Can Verifi CDRN Alerts Help Reduce Chargebacks?

Chargebacks can hurt businesses a lot. They cost money, take up significant time, and potentially damage a business’ reputation to a point where a merchant can lose their license. Therefore, for any merchant, doing whatever is possible to reduce the number of such claims is very important.

Most of the time, it’s possible by providing excellent customer service, offering refund options, keeping in touch, and using secure payment protocols. However, there are still occasions when a consumer goes straight to their bank and illegitimately disputes a transaction, which can lead to a chargeback.

To prevent this from happening, you can use chargeback prevention alerts, as these provide the opportunity for your company to resolve a customer’s issue directly and quickly. One such service is Verifi, which offers notifications to merchants whenever a customer files a dispute. This guide will help you understand what this service is, what it offers, how it can help you secure your ROI and more.

What Is the CDRN?

The CDRN stands for Cardholder Dispute Resolution Network and is a service provided by Verifi, a leading provider of chargeback prevention and dispute resolution solutions. Verifi CDRN is designed to help merchants manage and resolve transaction disputes and chargebacks more effectively.

CDRN operates as a comprehensive platform that allows merchants to receive and respond to chargebacks in real time. When a customer initiates a chargeback, Verifi CDRN provides the merchant with a notification containing detailed information about the dispute. This includes the reason for the chargeback, transaction details, and any supporting documentation provided by the customer’s bank.

What are Verifi CDRN Alerts?

Verifi is a company founded in 2005 and based in LA. Verifi CDRN (Chargeback Dispute Resolution Network) brings together various issuing banks to help merchants prevent and fight illegitimate payment disputes. Here’s how Verifi CDRN alerts work:

• A customer contacts their bank to dispute a transaction they made to buy your product or service.
• The bank considers their claim and starts the process of initiating a chargeback.
• Verifi CDRN receives an almost instant notification that a new dispute case has been opened against a merchant using Verifi CDRN alerts.
• The merchant is contacted right away and is given 72 hours to try and directly resolve whatever the customer’s issue is.

Verifi CDRN alerts lead to the freezing of the chargeback process for 72 hours. That gives your company plenty of time to fix whatever the problem is. If their claim is genuine, you might end up providing the customer with a refund or a replacement product. Otherwise, you can decide to fight the claim with your evidence if it seems like fraud.

What are the Benefits of Verifi Refund Notifications?

When you enable Verifi CDRN alerts and start getting Verifi refund notifications, you can enjoy the following benefits:

• You can contact the customer and clarify their issues with your product or service. You might have to send them a direct refund to solve the problem. Just make sure they retract their claim with the issuing bank before you do so. This means that with Verifi CDRN, you can avoid chargeback and additional fees.
• When you avoid a dispute, your company’s reputation remains intact, and your chargeback ratio remains low. A high ratio can sometimes lead to the revocation of your merchant license, so keeping it as low as possible is vital.
• In the case of friendly fraud, you get enough time to gather all the evidence you need to fight the claim and hopefully win the case.

Verifi refund notifications allow you to solve the problem proactively. Even if you end up sending the money back to the customer, you save a lot more with Verifi CDRN than you’d have to pay otherwise. That is why it’s essential for anyone wanting to avoid the extra cost of payment disputes to utilize Verifi refund notifications.

Is Verifi the Only Company Providing such Notices?

There is another large service with a similar network of issuing banks that offers the same notifications. Known as Ethoca, this company is based in Canada and works mainly with banks based in Asia, Europe, and Canada. Verifi, on the other hand, primarily supports US banks. Both these networks overlap with one another quite a bit, though.

If you sign up with both Ethoca and Verifi, your chances of getting alerts are much higher because you can access an extensive network of banks. On the other hand, this also means that you might pay double the amount and get duplicate notifications whenever a bank falls inside these services’ networks.

Why Let a Chargeback Management Company Process Warnings for You?

There are many reasons why hiring a dispute management company is a good idea if you face too many customer claims. Here are some of the main ones:

• A company that is an authorized reseller of Ethoca and/or Verifi CDRN programs will give you a complete chargeback prevention solution.
• You may not have to pay more fees than you would pay directly to an alert network. This will essentially give you much more value for the same amount you’d be paying anyway for alerts.
• You will be granted access to a unified portal that lays out everything regarding disputes in front of you without you having to log into multiple platforms to view your alerts.

What Percentage of Chargebacks Can CDRN Alerts Prevent?

On average, you can expect to avoid/resolve a little less than half (around 41%) of the claims made by customers when dealing with digital goods. However, with physical products, this number falls to about 21%. CDRN alerts can prevent up to 40% of chargebacks! The effectiveness of CDRN alters depends on the:

• The provider you select – Verifi tends to be the most reliable.
• The type of goods and services you sell – Digital goods have the highest chargeback prevention rate.
• Location of buyer’s bank – CDRN alerts are most effective when the customer’s bank is based in the US.
• Transaction volume – The more transactions you process the more effective CDRN alerts become.
• Years in business – The longer your business has been in operation the more likely that CDRN alerts are able to stop chargebacks.

Here is how Verifi CDRN Alerts and Ethoca Alerts stack up against one another and their chargeback prevention percentage across different products:

If you sell digital goods then it makes sense to use Verifi as they have a big edge over Ethoca in terms of chargeback prevention percentage. However, if you are in the digital services business, then partnering with Ethoca Alerts can save a ton in chargeback fees.

What do I Need to Get Started with a Preventive Alert Network?

Other than some basic financial information, your preventive alert network requires access to your sales system to help resolve issues. Because of such an easy process, there’s no hassle that you have to deal with to start getting alerts that can help your business a lot in the long run.

To get started with a preventive alert network, you will typically need the following information and access:

• Business/Merchant Name: Provide the legal name or registered name of your business. This ensures proper identification and association of your business with the preventive alert network.
• Registered Address of the Business: Provide the official address registered for your business. This helps in establishing the location and contact details for your business within the preventive alert network.
• Merchant Descriptor: The merchant descriptor is the name that appears on customers’ credit card statements when they make a purchase from your business. Ensure you have a clear and recognizable merchant descriptor that accurately represents your business.
• Merchant Account Number: Your merchant account number is a unique identifier assigned to your business’s payment processing account. It helps link your transactions and business profile within the preventive alert network.
• Access to Your Sales System: You will need access to your sales system or payment processing platform to integrate it with the preventive alert network. This allows the network to monitor and analyze your transactions in real-time to identify potential risks or fraudulent activities.

Additionally, depending on the specific preventive alert network you are using, there may be additional requirements or documentation needed. It’s best to consult with the provider of the preventive alert network to understand their specific onboarding process and any additional information they may require.

Verifi CDRN Alerts vs. Ethoca Alerts

Verifi CDRN Alerts and Ethoca Alerts are both services designed to help merchants detect and manage potential chargebacks or disputes. They provide real-time notifications to merchants when a customer initiates a chargeback and integrate with the merchant’s payment processing system and monitor transaction data to identify potential chargebacks. Here is a look at some of the key similarities and differences between Verifi CDRN Alerts and Ethoca Alerts.

Similarities:

• Both Verifi and Ethoca work with a wide array of card issuers and can significantly reduce the number of chargebacks you receive.
• Verifi and Ethoca only send chargeback alerts from a card issuer that is a member of their network.
• Merchants have up to 72 hours to respond to an alert from Verifi or Ethoca and if the merchant doesn’t act then the dispute will progress to a chargeback.
• Verifi and Ethoca have a $40 fee per alert.

Differences:

• Verifi has a much larger presence in the United States.
• Ethoca’s network is more entrenched across financial institutions in Canada, Asia, and Europe. 
• Ethoca does not provide reason codes, while Verifi does
• Verifi is more effective at preventing chargebacks for digital goods
• Ethoca is more effective at preventing chargebacks for digital services
• Ethoca is partnered with Mastercard, while Verifi is partnered with Visa

Use Chargebackhit to Deal with Payment Disputes

Chargebackhit is a service that offers Verifi CDRN and Ethoca’s network coverage to give merchants the peace of mind they need to focus on running their business. We will take care of all your needs when it comes to preventing, resolving, and fighting payment claims.

The first step is to try and prevent such claims from taking place via Consumer Clarity and Order Insight. If such an issue arises, our service will get the relevant notification via an alert network and follow up with the issuing bank accordingly.

In case of fighting a claim, we will also help you build a strong and evidence-backed response to help you win against fraudulent cases. Utilizing CDRN, RDR, and other tools, we even offer automatic dispute resolution without the need for your involvement.

So, if you want to let the professionals take over your chargeback prevention needs, get in touch with Chargebackhit. Learn more about our products and services, and let us work on your behalf to save your ROI and enhance your business’ reputation.