Chargeback Protection feature within PayKickstart. This tool allows you to resolve disputes before they become official chargebacks, protecting your merchant account health.

Written By Stefan S.

Last updated 6 days ago

PayKickstart’s Chargeback Protection integrates with major alert networks to notify you the moment a customer initiates a dispute. By resolving these issues early, either through automated or manual refunds, you can prevent chargebacks from affecting your dispute ratio and payment gateway standing.

Step 1: Configuration

To begin, navigate to Configure → Chargeback Protection. This section allows you to link your payment gateways so that you can receive your chargeback alerts.

To accurately match pre-dispute notifications with your specific transactions, you will need to provide the following details for your gateway:

Field

Description

BIN

Bank Identification Number: The first 6 to 8 digits of the credit card numbers processed, used to identify the issuing bank.

CAID

Card Acceptor ID: A unique ID assigned to your merchant account by your payment processor.

Visa ARN

Acquirer Reference Number: A unique number assigned to a transaction as it moves through the payment flow (Highly Recommended).

Enrollment Services

You can toggle enrollment for three major industry networks:

  • Ethoca (Mastercard): Provides real-time alerts for Mastercard disputes.

  • CDRN (Cardholder Dispute Resolution Network): A Verifi (Visa) developed service that directs dispute notifications to you before they become chargebacks.

  • RDR (Rapid Dispute Resolution): An automated Visa system that triggers a refund based on rules you define, instantly resolving the dispute.

Statement Descriptors

Accurate descriptors are vital for matching alerts. PayKickstart automatically pulls descriptors from your product settings, but you can add Custom Descriptors to ensure they match exactly what appears on the customer's bank statement.

Step 2: Automation Rules

Navigate to the Automation tab to decide how PayKickstart should handle incoming alerts. Because dispute windows are often only a few hours long, automation is highly recommended.

Default Dispute Alert Rules

Choose between two primary handling methods:

  1. Manual Review:

    • You receive an instant notification when an alert is received.

    • You must manually issue a refund within a short window (usually hours) before it escalates to a formal chargeback.

  2. Auto-Refund:

    • The system automatically issues a refund the moment an alert is received.

    • Best for: Low-ticket products or businesses prioritizing customer satisfaction and account longevity over individual transaction retention.

Conditional Rules (Optional)

You can set overrides to trigger a Manual Review or an Auto-Refund instead of the selected default option under specific conditions:

  • Amount: Set thresholds (e.g., manually review any alert where the order value is greater than $200).

  • Billing Type: Differentiate between One-time and Recurring payments.

  • Campaign/Product: Apply specific rules only to certain products or campaigns.

Step 3: PayPal Integration

For vendors using PayPal, the system handles Inquiries specifically. When a customer files a dispute, it often begins as an Inquiry stage before becoming a full chargeback.

  • Immediate Refund: Automatically refund the PayPal inquiry as soon as it is filed to prevent escalation.

  • Scheduled Refund: Process the refund one day before the inquiry transitions into a formal chargeback, giving you time to potentially resolve the issue with the customer directly.

Step 4: Managing Alerts

The Alerts tab provides a real-time dashboard of all incoming notifications.

  • Transaction ID & Date: Quickly identify the customer and order details.

  • Alert Source: See whether the alert came from Ethoca, RDR, or CDRN.

  • Status: View at a glance if the transaction has been Refunded (dispute resolved) or is Not Refunded (requires manual action).

Resolving an alert via a refund does not count against your merchant account's chargeback ratio.
This is the most effective way to keep your payment gateways active and healthy while reducing manual support overhead.