Verifi CDRNAn Easy-to-Implement Tool for Controlling Visa Disputes

Verify CDRN Alerts: What They Are, What They Do, & How to Get Them

Chargebacks are a pain. That doesn’t mean you have to write them off as just another “cost of doing business,” though.

Products like the Cardholder Dispute Resolution Network (CDRN) from Verifi can help keep contested transactions from becoming Visa disputes. Verifi CDRN gives you the power to ensure you never get caught off guard by another chargeback.

In this post, we explain how Verifi CDRN alerts work, why there are multiple networks, and how merchants can leverage this tool to their fullest advantage.

What Is the Verifi CDRN?

The Consumer Dispute Resolution Network (CDRN) is a chargeback prevention solution from Verifi, a Visa company. Like other alert products, Verifi CDRN alerts serve to warn merchants whenever a cardholder disputes a transaction. 

That advance notification gives the merchant a window in which to contact the customer directly, preventing a chargeback. All of this happens in near-real time, as opposed to the several days or weeks it might take to resolve a chargeback once it’s filed.

There are limitations, though. Verifi alerts only work with Visa chargebacks, and only if the issuer is part of the Consumer Dispute Resolution Network. That network includes roughly 1,000 banks, the majority of which are based primarily within the US. Responding to an alert also usually means you must refund the customer, regardless of whether or not the customer returns the merchandise.

Nevertheless, alerts are still well worth considering. While refunding the customer is not an ideal solution, it still has less of a negative impact than receiving a chargeback. 

How Do Verifi CDRN Alerts Work?

If the customer contacts the bank to inquire about (or dispute) the unrecognized transaction, it’s likely the bank will file a chargeback. Funds will be taken from the business’ merchant account and returned to the cardholder. 

If you’re enrolled in an alerts program, however, you have an opportunity to remedy the situation. Let’s take a closer look at how that works:

• The buyer receives their purchase, but is dissatisfied for whatever reason.
• The customer bypasses you and contacts the issuing bank to dispute the charge.
• The issuer, a member of the CDRN network, submits dispute details to Verifi.
• You receive an alert, notifying you of the pending chargeback.

Now, the ball is in your court. Once you’ve been notified, you have two options: agree with the dispute and refund the customer, or leave it alone and let it become a chargeback. In most cases, you’ll have 72 hours in which to determine how to proceed. Of course, the only reason to intentionally allow the chargeback to proceed is if the customer is in the wrong, and you intend to challenge the claim.

Benefits of Using Verifi CDRN Alerts

Since Visa disputes happen post-transaction, they are very hard to anticipate. That said,  Verifi’s advance warning lets you insulate yourself against losses while attempting to pinpoint and correct recurring issues. Of course, that’s just one benefit they offer.

Alerts from Verifi also allow you to:

• Avoid Chargeback Fees: Merchants must pay chargeback fees for each chargeback. Alerts allow you to save funds that would otherwise be lost to these fees.
• Lower Your Chargeback Rate: You could see serious consequences if your chargeback rate exceeds allowable limits. Alerts ensure that this doesn’t happen.

• Protect Your Account: Crossing the chargeback rate threshold is bad. Failure to address the situation could lead your acquirer to terminate your merchant account.
• Save Resources: Challenging invalid chargebacks on a case-by-case basis diverts staff and other resources from your core business.
• Protect Your Reputation: Uncontrolled chargebacks on your record can affect your reputation in the eyes of customers, and make you seem like a risk to banks.
• Avoid False Positives: All chargeback alerts are tied to a pending chargeback that’s already in progress. There’s no risk that the network will flag transactions by accident.
• Prevent Order Loss: Some alerts may arrive before you complete fulfillment. If so, you may be able to stop fulfillment, refund the buyer and keep the merchandise.
• Reduce Future Fraud: Data and statistics from flagged transactions can be analyzed to fine-tune fraud screening programs and identify recurring problems.
• Improve Customer Satisfaction: Customers will see their issue resolved much faster through a refund than a chargeback.
• Allocate Staff More Effectively: Take some of the burden of chargeback management off your staff and let them refocus their energy on growing your business.

Combining CDRN with Order Insight

Verifi CDRN alerts can deliver all the benefits outlined above. If you’re interested in boosting those results, however, you can augment the effectiveness of Verifi alerts by also making use of Order Insight.

Order Insight allows you to share transaction data to resolve claims in real time. However, it works by making additional customer, merchant, shipping, and other order information available to all parties in the event of a cardholder inquiry.

In many cases, the additional information provided could prove enough to remedy the cardholder’s inquiry, potentially stopping the claim from progressing to a Visa dispute.

Learn more about Order Insight

Other tools, like Rapid Dispute Resolution, help automate the dispute prevention process. RDR is activated when an inquiry is initiated from a bank within Visa’s network. With RDR, however, you have the ability to preset parameters for automatic refunds.

For example, you may have concluded that disputes valued at $10 or less are not worth fighting, and should always be refunded. Rather than being notified to check such cases, RDR will automatically refund the customer, saving you time and resources.

Learn more about Rapid Dispute Resolution

Is Verifi the Only Company That Provides Alerts?

No. There are two major providers of chargeback alerts, including Verifi (owned by Visa) and Ethoca (a Mastercard company), which offer Ethoca Alerts. 

Given their parent companies, it’s no surprise that Ethoca is focused on Mastercard disputes, while Verifi addresses Visa claims. Verifi has a smaller network of issuers; around 1,000 banks, compared to Ethoca’s 5,000 banks. However, most issuers in the Verifi network are US-based.

Another consideration is how the two products deal with matching claims to merchant billing descriptors. Either program will send notifications based on “exact match,” but  Ethoca looks for descriptors that begin with a certain phrase. In contrast, Verifi’s secondary search method is a registered phone number.

Pricing for Ethoca Alerts and Verifi CDRN are comparable. However, details may vary by business, especially when not working with a third-party facilitator.

Another consideration is how the two products deal with matching claims to merchant billing descriptors. Either program will send notifications based on “exact match,” but Verifi’s secondary search method is a registered phone number, whereas Ethoca looks for descriptors that begin with a certain phrase.

How to Get Started with Verifi CDRN

If you’re looking to get the most out of Verifi CDRN, you’ll first need to analyze your needs.

It’s possible to work directly with Verifi to receive alerts. However, most merchants find it more time- and cost-efficient to work with outside experts. The right platform can consolidate programs to deliver the widest protection coverage and highest cost efficiency while maintaining ease of use.

Expert facilitators such as Chargebacks911® can offer alerts from both networks and provide more comprehensive coverage. You’ll enjoy:

• More effective protection created by combining both primary alerts networks with exclusive Cb911 relationships.
• Simplified operation, with all tools and navigation being accessible from a single, easy-to-use dashboard.
• Automated processes that deliver more accurate results by lowering the odds of human error.
• No limits or quotas, which might be encountered when working directly with the alerts providers.
• User-friendly reporting based on extensive data collection and analysis, again accessed through the main dashboard.
• No double payments: in the case of redundant alerts, duplicates will be refunded.

Is the Verifi Alerts Network the Solution for Chargebacks?

Yes and no.

Verifi Alerts are a great stop-gap measure to reduce dispute issuances in a short period of time, but there are caveats. Verifi alerts weren’t designed to address why a chargeback was issued in the first place. They also can’t prevent lost sales revenue and merchandise resulting from Visa disputes. And while still considerably cheaper than a chargeback, alerts still come with a price tag.

Chargebacks911® has a wealth of experience-based knowledge and expertise in providing cost-effective prevention and risk mitigation strategies. Our experts can help you discover the true sources of all your chargebacks, and implement an end-to-end management strategy to retain revenue and prevent future disputes. Contact us today to learn more.