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# How Chargeback Protection Works

## Understanding How Fraud Decisions Are Made

When merchants opt-in for chargeback protection services, there are a few key pieces of information that Coinflow needs to pass along to our provider. The accuracy of the fraud decision-making models heavily depends on the quality and completeness of the data merchants share with us.

For example, if a merchant opts-in for chargeback protection but has limited historical transaction data or small purchase volumes, it will take more time for the data models to adjust to the merchant's customers' behaviors. Or, if a merchant provides too large a range of transaction sizes, but has a low risk tolerance, the models are likely to make a more stringent decision in its fraud analysis.

During onboarding, merchants are expected to fill out a comprehensive questionnaire covering various aspects of their business operations. This includes:

✅ **Estimated Gross Monthly Volume**\
The anticipated total transaction volume per month.

✅ **Average Cost of Goods**\
The typical price range of products or services sold.

✅ **Expected Transaction Sizes**\
The average and range of transaction amounts.

✅ **Customer Geolocations**\
The primary geographic locations customers will make purchases from.

✅ **Historical Transaction Data**\
Detailed records of past transactions, including any previous chargebacks.

✅ **Previous Chargeback Approval Rates**\
Historical data on chargeback occurrences and approval rates.

✅ **Ideal Training Period**\
Preferred duration for the initial training period of the fraud detection system\
(e.g., How much time are you willing to allow the data models to learn your customer purchase profile).

✅ **Risk Tolerance**\
The level of risk you are willing to accept\
(e.g., Are you willing to accept more false positives vs. more false negatives).

✅ **Known and Trusted End-Users**\
A list of customers who are verified and trusted.

#### Examples of what customer data is helpful to optimize these fraud models:

[See templated data to understand what data points to pass to Coinflow](https://docs.google.com/spreadsheets/d/1pqZHB03HTPuztGGXVce9mgaenZtyEQYowPOmRtZ3Dzc/edit?gid=0#gid=0)

## Training Period

Implementing effective fraud prevention measures requires an initial training period where the system learns and adjusts to your customers' spending patterns.

During this training phase, there may be some false positive decisions, which may cause approval rates to be initially lower, especially if there is limited transactional data available. This period is crucial for calibrating the system to distinguish between legitimate and fraudulent transactions accurately. Our team will monitor all transactions, but your input is essential in identifying a fraudulent user that makes a purchase.

In order to bring approval rates in line with merchant expectations quicker,[ we have multiple options available to you to override chargeback protection decisions](/guides/checkout/payment-security-risk-management/fraud-protection/overriding-chargeback-protection#overriding-chargeback-protection-decisions) during this training period.