How to Use TC40 Data

Merchants have access to a seemingly unlimited amount of data. This data includes customer details, purchase history, risky accounts, your sales numbers, and more. While this data can be valuable, its value is lost when merchants don’t know how best to use this data.

This is the case for TC40 data and understanding how it is related to chargebacks. While TC40 data is useful, it is not the best way to proactively prevent chargebacks.

When used as part of an end-to-end chargeback prevention solution, this data can be valuable for merchants. However, it should not be the sole focus for merchants when evaluating their overall fraud prevention and risk management strategy.

Understanding TC40 Data

When a customer makes a fraud claim, their card-issuing bank generates a TC40 data claim. This claim is sent to the merchant’s acquirer, any other issuing banks, and credit card brands including Visa and MasterCard. There are no guarantees that merchants receive these TC40 data reports.

These files are typically very large, making it challenging for easy transmission and review. TC40 data claim reports include:

• Merchant details
• Bank details for those involved in the transaction
• Transaction details, such as when and where the transaction occurred

Visa collects this TC40 data as part of its Risk Identification Service (RIS), and for MasterCard this data is part of the System to Avoid Fraud Effectively (SAFE) report.

Using TC40 Data Correctly

Many merchants mistakenly believe that TC40 data claims can stop chargebacks from being filed. This is not the case. Merchants should not rely on TC40 data to stop chargebacks or to be used with any reliability in a chargeback representment case.

TC40 data is a good tool for merchants when making efforts to improve internal fraud prevention measures. However, it is often misapprehended by merchants to be useful as a proactive tool to prevent chargebacks.

Remember that these TC40 data claim reports are only made available to merchants at the discretion of the acquirer/processor. As well, because these files are typically very large, many processors choose not to provide these reports on a consistent basis.

A TC40 data claim is simply a report of fraud. It does include useful information; however, this information is not enough to prevent chargebacks or to represent chargeback claims. The chargeback process may still be initiated after a TC40 data claim, so it’s important that merchants are not relying on this data as a first line of defense.

Looking Beyond TC40 Data

Be wary of services that provide chargeback alerts based on TC40 data. This is a costly and ineffective approach to monitoring and preventing chargebacks. Typically, merchants who do use these services end up wasting money on unnecessary refunds on transactions that never end up as chargebacks. Remember, a TC40 data claim is not a chargeback claim—it’s a fraud claim.

Because TC40 data claims do not prevent chargebacks, merchants must have an end-to-end solution in place that will work proactively on the merchant’s behalf. Merchants can benefit from using an integrated approach that focuses on preventing chargebacks on the front-end and back-end.

Use the front-end protection to notify you immediately when a chargeback has been initiated, to provide you with the chance to act fast and resolve the case before it escalates. The key in chargeback prevention is in having immediate access to the data and knowledge you need to react and respond.

The back-end protection of our end-to-end solution brings chargeback protection full circle. You have easy access to the data and knowledge you need to recover lost profits and to build an effective chargeback representment case.

TC40 data is useful but it is not the complete solution. You need a solution in place that allows you to easily understand the data you have access to and to then respond quickly and effectively. Contact us to learn about our end-to-end chargeback management solutions.