If you've ever checked your chargeback portal and seen a case marked "resolved" before you even knew there was a problem, you're not alone. Many merchants across forums are asking the same thing:
Why am I getting flagged, refunded, or charged back without warning?
The answer usually ties back to one of two things:
- Early fraud warnings (EFWs)
- Visa's Rapid Dispute Resolution (RDR) flags
These alerts are designed to protect customers from fraud. But to merchants, they can feel like silent takedowns. Let's break them down and go over how to respond when they show up.
Early Fraud Warnings: What They Are
Early fraud warnings are alerts from card networks, mainly Visa (via Verifi) and Mastercard (via Ethoca). These alerts are triggered when a cardholder's bank detects suspicious activity or when the cardholder calls the bank to report fraud.
The key point:
You have a small window to act before this turns into a chargeback.
If you're integrated with Verifi or Ethoca, you might get a notification that includes:
- Cardholder info
- Transaction details
- A short time frame (24–72 hours) to refund or resolve the issue
If you refund within that window, the chargeback might be avoided. If not, you'll likely see a fraud code like Visa 10.4 (Other Fraud—Card Absent Environment) or Mastercard 4837 later on.
Visa RDR Flags: Instant Refunds, No Contest
Visa's Rapid Dispute Resolution (RDR) program is another layer of automation. If you've opted in (or your processor enrolled you), you may be auto-refunding some disputes before they ever hit your dashboard.
Here's how RDR works:
- The system scans for disputes that meet certain criteria (like low dollar amount or recurring transactions)
- If a rule matches, it auto-refunds the transaction to the cardholder
- You don't get to respond or provide evidence
- The case is "resolved" immediately, without going through the usual chargeback process
Some merchants call this a "silent chargeback." It technically isn't a chargeback because it gets resolved before the claim is filed, but you still lose the sale.
Why Merchants Are Getting Caught Off Guard
Merchants across the board report frustration with how early warnings and RDR behave. Common complaints include:
- "I never saw a dispute, just a refund and closed case."
- "Why was this flagged as fraud? The customer used 3DS."
- "These alerts never match my payment records."
The confusion usually comes down to timing, payment method, and issuer behavior.
1. Timing Gaps
By the time you get the early warning or RDR notice, the customer may have already talked to their bank. If your system doesn't monitor alerts in real time, you might miss your chance to act.
2. Payment Type
Card-not-present transactions (like online orders) are more likely to trigger these alerts, especially if the cardholder doesn't recognize the statement descriptor.
3D Secure and AVS help, but they're not bulletproof.
3. Issuer Behavior
Some banks are more aggressive about flagging certain merchants. Subscription services, digital goods, and dropshippers are especially vulnerable. Issuers might treat recurring transactions as suspicious, even when customers don't.
How to Respond to Early Fraud Warnings and RDR Flags
If you're getting hit with these alerts and auto-refunds, you're not powerless. Here's what you can do.
Monitor Alerts Daily
If your payment provider offers alert access through Verifi or Ethoca, check it daily or automate your monitoring. Speed matters. Some alerts give you only 24 hours to refund before a chargeback is triggered.
Use Clear Billing Descriptors
Confused customers = more fraud claims. Make sure your statement descriptor is easy to match with what the customer expects. Include your brand name and contact info if possible.
Analyze Which Transactions Trigger Alerts
Look for patterns in flagged transactions. Are they recurring? From a certain region? High dollar amounts? This can help you adjust fraud settings or customer communication strategies.
Ask Your Processor About RDR Rules
Not all merchants are opted into RDR automatically, but some are. Ask your processor what rules are in place, whether you can edit them, and how to turn them off if they're hurting your bottom line.
Real Insight from the Field
One merchant in a payment forum shared how they got blindsided:
"I kept seeing cases marked as 'resolved' before I even got a dispute. Turns out I was enrolled in RDR by default. I didn't know my processor had turned it on. I lost over $1,200 in sales before I figured out what was happening."
Another mentioned this about early warnings:
"Verifi alerts helped me stop a string of stolen card orders before they became chargebacks. But you have to act fast. I missed the first few and paid for it."
These situations aren't rare. Early fraud systems work best when you're ready to catch the signals and move quickly.
Know What's Coming Before It Hits
Silent alerts like early fraud warnings and RDR flags can feel like a blindside. But if you understand what they are, why they happen, and how to catch them early, you can cut losses and avoid future chargebacks.
FAQ: Early Fraud Warnings and RDR Flags
What's the difference between a fraud alert and a chargeback?
A fraud alert (like an early warning) is a heads-up from the card network that someone may be about to file a chargeback. A chargeback is the formal dispute where funds are taken and the merchant is asked to respond.
Can I opt out of RDR?
In most cases, yes. Some processors enroll you by default, but you can ask to adjust the rules or opt out entirely. Make sure to get clarity from your payment provider.
Do early warnings affect my chargeback ratio?
Yes, if you ignore them. Early warnings can prevent a chargeback if you act fast. But if you don't, they often turn into actual chargebacks—especially with fraud codes.
Are these alerts available for all transactions?
Only if your processor supports Verifi (Visa) or Ethoca (Mastercard), depending on your setup or payment gateway, some alerts may not be passed along.
Get Ahead of Chargebacks with Chargeblast
Don't wait for refunds and fraud flags to pile up. Chargeblast helps you monitor disputes, respond faster, and reduce chargebacks before they impact your business. Whether you're dealing with early warnings, RDR, or confusing fraud codes, our tools help you stay in control.
