What is TC40 Data and How Can Merchants Use It?

As retail merchants, you have a mountain of data available to you about your customers and their transactions: What they bought, how much they paid, personal details, purchase history, and so on. Buried in that mountain is a small nugget called TC40 data.

This data is collected by Visa as part of its Risk Identification Service (RIS) and by Mastercard for its System to Avoid Fraud Effectively (SAFE) report.

Buried in all your merchant sales data is a little nugget called TC40 data, which can be helpful, but you can't rely on it.

A TC40 data claim is something a credit-card issuing bank creates whenever a customer makes a fraud claim on a particular transaction. That claim is sent to your acquiring bank, other issuing banks, and the credit card networks. However, as the merchant, you are not usually notified of the TC40 data claim right away, but it helps if you can find it because it can help strengthen your case against any chargebacks. It can have some other benefits as well, but only if you use it correctly.

According to Verifi (a Visa company), the TC40 data claim report includes:

  • Your merchant details
  • Bank details for both the merchant and the card-issuing bank.
  • Details about the alleged fraud transaction such as when and where it occurred

And it’s in this data where you can find your advantage.

How to Use (and Not Use) TC40 Data

The TC40 reports contain all of the information collected whenever a customer says they were the victim of fraud. But it doesn’t include friendly fraud or disputes from unhappy customers. This means it’s limited in its usefulness.

TC40 data can help merchants improve their internal fraud prevention measures, although Verifi says it’s “often misused by merchants as a proactive way to prevent chargebacks.”

One way it’s misused is because some merchants will rely only on TC40 data to alert them to possible chargebacks. If you do this, you’re missing a lot more potential chargebacks.

Instead, you should use your TC40 data to track patterns of fraud possibly being perpetrated at your business. If you see a particular trend in terms of customers, products ordered, or amount spent, you could take steps to improve your fraud prevention strategy and prevent future fraud.

Additionally, TC40 reports are only made available to merchants at the discretion of the acquiring bank, so some banks may not even grant you your TC40 reports, which is another reason you shouldn’t rely only on TC40 data to monitor chargebacks.

Finally, relying on a service that offers chargeback alerts based only TC40 data may also result in unnecessary refunds on transactions that would not have become chargebacks in the first place. In the meantime, you may inadvertently let other chargebacks go by because you were looking at the wrong set of data.

Bottom line: It’s important to pay attention to your reports as a way to measure your fraud prevention effectiveness, but it’s more important that you don’t rely solely on TC40 data to capture all your chargeback reports. The TC40 data does not represent every chargeback, and every chargeback doesn’t have a TC40 report. You could have a month where you don’t receive any fraud reports and assume that everything is okay, when in actuality, you have 10 or 12 chargebacks waiting for your attention.

If you want to better monitor your fraud alerts, and want to do more with that data, CB-Alert can help. For more information, please visit the CB Alert website.

Photo credit: Kevin Ku (Pexels, Creative Commons 0)

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