What Is Visa RDR – Rapid Dispute Resolution?

Sick of dealing with chargebacks that never seem to end? Visa’s Rapid Dispute Resolution (RDR) may be the solution you’ve been looking for. At CB-ALERT, we are proud partners of Verifi and resellers of Visa RDR.

Visa RDR is a tool that allows you to issue automatic refunds based on customizable rulesets, reducing the financial burden of chargebacks and improving customer satisfaction. With a high adoption rate among global issuers, RDR has proven to be a powerful tool in preventing chargebacks.

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Its customizable filters allow you to tailor the rulesets to fit the unique needs of your business, stopping up to 90% of Visa chargebacks. In this article, we will explore the features and benefits of RDR, how it fits into a comprehensive chargeback management strategy, and how you can get started with implementing RDR for your business.

So, let’s dive in and learn more about how RDR can help protect your business from chargebacks.

Key Takeaways

  • RDR is a fast, efficient, and cost-effective system for resolving disputes offered by Visa.
  • Merchants can use RDR to prevent chargebacks by refunding disputed transactions based on pre-set criteria they choose.
  • RDR can stop up to 90% of Visa chargebacks 
  • Visa RDR should be used with other prevention tools for maximum protection, and CB-ALERT offers RDR as part of a complete chargeback management strategy.

What Is RDR By Visa?

rdr benefits

Rapid Dispute Resolution (RDR) is an advanced solution offered by Verifi that serves as an upgrade to Visa’s previous chargeback resolution platform, the Chargeback Dispute Resolution Network (CDRN), which is still available for merchants who need to transition to RDR. 

When implementing RDR, merchants establish rules specifying the disputes they prefer to accept and refund. Whenever disputes align with these predefined rules, RDR seamlessly coordinates with the acquiring bank to automatically debit the merchant’s account and provide a refund, effectively preventing the dispute from escalating into a chargeback.

When partnering with CB-ALERT, we will help you define the rulesets so that you aren’t just aimlessly refunding every customer. 

The main hangup merchants have with RDR is that it automatically refunds customers based on their rules. It’s important to remember that keeping customers happy and issuing a refund always beats a chargeback.

  1. Chargebacks incur additional fees and overhead costs, exceeding the original transaction amount.
  2. Engaging in chargeback representment requires resources and effort without guaranteed success.
  3. Accumulating chargebacks raises your chargeback rate, posing significant repercussions such as potential termination by your payment processor.

Although it’s advisable to blacklist customers suspected of friendly fraud, regardless of refunding through RDR, there are cases where customers genuinely encounter issues but choose an inappropriate channel to address them.

For these customers, receiving an immediate refund when they attempt to resolve the problem will improve their perception of your service and potentially result in future purchases and a positive word-of-mouth reputation. 

How Does Visa Rapid Dispute Resolution Work?

The merchant’s default response in Rapid Dispute Resolution (RDR) is to assume liability for the dispute on behalf of the merchant and provide a refund to the cardholder. 

The rules aim to determine which disputes can progress to chargebacks, allowing the merchant to contest them and recover the revenue. While a merchant who refunds every dispute using RDR may have a remarkably low chargeback rate, they also risk significant financial loss due to friendly fraudsters.

Here’s an alternative explanation of how Rapid Dispute Resolution works:

Under RDR, when a merchant is enrolled, disputes are handled differently by issuing banks. Instead of immediately initiating chargebacks for disputes, there are two distinct approaches depending on whether the card belongs to the Visa network or another brand.

The process allows the merchant up to 72 hours for disputes involving non-Visa cards to respond. RDR notifies the merchant, who can resolve the dispute by issuing a refund or accepting the chargeback.

However, when RDR receives a dispute related to a Visa card transaction, it consults the ruleset provided by the merchant. Merchants can define their rules for automatic refunds based on various transaction data elements, including transaction amount, date, product identifier, dispute category, chargeback reason code, currency code, authorization date and time, and issuer’s bank identification number.

The acquiring bank immediately credits the issuer if the merchant responds with an “accept” decision. On the other hand, a “decline” decision allows the dispute to progress to the chargeback phase.

When RDR initiates an automatic refund through the merchant’s acquiring bank, Visa guarantees that the dispute has been resolved and no chargeback will follow, protecting the merchant.

RDR Process how it works

RDR Data Flow:

  1. A transaction inquiry request specifies the search criteria to locate the transaction.
  2. Transaction summary information is retrieved based on the search criteria.
  3. The issuer selects a disputed category (Fraud, Authorization, Consumer, or Processing).
  4. Visa returns an ATR flag of ‘TRUE,’ indicating that Order Insight (OI) details are available for review.
  5. If the seller participates, the issuer sends an ATR request to retrieve OI details.
  6. Verifi is contacted by VROL (Visa Resolve Online) to obtain OI details when the seller is participating.
  7. The ATR response is enhanced to include additional purchase details for review.
  8. The issuer reviews the associated transaction and additional purchase details with the cardholder (CH) to further evaluate the dispute.
  9. If the CH wishes to proceed with the dispute, the issuer submits a dispute questionnaire.
  10. If the transaction is eligible for RDR, Verifi applies the seller’s predefined ‘Rules’ for an automated decision. The seller responds to the request for credit.
  11. VROL returns a response indicating a successful questionnaire submission.
  12. VROL routes the dispute questionnaire and TC15 (Visa’s Transaction Category Code 15) to the acquirer, which withdraws funds from the seller. Standard funds clearing and settlement occur.

Best Way To Implement Visa RDR – Use CB-ALERT

For a seamless implementation of Rapid Dispute Resolution, merchants can consider using CB-ALERT, a chargeback management software that offers RDR as part of a complete chargeback defense strategy.

CB-ALERT can help merchants set up customizable filters for RDR, ensuring that automatic refunds are issued only for transactions that meet pre-set criteria. In addition, CB-ALERT provides insights and support for RDR and other chargeback solutions, allowing merchants to make informed decisions about their chargeback prevention strategy.

By using CB-ALERT to implement RDR, merchants can reduce the time and cost associated with chargeback management. CB-ALERT’s team of experts can explain how RDR fits into a complete chargeback defense strategy and guide how to customize filters for maximum effectiveness.

Merchants can also sign up for a demo of CB-ALERT to learn more about RDR and other chargeback solutions. CB-ALERT is necessary for businesses looking to prevent chargebacks and protect their bottom line.

Benefits Of RDR

You’ll love the benefits of Rapid Dispute Resolution (RDR) as it simplifies the chargeback process and prevents financial loss for your business. 

In addition to its cost-saving benefits, RDR can help merchants avoid lengthy and costly chargeback processes. With customizable filters and a high adoption rate among global issuers, RDR can stop about 90% of Visa chargebacks.

By resolving cases that meet pre-set criteria automatically, RDR ensures merchants don’t waste time fighting chargebacks they are likely to lose. 

Use RDR With Order Insight & Verifi Alerts

Use Rapid Dispute Resolution (RDR) with Order Insight and Verifi alerts to maximize your chargeback prevention strategy. By doing so, you can ensure you’re notified of potential disputes before they turn into chargebacks.

This combination of tools allows you to proactively address issues and prevent chargebacks from occurring, saving you time and money in the long run.

Order Insight is a tool that gives merchants greater visibility into their transactions. It allows you to see more detailed information about each transaction, including the reason for the purchase and any special instructions from the customer.

This information can help you identify potential disputes before they happen and take appropriate action to prevent chargebacks.

Verifi alerts are another tool that can be used in conjunction with RDR. Verifi is a chargeback prevention and management service that provides merchants with real-time alerts when a customer initiates a chargeback.

By using Verifi with RDR, you can quickly respond to potential disputes and issue refunds before they turn into chargebacks. This can help you avoid the costs associated with chargebacks, such as lost revenue and increased processing fees.

How To Get Started With RDR

To start with Rapid Dispute Resolution (RDR), you must enroll in the program. Once enrolled, you can set your own rules for automatic refunds based on transaction data.

Get Enrolled

Enrolling in Visa’s Rapid Dispute Resolution (RDR) system is essential for merchants who want to prevent chargebacks and protect their business. To get started with RDR, contact us, and we can assist and speed up the enrollment process.

Set Your Rules

Setting up a customized ruleset is key to ensuring that automatic refunds are processed according to your specific needs and preferences.

You should analyze your transaction data to identify common dispute scenarios and develop rules that address those situations. Additionally, you should consider your customers’ preferences and ensure that your rules align with their expectations.

By setting up a customized ruleset, you can maximize the effectiveness of RDR and prevent chargebacks before they occur.

Start Resolving Disputes

Now that you’ve got your customized ruleset in place, it’s time to start using Rapid Dispute Resolution (RDR) to resolve disputes quickly and efficiently. RDR is a crucial tool for protecting your business and staying competitive. It enables you to respond to disputes within 24 hours, preventing chargebacks and avoiding lengthy and costly chargeback processes.

Reconciliation/Analyze Your Data

Analyzing data via CB-ALERT is critical for understanding why chargebacks are occurring.

Look for patterns in the data, such as specific products or services that are frequently disputed. You can also analyze the reasons for chargebacks and identify the root cause of the dispute. This information can help you change your business practices and prevent future chargebacks.

Once you have analyzed your data, use it to update your ruleset for RDR. Customize your filters to ensure that only valid disputes are refunded while also ensuring that legitimate disputes are resolved quickly.

Regularly monitor your refund rates after implementing RDR, and make adjustments to your ruleset as needed. By continuously analyzing your data and refining your ruleset, you can maximize the benefits of RDR and reduce the time and cost associated with chargeback management.

Are There Any Setbacks When Using RDR?

Despite its high adoption rates, some banks may still need to opt into RDR, and reporting difficulties may cause RDR cases to be counted as chargebacks. This can confuse merchants who may believe they have more chargebacks than they do. 

Another potential setback of using RDR is that it may only catch some chargebacks. While RDR can prevent up to 90% of Visa chargebacks, it’s not foolproof. Merchants should still be vigilant in monitoring their transactions and analyzing chargeback data to identify any potential issues. 

The cost of RDR may be a concern for some merchants. Pricing is assessed on a per-case basis, which can add up if a merchant is experiencing a high volume of chargebacks. However, the benefits of RDR in terms of time and cost savings may outweigh the cost of implementation.

Can Merchants Customize RDR Rules?

You have the power to tailor RDR rules to fit your unique business needs. This means you can create filters determining which transactions should be refunded and set up automatic refunds for some instances.

For example, you can automatically refund small transactions to avoid the cost of fighting chargebacks. Or you can offer automatic refunds to customers with a history of making legitimate claims. Setting up these rules allows you to streamline your refund process and improve customer satisfaction.

Customizing RDR rules is essential in creating a comprehensive chargeback defense strategy. With RDR, you can prevent chargebacks and protect your business from financial burdens. 

Do All Issuing Banks Participate In RDR?

While many global issuers participate in RDR, not all banks have adopted it as of 2024.

If an issuer doesn’t participate in RDR, all disputes will become chargebacks (regardless of the refund rules you have in place). 

Visa estimates that issuer adoption covers over 97% of U.S. disputes and 83% of global disputes.

Choose CB-ALERT For Your RDR Implementation

Choose CB-ALERT to quickly implement and manage your customized Rapid Dispute Resolution ruleset for maximum chargeback prevention and protection. CB-ALERT is a chargeback management tool that helps merchants to monitor and prevent chargebacks.

CB-ALERT integrates seamlessly with Visa’s Rapid Dispute Resolution system, allowing merchants to customize their ruleset for automatic refunds. 

Please fill out the application below to find out what CB-ALERT can do for you when it comes to RDR.

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