Post-authorization tools
What are post-authorization tools?
Post-authorization tools are alert services that notify a merchant of a dispute after a transaction is authorized but before a is filed. They give the merchant a window to refund the charge or supply transaction details, so the dispute is resolved without entering the chargeback process.
The tools sit between and the . When an receives a dispute query, it can submit the transaction to an alert network the merchant participates in rather than opening a chargeback case straight away. Merchants subscribe through their or directly with the network, pay per alert or per resolution, and act inside a response window each network sets for itself.
Key facts
- Also known as: chargeback alerts, dispute alerts, pre-chargeback alerts
- Main services: , (RDR), and the (CDRN)
- Applies to: card a cardholder raises with their issuer, before a chargeback is filed
- Merchant options: the transaction, supply additional transaction details, or let the dispute proceed to a formal chargeback
- Coverage: depends on issuer participation in each network, so disputes from non-participating issuers arrive as chargebacks with no prior alert
- Pricing: per-alert or per-resolution fee, set by the network and the reseller
How it works
- The cardholder queries a charge. They contact their issuer about a transaction they don't recognise, didn't expect, or believe is wrong.
- The issuer submits it to an alert network. Before opening a chargeback case, the issuer checks whether the merchant participates in a network it is connected to.
- The merchant receives the alert. It carries the identifiers needed to match the dispute to an order – amount, transaction date, card details, and the statement descriptor.
- The merchant responds inside the window. A refund closes the dispute. Supplying transaction details lets the issuer resolve the query with the cardholder. No response sends the case on into the chargeback process.
- The outcome is recorded. A dispute settled by refund is recorded as a refund, so it never enters the merchant's . Unresolved cases continue as chargebacks and are counted normally.
Types of post-authorization tools
The three main services differ in who decides the refund: RDR applies rules the merchant set in advance, while Ethoca Alerts and CDRN hand the case back to the merchant for a decision.
| Service | Owned by | How it resolves the dispute |
| Mastercard | Notifies the merchant of a dispute or confirmed fraud case so they can refund and stop fulfilment | |
| (RDR) | Verifi (Visa) | Refunds qualifying disputes automatically against rules the merchant configures, with no manual response |
| (CDRN) | Verifi (Visa) | Passes the dispute to the merchant for a manual decision inside a fixed response window |
Why it matters
- A dispute settled through an alert is recorded as a refund, so it stays out of the chargeback rate that measure.
- are avoided: an alert resolution costs the alert fee plus the refunded amount, while letting the case run costs the refunded amount plus the 's chargeback fee.
- Merchant-error disputes, such as a wrong amount charged or a duplicate transaction, close without a case file, since there's nothing to contest.
- cases where the cardholder doesn't recognise the statement descriptor close on a refund before the issuer builds a chargeback record.
