Should every alert be refunded?

Not always. With RDR, the merchant's rules decide automatically which claims are accepted. With CDRN and Ethoca alerts, the team can check whether the item shipped or the subscription was cancelled before refunding. Refunding is usually cheaper than a chargeback, but the decision stays with the merchant.

Automatic and manual alerts

With RDR, the merchant sets rules in advance, for example refund every claim under $25 or every claim with a fraud reason code, and Visa applies them without a human step. With CDRN and Ethoca alerts, a person decides within the window, usually 72 hours for CDRN.

When to refund

• Small amounts, where the fee of a chargeback would exceed the order.
• Fraud reason codes on digital goods, which merchants rarely win.
• Orders not yet shipped, where cancelling costs nothing.

When to check first

• High-value physical goods already delivered with proof of delivery.
• Subscriptions where the customer used the service after the disputed charge.
• Repeat claims from the same customer, which can signal first-party misuse.

The economics

A chargeback costs merchants about $128 on average in fees and internal work, and merchants win fewer than one dispute in five. Refunding through an alert is usually the cheaper outcome, but not always, which is why the decision stays with the merchant for manual alerts and with its rules for RDR.