Chargeback alerts (Ethoca, Verifi CDRN and RDR): how they work and when to refund
By Zevron · 2 min read · Updated
How alerts work
When a cardholder tells their bank they dispute a charge, the network or an alert provider can notify the merchant before the chargeback is created. You then have a short window to act, usually 24 to 72 hours.
| Service | What it does |
|---|---|
| Ethoca alerts | Notifies you of a dispute or fraud report so you can refund before a chargeback. |
| Verifi CDRN | Cardholder Dispute Resolution Network: an alert you act on within the window. |
| Verifi RDR | Rapid Dispute Resolution: disputes can be refunded automatically by rules you set, before they become chargebacks. |
| Stripe early fraud warnings | Stripe’s warning that an issuer has flagged a charge as fraud. See Stripe early fraud warnings. |
Availability, windows and pricing differ by service and processor, and alerts usually carry a fee per alert. Check your processor’s terms.
What you gain
- The chargeback never happens, so it doesn’t count against your dispute ratio.
- No dispute fee.
- No time spent assembling a response.
The trade-off, and a refund limit
Refunding every alert also refunds disputes you could have won. A subscription brand with strong records on a small renewal may be better off fighting; a large order with thin evidence is better off refunded.
A practical approach: auto-refund alerts at or below an amount you’re comfortable losing, and review the rest. Zevron does this for you: you set an auto-refund limit, alerts at or under it are refunded at once, and larger ones wait for you to choose between refunding and letting it go to dispute.
Alerts and prevention work together
Alerts catch what slips through. Prevention reduces what reaches them: reminders, a clear descriptor and an easy cancellation flow. See how to reduce chargebacks.
Questions
What is a chargeback alert?
A warning that a cardholder has contacted their bank about a charge, sent before the chargeback is filed so you can refund and stop it.
How long do I have to act on an alert?
Usually 24 to 72 hours, depending on the service.
What is the difference between Ethoca, CDRN and RDR?
Ethoca and CDRN notify you so you can refund. RDR can refund automatically based on rules you set.
Should I refund every alert?
Not necessarily. Auto-refund small amounts and review larger ones, so you don’t refund disputes you could win.