Chargebacks Tips: Dealing with Natural Disasters
WE ARE HERE TO HELP EVERY STEP OF THE WAY
Ascent’s long experience in the lodging and vacation rental industry means we understand the difficult decisions our clients face when they’ve been affected by a natural disaster or emergency and we are here to help.
For example, for reservations that get cancelled, you are faced with deciding if you should issue refunds or brave potential chargebacks on reservations in which the guest didn’t or couldn’t stay.
You might consider proactively contacting your guests before they have a chance to initiate a chargeback.
- If you are issuing a refund, you can let the cardholder know
- Instead of a refund, some merchants offer a credit on a future stay
- If they are covered by Travel Insurance, reminding them of that might avoid a chargeback*
An independent study by Javelin Strategy and Research found that in more than 8 in 10 cases, contact between the consumer and merchant prevents a chargeback and helps keep a loyal customer. **
If you choose not to issue refunds for guests who didn’t or couldn’t stay, it’s possible that some will come through as chargebacks. It’s important to tailor your response to the reason code you receive. In cases of natural disasters, a common reason code received is Services Not Rendered.
If the guest did not stay and you want to fight Services Not Rendered chargebacks, the strongest response would generally include proof that the cardholder agreed to your cancellation policy at the time of payment and that they cancelled outside of that policy. If they booked online, it can be helpful to show that they had to “click to agree” to the cancellation policy in order to pay. It can also be helpful to provide a signed agreement with cardholder signature or initials within 1 inch of the cancellation policy.
If you receive a chargeback, our role is to leverage our knowledge in the credit card and vacation rental industries to support and guide you as best we can in fighting chargeback losses. The card companies have established regulations that both acquirers and issuers are required to abide by. Initially, the issuing bank, and ultimately the card companies, decide if a chargeback is reversed or not, per the card company regulations. Ascent can help you understand those regulations, so you can make informed decisions.
We can review your documentation to give you a better idea of how strong your chances are of fighting common chargeback reason codes. We are also here to help guide you in putting together the strongest verbiage and supporting documentation when you respond.
Let us know how we can help save you time and money. And stay safe!
* Please note that it is possible for a guest to collect on travel insurance AND dispute the transaction through the chargeback system.
**The Chargeback Triangle research report, May 2018, by Javelin Strategy and Research
Additional quotes worth noting from this study:
“When merchants are contacted by the cardholder about an issue before initiating a dispute, they report nearly overwhelming success in preventing the issue from becoming a chargeback. Only 16% of cases where accountholders reached out to the merchant first to resolve the dispute ultimately resulted in a chargeback being filed with the issuer”.
“Among merchants that track post-chargeback activity, 62% of consumers decrease their patronage after a dispute”.
If you have any questions, please contact support@ascentaymentsolutions.com.
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