Early fraud warning (TC40 / SAFE)
explained.

Where EFWs come from

Card networks require issuers to report fraud. Stripe explains that early fraud warnings are sourced from those issuer reports on the Visa, Mastercard and JCB networks, including Visa TC40 reports and Mastercard SAFE (System to Avoid Fraud Effectively) reports. The reporting requirement doesn't decide whether the issuer files a dispute: an EFW is a warning, not a chargeback.

In the Stripe API, each warning carries the charge, a fraud type labelled by the issuer (such as unauthorized use of card, made with stolen card or card never received) and an actionable flag, which Stripe defines as not yet disputed and not fully refunded.

Should you refund?

• How often they escalate: Stripe says about 40% of Visa and Mastercard EFWs become fraud disputes if the charge is not refunded, varying by network and amount.
• Stripe's rule of thumb: refunding is typically optimal on charges roughly at or below your dispute fee, and likely not worthwhile on charges more than 35% above it, unless dispute volume itself threatens your account.
• Refund early for physical goods: an EFW on an unshipped order is a reason to stop fulfillment, not just refund.
• The warning stays on record. Stripe notes a refund doesn't remove the fraud report; only a reversal, usually within about 2 hours of capture, can prevent it.

Why EFWs matter even without a dispute

Stripe states that Visa counts these fraud reports toward identification in its VAMP monitoring program. A wave of fraud reports can push you toward monitoring thresholds even if every case is refunded. See chargeback ratio monitoring.

A worked example

A merchant with a $15 dispute fee receives three EFWs:

1. $12 digital download: refund. It costs less than the fee and the 40% escalation risk.
2. $480 order, unshipped: hold fulfillment and refund. Shipping would add the goods to the loss.
3. $480 order delivered two weeks ago to the billing address, AVS and CVV matched, customer with three prior orders: a judgment call. Some merchants keep the sale and prepare evidence; others refund to protect their ratio.

Common mistakes

• Auto-refunding every EFW. Stripe warns this refunds many charges that would never have become disputes.
• Refunding and also fighting. Once a dispute opens, a refund generally can't be issued outside the dispute process.
• Assuming no EFW means no fraud, or that an EFW always arrives before the dispute. Stripe notes EFWs can arrive after a dispute because the systems aren't synchronized.

How Verdikx helps

Verdikx is a fraud, chargeback and dispute platform for e-commerce and SaaS merchants, made by Verdikx LLC. Stripe early fraud warnings are live in Verdikx on Growth and Pro. Once Stripe is connected, warnings land in the Prevention inbox with a recommendation and actions: Refund now, Hold fulfillment, Refunded elsewhere, Don't refund (keep the sale; if it becomes a dispute Verdikx builds evidence) or Link order. Optional automatic refunds run only when every condition you set matches: the source is enabled, the currency matches, the amount is within your limit, the order is linked and unfulfilled or digital, and a refund method is available. Otherwise Verdikx recommends and waits for you. Card-network alerts (Visa RDR and CDRN, Mastercard Ethoca) are coming soon. See Stripe disputes.