CDRN vs RDR: Which is best for merchants?
Chargebacks are an expensive and frustrating challenge for merchants. When a customer disputes a transaction, it’s often the merchant that loses out through revenue loss, processing fees, and penalties from card networks or acquirers.
While there’s unfortunately no foolproof way to completely avoid this, chargeback prevention solutions can help merchants address disputes before they escalate. Two such solutions are the Chargeback Dispute Resolution Network (CDRN) and Rapid Dispute Resolution.
Both CDRN and Rapid Dispute Resolution are administered by Visa subsidiary Verifi, but they’re quite different from one another in terms of factors like cost, efficiency, coverage, and the amount of manual intervention required by merchants. But which is the better of the two? We’re going to look at both in detail and explain why it’s Rapid Dispute Resolution, not CDRN, that merchants should be looking to adopt.
What is Verifi CDRN?
Verifi CDRN is a chargeback prevention system designed to notify merchants of disputes before they escalate into chargebacks. When a cardholder contacts their issuing bank to dispute a transaction, CDRN gives the merchant 72 hours to resolve the situation before the dispute escalates to a formal (and costly) chargeback.
What this resolution looks like depends on the situation. If it’s a legitimate dispute then the only possible resolution is a refund. If there’s more than meets the eye, however, CDRN provides merchants with a valuable window to gather evidence and put forward a case for rejecting the dispute. The idea here is to reduce chargeback rates by giving merchants sufficient warning of disputes—and by extension, helping them avoid fees, penalties, and processing restrictions.
CDRN is administered by Verifi, a Visa subsidiary, and is primarily designed for Visa transactions. While it also supports Mastercard, American Express, and Discover, its coverage outside of Visa is limited.
How does CDRN work?
Think of Verifi CDRN as an early warning system that helps merchants address disputes before they escalate into chargebacks. Here’s how it works:
1. The customer raises a dispute — This is usually done when the customer contacts their bank and alleges a problem such as fraud, an unauthorised transaction, or that the product or service they’ve paid for isn’t as described.
2. A CDRN alert is sent — If the customer’s bank participates in Verifi’s CDRN program, it submits the dispute details to the CDRN system instead of immediately filing a chargeback. The system then sends an alert to the merchant who receives it via Verifi’s platform.
3. The merchant responds — Once an alert has been received, the merchant has 72 hours to respond by taking one of the following actions:
- Issuing a refund to prevent the chargeback from being processed.
- Contact the customer directly to resolve the dispute.
- Providing supporting evidence to challenge the dispute, such as proof of delivery or transaction records.
After the 72-hour window, unresolved disputes automatically proceed to the chargeback stage, leading to fees and potential penalties. For merchants processing a high volume of transactions, manually managing CDRN alerts can be time-consuming and costly, making automated solutions like Rapid Dispute Resolution a more scalable option. We’ll explore this in more detail later.
CDRN is good in theory, but it’s quickly becoming irrelevant
Although CDRN’s early dispute notification can be a valuable resource for merchants dealing with more chargebacks, the tool has several drawbacks. The system requires manual intervention, meaning merchants must actively monitor alerts and respond within 72 hours. This can be a challenge for businesses handling a high volume of transactions, as failing to respond in time means the dispute becomes a chargeback anyway.
CDRN is also expensive, with fees of around $35 per alert. This can add up quickly for businesses receiving frequent dispute notifications. Coverage limitations further reduce CDRN’s effectiveness. It applies to only about 50% of Visa transactions, with minimal support for Mastercard, American Express, and Discover. Additionally, only U.S.-based issuers participate in the program, making CDRN ineffective for merchants operating internationally.
These factors mean that CDRN is seeing less adoption over time. This, coupled with the fact that updates to CDRN are being scaled back and Visa continues to push alternatives like Rapid Dispute Resolution, means that CDRN is quickly becoming irrelevant and it could be phased out in the future as a result.
Why RDR is a better alternative to CDRN
While CDRN provides merchants with an opportunity to resolve disputes before they become chargebacks, Rapid Dispute Resolution (RDR) offers a more cost-effective, automated, and scalable solution. RDR eliminates the need for manual dispute management, providing a way for merchants to prevent chargebacks with minimal effort.
Cost-effectiveness
One of the biggest advantages of RDR is its lower cost structure. Unlike CDRN, which charges a flat fee of around $35 per alert, RDR’s fees are fixed at between $10-19 per alert. This makes it more affordable and flexible, with businesses using RDR experiencing a reduction in chargeback-related costs because disputes are resolved automatically. This eliminates administrative expenses and manual processing fees.
Efficiency and automation
RDR is a fully automated chargeback prevention tool, requiring no manual monitoring or intervention. Instead of merchants having to review and respond to alerts, RDR processes disputes in real time, issuing refunds or resolving claims instantly. This is a significant improvement over CDRN’s 72-hour response window, which demands constant oversight from merchants. By automating the process, RDR not only speeds up dispute resolution but also frees up resources that would otherwise be spent managing alerts.
Much broader coverage
Compared to CDRN, RDR offers far greater coverage. Approximately 99% of Visa disputes qualify for RDR, whereas CDRN covers only 50% of Visa transactions. Additionally, RDR works globally across 190+ countries, making it a far more practical solution for merchants operating in multiple markets. In contrast, CDRN is limited to U.S.-based issuers, restricting its usefulness for businesses with international customers.
No management needed
A major drawback of CDRN is that merchants must actively review alerts, decide on a course of action, and manually process refunds or evidence submissions. In contrast, RDR eliminates this burden. With RDR, payments are automatically refunded based on preset rules, thereby saving untold amounts of revenue in labor costs while simultaneously reducing the risk of missed alerts.
Do you need Verifi CDRN?
It’s our position at ChargebackStop that CDRN has no real benefit over RDR and, as a result, has very few—if any—real use cases. In virtually every scenario, RDR is going to be the ideal go-to for most merchants because it’s cheaper, automated, more reliable, and has much broader coverage. It does everything CDRN can do and more.
Although merchants who are currently integrated with Verifi CDRN may be reluctant to switch, they should think carefully about the value that they get from CDRN and look at how RDR could deliver more. For most businesses, the cost and operational burden of using CDRN make it a less practical solution.
Merchants looking for a simpler and more cost-effective chargeback prevention tool should explore ChargebackStop’s RDR solution. With automated dispute resolution and broader coverage, ChargebackStop RDR helps businesses reduce chargebacks without the high costs and manual effort required by CDRN. To learn more about how RDR can help reduce chargeback costs and improve dispute management, schedule a call with our team.
