Tying CDs onto a peach tree is a visual scare tactic for birds. The CDs are light enough to move in the wind and the bottom surface is reflective. It is the same principle used for hanging Mylar tape, aluminum pans or strips of foil in a tree. It is unclear exactly why they work, but birds tend to scare easily when in flight. They might think the movement or reflection is a predator or don't know what it is and decide to keep their distance.
Hanging CDs can work initially, but they aren't effective over the long term. Within a week, birds can become accustomed to the CDs and will stop being frightened by them. They also won't work in areas with heavy vegetation or on cloudy days with no sunlight. Moving the CDs around every few days may help extend their usefulness, but even that won't work forever. Scare tactics need to be altered frequently to keep the birds away.
Visual scare tactics work best when combined with auditory scare tactics. Auditory scare tactics include recorded bird distress calls and loud noises like firecrackers, cannons and bird bombs. The sounds should be played at irregular intervals. Like the visual scare tactics, auditory devices should be moved around and/or changed about once a week or they will lose their effectiveness. They also don't need to be played at night since birds that damage fruit trees are not nocturnal.
Placing netting over peach trees is a more effective strategy for keeping birds away, according to Robert Pierce, an extension wildlife specialist with the University of Missouri. Although netting is expensive upfront, the netting can be taken down and reused for several years. Chemical repellents like methyl anthranilate or methiocarb are another option, but not as effective as netting and not always available for use on peaches.