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Fraud Deflect Chargeback Management

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Deflection First: How Fraud Deflect Cuts Chargebacks and Protects Your Revenue

At Durango Merchant Services, we’re thrilled to announce our partnership with Fraud Deflect, a cutting-edge solution designed to combat chargebacks and save merchants significant costs. 

If your business operates in high-chargeback industries like nutraceuticals, subscription services, gaming, SaaS, adult/dating, online training, or similar sectors, Fraud Deflect could be the tool you need to protect your revenue and streamline operations. 

In this blog, we’ll dive into how Fraud Deflect works, why it’s superior to standalone services like Ethoca or Verifi, and how it can benefit your business.

The Chargeback Challenge: Friendly Fraud on the Rise

Chargebacks are a costly reality for many merchants, especially in industries prone to “friendly fraud”— when a cardholder disputes a legitimate transaction, claiming it was unauthorized. These disputes not only result in lost revenue (the transaction amount plus fees) but also consume time and resources to resolve. 

Traditional chargeback management tools like Ethoca and Verifi’s Rapid Dispute Resolution (RDR) help by facilitating communication between merchants and issuers, but they often fall short in preventing chargebacks altogether. 

Fraud Deflect takes a proactive approach, leveraging real-time data to empower issuing banks to make informed decisions before a chargeback is processed. Deflection First is solving a dispute BEFORE it becomes a chargeback. Instead of waiting for the problem to scale, Fraud Deflect acts at the first sign of contestation — NO REFUND, NO LOSS, YOU SAVE THE SALE. It offers a significant advantage over interception-only solutions.

How Does Fraud Deflect Works?

Fraud Deflect’s innovative workflow evolves chargeback management by integrating seamlessly with existing systems. Here’s how it works:

Why Fraud Deflect Outshines Ethoca and Verifi Alone

Services like Ethoca and Verifi focus on interception — resolving disputes after they’ve already been initiated. This reactive approach adds operational overhead and forces merchants to issue refunds — losing the sale, eroding both revenue and margin.

Fraud Deflect’s Deflection First model, by contrast, stops disputes before they ever become chargebacks or refunds, delivering clear, measurable advantages:

Deflection  = Higher Savings

Let’s revisit our example with a 30 % deflection rate. A merchant has 200 disputes per month at $200 each — $40 000 of revenue at risk.

Interception Only (Ethoca/Verifi)

  • Intercepted disputes: 97 % of 200 → 194
  • Interception fees: 194 × $21 (average cost) = $4,074
  • Sales refunded: 194 × $200 = $38,800
  • Chargebacks: remaining 6 → 6 × $200 = $1,200, plus card-brand flags

Total cost: $4,074 (fees) + $38,800 (refunded sales) + $1,200 (chargebacks) = $44,074

Deflection-First (Fraud Deflect) + Interception

  • Deflected disputes: 30 % of 200 → 60
    • Saved revenue: 60 × $200 = $12,000
    • Deflection fees: 60 × $35 = $2,100
  • Remaining disputes: 140
    • Intercepted: 97 % of 140 → 136
      • Interception fees: 136 × $21(average cost)  = $2,856
      • Sales refunded: 136 × $200 = $27,200
    • Chargebacks: remaining 4 → 4 × $200 = $800, with card-brand flags
  • Total cost: $2,100 (deflection) + $2,856 (interception) + $27,200 (refunds) + $800 (chargebacks) = $32,956

Net Savings

Switching on Fraud Deflect’s 30 % deflection cuts your monthly cost from $44,074 to $32,956 — a $11,118 saving—while preserving an extra $12,000 in revenue and minimizing card-brand flags.

Even Bigger Wins with Fraud Deflect

Some Fraud Deflect clients see 40–50 % deflection rates, translating to substantially higher revenue preservation and cost reduction.

Keep Every Dollar

Deflection saves 100 % of each sale (e.g., $200 per transaction). By contrast, interception methods require refunds—resulting in lost revenue. In high-ticket verticals like gaming or subscriptions, those losses can add up to thousands of dollars.

Deflection (Fraud Deflect) x Interception (Traditional Solutions)

Fraud Deflect Traditional Solutions
When it acts Before dispute After alert is triggered
Impact Prevents it entirely Refund required
Financial cost Saves the sale Sale lost
Final result No dispute, no TC40, no VAMP impact Prevents the chargeback but the damage is done

Is Fraud Deflect Right for Your Business?

If you operate in high-risk verticals — gaming, subscriptions, SaaS, nutraceuticals, adult/dating, online training, and similar sectors — Fraud Deflect can transform your chargeback management. By preventing friendly fraud in real time, it saves more than traditional tools like Ethoca or Verifi, all while maintaining comparable costs. 

At Durango Merchant Services, we’re proud to offer this solution to our clients, helping you protect your revenue and streamline operations.

Ready to learn more?

Contact us at Durango Merchant Services Let’s deflect chargebacks and boost your bottom line together!

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