Crypto Exchange Chargeback Prevention

While cryptocurrencies cannot be charged back, crypto exchanges often deal with chargebacks. What makes chargebacks in this industry difficult is that the cost is never the same as at purchase since cryptos vary in price.

At CB-Alert, we help crypto exchanges limit their chargebacks and set them up with chargeback management tools to sniff out fraud before it even begins.

Key Takeaways

  • Crypto chargebacks are not inherent to most cryptocurrency transactions
  • Cryptocurrency transactions are irreversible due to blockchain technology
  •  Causes of crypto exchange chargebacks include wallet breaches, identity theft, and merchant disputes
  • Chargeback management strategies with CB-Alert involve proactive monitoring, fraud detection tools, and swift response to disputes

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What Are Crypto Chargebacks?

Crypto chargebacks are unlike traditional chargebacks, as cryptocurrencies cannot be charged back. What can be charged back is credit card purchases made with a crypto exchange. When merchants sell crypto directly, this can create a major problem as the currency transfer is built to be irreversible.

The chargeback cost is high for merchants, and the merchant may lose both the cryptocurrency and the funds used to pay for it.

Can You Chargeback Bitcoin And Other Cryptocurrencies?

You can’t charge back Bitcoin and other cryptocurrencies. Unlike traditional payment methods, where chargebacks are common, transactions involving cryptocurrencies are irreversible. 

This characteristic is a fundamental aspect of blockchain technology, which ensures the security and immutability of transactions. 

Why Chargebacks Still Occur

Despite the irreversible nature of cryptocurrency transactions, chargebacks still occur due to fraudulent activities and unauthorized transactions made via credit cards. 

A few reasons why they occur are below:

  • Identify theft
  • Merchant disputes
  • Friendly fraud

Chargeback Management

As cryptocurrency exchange chargebacks can get hit twice as hard as other merchants, finding a chargeback management company you trust is essential.

Preventing Chargebacks

Here are top tips for preventing crypto exchange chargebacks:

  1. Use Advanced Fraud Prevention Tools: Incorporate robust tools such as 3DS2 authentication, RDR, and Ethoca/Verifi alerts.
  2. Ensure Recognizable Merchant Descriptor: Guarantee that your company’s descriptor name aligns with your online storefront name, facilitating easy customer recognition.
  3. Collaborate with CB-ALERT: Partner with CB-ALERT to proactively identify and prevent potential fraudsters before chargebacks occur, enhancing your overall risk management strategy.
  4. Clearly Communicate Transaction Details: To enhance customer understanding, ensure transparent communication of transaction details, including the purchase price and associated fees.
  5. Consider Refunds as a Preventive Measure: Refunding is often a cost-effective alternative to navigating the complexities of chargebacks. It also increases the likelihood of retaining the customer.
  6. Provide 24/7 Customer Service: Offering round-the-clock customer support is pivotal in countering chargebacks. This accessibility allows for timely issue resolution, refunds, or dispute resolution before customers involve their banks.
  7. Utilize Clear and Concise Billing Descriptors: Guarantee that the billing descriptor on customers’ credit card statements is clear and easy to comprehend, minimizing the risk of chargebacks stemming from confusion.
  8. Maintain Accurate Records: Keep meticulous records of all transactions.
  9. Monitor and Promptly Address Chargebacks: Leverage chargeback alert systems to stay alert regarding disputes and address them promptly, preventing further escalation.
  10. Scrutinize Irregular Orders: Questioning irregular orders is crucial when preventing chargebacks.

When Chargebacks Hurt, Call CB-Alert

Running a crypto exchange business can be challenging, especially when faced with the threat of chargebacks and friendly fraud that can swiftly impact finances. 

At CB-ALERT, we understand firsthand the stress and time-consuming nature of managing these issues.

By partnering with us, you can offload the heavy lifting of chargeback management, allowing you to reclaim valuable time to focus on growing your business. With over two decades of experience specializing in high-volume and high-ticket ventures, we’re confident we can become an invaluable asset to your operations.

Here’s what you can expect from CB-ALERT:

  • Ethoca and Verifi alerts
  • 24/7 customer service support
  • Transparent pricing model
  • RDR (Representment Dispute Resolution)
  • Visa compelling evidence 3.0 expertise
  • Gateway/CRM agnostic approach

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