What Is Ethoca Consumer Clarity & Will It Prevent Chargebacks?

I like to find the lowest hanging fruit when it comes to chargeback prevention, and I realized that Consumer Clarity is just that. As it gives customers clarity about their order.

I’ll break down what it is, how it works, and how to get started.

We’ll start with the basics.

Key Takeaways

• Allows merchants to share purchase details and manage subscriptions for cardholders.
• Prevents up to 23% of chargebacks across various industries.
• Reduces up to 70% of disputes in some cases.
• Helps prevent friendly fraud, which iswhen cardholders dispute legitimate purchases.
• Reaches over 145 million merchants in more than 200 countries.
• Saves money on fines and helps protect payment processing capabilities.

Consumer Clarity is one way to prevent chargebacks. Alerts are also effective, but they require multiple providers to use fully.

We offer access to all of these solutions. Here’s how they can help.

What Is Ethoca Consumer Clarity?

Ethoca Consumer Clarity is a platform that shows merchant details and purchase history to prevent chargebacks. It provides cardholders with detailed transaction information, including store logos and itemized receipts.

"Ethoca" is a Mastercard-owned company providing various fraud- and chargeback-prevention services. We cover more details on the company in another article.

Consumer Clarity, previously known as Ethoca Eliminator, supports over 145 million merchants in 200+ countries.

To explain its function, let’s use a scenario.

Many customers forget their purchases — I do, too. Say someone sees an unfamiliar charge. They might think, “That’s not right,” and call their bank.

Why not contact the merchant, first? Because around 73% of customers call issuers, first.

This inquiry can lead to a dispute, or chargeback.

Here’s a quick refresher if you're new to chargebacks:

A chargeback occurs when a customer disputes a transaction, requesting a reversal (not a refund) through their bank. If the merchant accepts or loses the chargeback, it raises their chargeback rate. High rates lead to fines or loss of payment processing abilities.

The above is friendly fraud, where cardholders dispute a legitimate charge, often unknowingly defrauding the merchant.

Friendly fraud costs merchants up to $125 billion annually in lost revenue and fees.

Intentional fraud is different and known as chargeback fraud. We cover the differences in another article.

Consumer Clarity helps customers remember their purchase by offering detailed information. It also allows merchants to add call-to-actions and manage subscriptions.

Let’s dive deeper into its features.

Summary: Allows merchants to share purchase details with customers. This can help prevent friendly fraud.

What Information Does It Share?

Consumer Clarity provides the following details upon request:

1. Merchant information:

• Name
• Description
• Category code
• Website
• Contact information
• Terms
• Refund policy
• Customer service instructions
• Merchant action
• Additional info
• Company logo

2. Transaction details:

• Amount
• Order number
• Date
• Items purchased
• Quantity of items purchased
• Refund status
• Transaction type
• Authorization code

3. Customer information:

• Customer name
• Billing address
• Purchase history

4. Technical information:

• IP address
• Device name

5. Product details:

• Item name
• Transaction ID
• Payment type
• Listing price
• Tax information
• Purchase location
• AVS, CVV, and 3-D Secure codes
• Description
• Images
• Tracking information
• Estimated carbon impact

Here’s an example of what this could look like.

Let’s review additional perks before discussing how it works.

Other Perks

Besides providing information, Consumer Clarity allows users to manage subscriptions and for merchants to include call-to-action links in itemized receipts.

Here’s an example of subscription management:

Why would you want this?

More than 43% of customers are likely to cancel a subscription within a year. And over 36% of chargebacks come from subscription-related issues. Sometimes, customers dispute recurring charges even after attempting to cancel.

The Consumer Clarity hub allows users to see all recurring payments and allows them to upgrade, pause, or resume their current subscription.

The Consumer Clarity hub shows all recurring payments, letting users upgrade, pause, or resume their subscriptions. For instance, a customer might pause a subscription during travel through their bank app, reducing frustration and support requests.

The call-to-action feature is also helpful:

These “customizable links” allow merchants to encourage actions like:

• Leaving a review
• Requesting a refund
• Signing up for a loyalty program

Such features can increase revenue, strengthen customer loyalty, and reduce chargebacks.

Moreover:

Sellers who have used clear call to actions have seen up to a 161% increase in customer conversions [1]. 

For businesses aiming to “go green,” the carbon score feature shows the environmental impact of purchases.

Now, let’s examine how Consumer Clarity works.

How Does Consumer Clarity Work?

Here’s the Consumer Clarity process:

1. Cardholder inquires about a purchase with their bank.
2. Issuer sends a request to Ethoca using their API.
3. Merchant provides Ethoca with the purchase details.
4. Ethoca shares the information through the bank’s app or website.

Here’s a detailed image of the process:

Source: Mastercard

Here’s a video explaining the process:

https://www.youtube.com/watch?v=U-EtgPCmDrs&t=171s

We’re not done with the process, yet.

After responding to an inquiry, you should:

• Cancel fulfillment if necessary;
• Issue a refund and update your CRM;
• Stop recurring payments if requested; and/or
• Flag or ban problematic accounts as needed

Whether you ban them depends on the situation. If the customer just wanted information and isn’t causing drama, don’t escalate.

For instance, if a customer disputes a subscription, pause or cancel it and issue a refund based on policy.

If they’re making a big deal out of a simple mistake, take that as a red flag. Immediately cancel their orders and don’t forget about reconciliation. Otherwise, you might mess up your chargeback accounting.

Here’s what each party would do with Consumer Clarity:

• Merchants: Respond to customer transaction inquiries with real-time details.
• Cardholders: View transaction information through their bank’s app or website.
• Banks: Use Consumer Clarity to answer inquiries, sharing details via apps or call centers.

It sounds straightforward, but does it really reduce chargebacks?

Does Consumer Clarity Prevent Chargebacks?

Yes, Consumer Clarity prevents chargebacks, reducing them by up to 23% across industries [2]. When properly implemented, some businesses see chargeback reductions of up to 70%. Clear communication with customers resolves disputes before they escalate to chargebacks.

Those numbers are from issuers, which gives us a better overall view of chargeback prevention with Consumer Clarity.

But it doesn’t paint the whole picture.

Here’s a screenshot from the PDF of this data in the sources:

Folks in North America saw a 34% reduction in chargebacks when providing digital receipts. This number was 21% with their European counterparts. Still, many chargebacks prevented.

By the way, most of this data came from 2023 and 2024.

Does it say whether merchants recently incorporated other chargeback prevention methods at the same time as Consumer Clarity?

Nope.

I’ll take this at face value, though. Because giving customers the ability to control subscriptions is a game changer. As 36.6% of chargebacks come from subscription-related issues.

Removing those issues prevents chargebacks. Yeah?

If you’re struggling to keep your chargeback rate below 0.65%, then you’ll need to consider other chargeback prevention methods. For instance, by using chargeback alerts.

Ethoca also offers these. But they mostly support Mastercard orders. That’s when you’d need to add CDRN and RDR alerts. So long as your chargebacks are coming from Mastercard purchases.

See this guide for more ways to prevent chargebacks. And this one to learn more about chargeback alerts.

What are its downsides?

While Consumer Clarity is highly beneficial, it may require additional technical resources to integrate with existing merchant systems, and its functionality depends on your ability to work with Mastercard.

Consumer Clarity sounds pretty cool. How do I use it?

Summary: Consumer Clarity does prevent chargebacks through subscription controls and other features.

How Do You Use Consumer Clarity?

You have two options: contact Ethoca directly or work with a reseller. Ethoca’s process involves setting up with customer support to integrate the solution.

Resellers, however, often bundle Consumer Clarity with other services like chargeback alerts.

For more on evaluating chargeback management services, check our guide. Note that these services can be costly.

But:

If you put in work to go with Ethoca, you could save a lot of money on what you would have otherwise blown on chargebacks.

Speaking of. How much does it cost to use Consumer Clarity?

How Much Does Ethoca Consumer Clarity Cost?

Consumer Clarity is free for merchants through Ethoca. Many resellers also offer it at no cost, though some chargeback solutions may have monthly fees for access to various tools, including Consumer Clarity.

You might have heard of Order Insight. Should you use it over Clarity?

Summary: It’s free.

Consumer Clarity vs. Order Insight

Both Consumer Clarity and Order Insight prevent chargebacks, though they differ in supported platforms and features:

• Platform: Consumer Clarity is for Mastercard transactions, while Order Insight is for Visa.
• Features: Consumer Clarity includes subscription management; Order Insight does not.
• Details: Consumer Clarity provides more detailed transaction information, helping customers make informed decisions about chargebacks.

You don’t need to choose one over the other since Consumer Clarity doesn’t cover Visa transactions. Both solutions are also free.

Does that mean Order Insight is just Visa’s “Consumer Clarity”? Yes. I wrote an in-depth guide on it, here.

Benefits of Consumer Clarity for Merchants

Consumer Clarity benefits merchants in several ways:

• Lower chargeback rate: Helps resolve disputes without a formal chargeback.
• Saves money: Retains revenue by managing disputes without lost revenue.
• Solves problems faster: Speeds issue resolution by providing real-time transaction data.
• Better experience: Improves customer experience with prompt, helpful support.
• Saves on fulfillment: Cuts fulfillment costs by allowing merchants to halt fulfillment for disputed orders.
• Fewer declined orders: Lowers declined transactions by reducing mistaken fraud claims, improving reputation.

The obvious benefit is that Consumer Clarity helps reduce friendly fraud chargebacks by providing customers with more information about their order. Preventing them from misremembering.

This also leads into dealing with issues quicker and an improved customer experience. Leading to cost savings and benefits for all sides.

The subscription management tool is the cherry on the cake. It allows customers to manage their subscriptions with minimal strain on your customer service team.

With that in mind, is Clarity worth using?

Is Consumer Clarity Worth It?

Yes, Consumer Clarity is worthwhile if you accept Mastercard transactions. It’s free to use and effectively prevents chargebacks.

On average, merchants spend $2.40 in fees for every dollar lost to chargebacks [3]. Using Consumer Clarity helps prevent this exponential cost by resolving issues before they become disputes.

79% of customers report unrecognized purchases to their bank [4]. 40% of folks believe it’s hard to manage their subscriptions. And up to 86% of chargebacks come from friendly fraud [5].

Consumer Clarity meets all those needs and can help tackle friendly fraud chargebacks. It’s also probably why 92% of merchants are offering or planning to offer digital receipts.

For additional friendly fraud prevention strategies, see this guide.

Let’s finish this off with commonly asked questions.

FAQs

What Is the Difference Between Verifi & Ethoca?

Ethoca and Verifi differ in network and coverage. Ethoca, owned by Mastercard, operates globally with manual dispute handling. Verifi, owned by Visa, focuses on US transactions with automated dispute resolution through RDR.

Wrapping Up

Consumer Clarity is a great way to give shoppers control over subscriptions and to give them more information about purchases. Both perks have resulted in fewer chargebacks for issuers and merchants.

To further reduce your chargeback rate, consider chargeback alerts. Ethoca provides Mastercard-specific alerts, but you’ll need Verifi’s alerts for broader coverage.

We offer access to all alert types. Give them a try.

Sources

• [1] CTA stats. Wiser Notify. 2024.
• [2] Creating transparency to reduce chargebacks. Ethoca. 2024. PDF.
• [3] Chargeback fee. Verifi.
• [4] Digital banking trends. Ethoca. 2024.
• [5] Fraud statistics. Expert Market. 07/15/2024.