As chargebacks become more and more prevalent for businesses operating online, payment processors have made an effort to create tools to help mitigate the issue. 

Today, we’ll compare and contrast two of the most common: CDRN vs RDR. Both of these are products available through Verifi, a Visa solution. They have some similarities but also a few striking differences you need to be aware of.

The Cardholder Dispute Resolution Network (CDRN) is designed to connect issuing banks and sellers with the common goal of resolving chargebacks in the pre-dispute stage before they escalate - in turn reducing costs and operational resources, all while providing a better customer experience.

On the other hand, Rapid Dispute Resolution (RDR) is a more global solution in which you can configure rules for auto-refunding disputes based on reason code, cost, or some other parameter. It’s completely automated.

Learn more about the nuances between these solutions below and how each can protect your company’s reputation and revenue. Better yet, invest in the most comprehensive solution at Disputifier, the #1 chargeback company online!

Overview of Chargebacks

First things first - what is a chargeback, and how do chargebacks affect a business? These were originally put in place as a means of protecting customers from fraud - committed either by cybercriminals or businesses themselves.

When a cardholder disputes a transaction, the issuing bank reverses the payment and transfers the funds back to the cardholder. Maybe they don’t recognize the charge on their statement, or perhaps the item they received is a far cry from what they were expecting. Perhaps the item never arrived at all! 

There are a number of reasons a customer might initiate a chargeback - but unfortunately, the system is commonly taken advantage of. Friendly fraud is becoming more prevalent as customers use the system to get free goods or skirt around refund policies.

This leads to much more than a lost sale for customers. Chargebacks can cause financial losses due to chargeback fees, increased processing costs, and even the potential termination of merchant accounts if the chargeback ratio becomes too high.

Monetary implications aside, the operational burden of gathering evidence, responding to disputes, and navigating the chargeback process can strain resources and divert attention from core business activities.

This is why having strategies in place for preventing chargebacks as a merchant is so important. That being said, let’s look at the first half of the CDRN vs RDR comparison below.

What is Cardholder Dispute Resolution Network (CDRN)?

The Cardholder Dispute Resolution Network, or CDRN for short, is a solution under the Verifi RESOLVE umbrella - which is powered by Visa. It’s one of a few tools designed to help merchants streamline the dispute resolution process.

In essence, this chargeback alert program lets merchants know right away when a customer initiates a dispute. They then have the opportunity to resolve it with the customer directly or even just issue a refund straight away, preventing progression to a more complex chargeback.

CDRN connects issuing banks, merchants, and consumers through a streamlined communication channel. When a cardholder contacts their issuing bank to dispute a charge, the bank sends an alert through the CDRN system instead of immediately processing a chargeback. This is then sent to the merchant to take appropriate action to resolve the dispute.

CDRN is a powerful solution for merchants who deal with high transaction volumes or industries where disputes are common. It gives them more control over the dispute process so they can settle issues on their terms in a timely manner.

That doesn’t necessarily mean you must refund the customer when you receive a CDRN alert. If you believe the customer is mistaken or acting fraudulently then by all means, you can contest the chargeback and go through the formal dispute resolution process.

Just be aware that as soon as you receive the alert you’ll have up to 72 hours to make a decision on how to proceed. After that, the chargeback becomes official and a formal dispute is opened. 

As of now, there are approximately 1,000 banks using the CDRN, most of which are here in the States. It’s a great way to lower your chargeback ratio if you’re finding yourself struggling. But, how does it compare to RDR?

What is Rapid Dispute Resolution (RDR)?

Now, let’s look at the other half of the CDRN vs RDR debate. Visa rapid dispute resolution (RDR) is another tool that lives under the Verifi RESOLVE umbrella, serving a similar purpose to streamline dispute management for businesses.

The primary difference here is that RDR relies on automation. This results in quicker and more efficient handling of disputes before they escalate into chargebacks.

RDR is designed to resolve disputes automatically based on predefined rules set by the merchant. It’s a powerful system for businesses looking to reduce the manual workload of managing disputes while minimizing the impact of chargebacks on their business.

So, how does it work? When a customer initiates a dispute, Visa's RDR system evaluates the claim against the criteria predefined by the merchant. 

This is something you have complete control over - from transaction amount, type of transaction, or specific dispute reasons, you can configure the parameters based on your preferences. 

If the dispute meets these criteria, RDR will automatically issue a refund to the customer, thereby preventing the dispute from progressing to a chargeback. This settles the issue in mere seconds.

The only problem is that you may find yourself issuing refunds for scenarios where you could actually win the chargeback. But for businesses focused on efficiency, RDR can be an excellent part of the dispute management arsenal.

Furthermore, merchants will find a higher coverage percentage with RDR compared to CDRN. RDR covers nearly all global visa transactions - up to 99% coverage.

CDRN vs RDR: Should You Use One or the Other or Both?

It’s clear that CDRN and RDR each have their place in helping you manage disputes - but do you really need both, or can you choose one or the other? On that note, how do you actually go about using these solutions for your business?

It all comes down to your specific business and how much you want to be involved in managing disputes. While CDRN allows for more control over what orders you do and don’t refund, it means you must be more hands-on. 

In contrast, the RDR tool automates the process so you don’t even have to think about the dispute most of the time - it will settle it for you automatically. You’re only left to handle the disputes that don’t meet your pre-defined criteria.

That being said, using both can be a great approach. Merchants can use leveraging CDRN to personally handle disputes where they believe there’s a strong case for contesting the chargeback, allowing for a more tailored approach. 

Meanwhile, RDR can handle straightforward disputes automatically, reducing the workload on your team and ensuring quick resolutions.

So, how can you start using these solutions as part of your business today? Look no further than Disputifier.

Automate Chargeback Prevention and Management With Disputifier Today!

Whether you’re struggling with frequent chargebacks for services not rendered, fraud chargebacks, chargebacks for item not as described, or anything in between, Disputifier is the best chargeback prevention company to help you get the issue under control.

Our solution leverages both Verifi and Ethoca chargeback alerts for the most comprehensive defense against disputes, helping you avoid 95% of them in the first place. You can set your filters how you see fit for the highest ROI and most hands-off approach.

The system also has AI-powered fraud scanning tools that constantly monitor your transactions and can stop up to 99% of fraud in its tracks. We’ve made sure to include false-positive protection so you aren’t rejecting legitimate orders, too.

Meanwhile, order not received mitigation tools help you keep track of lost orders and keep customers informed every step of the way, reducing these disputes by up to 80% while boosting customer satisfaction. 

But the truth is, chargebacks are inevitable, even with the best preventive measures in place. Fortunately, Disputifier fights any that slip through the cracks on your behalf so you don’t have to lift a finger.

By fighting thousands of disputes monthly for our customers, customizing responses, and implementing A/B testing, our win-rates are constantly improving. 

So, how often do merchants win chargebacks with Disputifier? Up to 70% of the time! That’s far higher than the industry average of 10-30%. But because you only pay when you win a dispute, what do you have to lose? 

Get started today to prevent and win more chargebacks as a seller and put the stress of disputes in the past for good. 

Bringing Our CDRN vs RDR Comparison to a Close

Hopefully, this guide has left you with a clear understanding of the nuances between CDRN vs RDR. Both of these Verifi RESOLVE solutions serve the same goal of reducing chargeback ratios and streamlining dispute management, but they do it quite differently.

CDRN allows for personalized dispute resolution, giving merchants more control, while RDR offers automated efficiency for handling high volumes of disputes quickly. The best approach may be a combination of both, depending on your business needs and operational capacity.

Find additional resources in our blog like our chargeback response template, what happens if a merchant does not respond to a chargeback, Visa dispute monitoring program, pre-arbitration chargeback, chargeback time limit, chargeback vs dispute, representment in chargebacks, merchant chargeback insurance, and more.

Stop letting disputes cause you stress, cost you money, affect your reputation, and steal resources. Let Disputifier handle every aspect of chargeback management for you so you can focus on what matters most to your business!