The Dreaded Credit Card Chargeback

Every business owner dreads receiving these ominous letters in the mail – those nasty credit card chargeback fee notices.

It is a well-known fact in the industry that merchants rarely come out on top, as card companies almost always side with cardholders, even in the most absurd situations. Unfortunately, according to a recent Wall Street Journal article, this trend is not expected to improve any time soon.

Published on June 19, 2024, the article bears the unsettling title, “Reversing a Credit Card Charge Has Never Been Easier – Or More Abused.” The subtitle, “Shoppers Dispute Millions in Credit Card Charges. They Usually Win,” further emphasizes the uphill battle faced by merchants in these situations.

Especially bad for the Outdoor Hospitality Industry, the Wall Street Journal reports, “No-show and late fees charged by merchants are a common source of credit-card disputes, said Christopher Elliott, founder of Elliott.org, a consumer-rights nonprofit.” For us, this means we held a site or rental based on a good-faith deposit, only to have a guest pull a, “No Show,” and be rewarded with a refund from their credit card company.

Sadly, the article offered very little in the way of helpful tips on how to combat this problem. However, industry experts advise the following to reduce your risk:

• Offer clear communication and repeat your policies often on your booking confirmations, website, and rules and regulations pages
• Collect signatures via e-signature or hard copies
• Black list repeat offenders-use your reservation software to block abusing guests from returning
• Resolve disputes early and give where you are truly at fault
• Ensure you are collecting all data via PCI-compliant methods

Though no guarantee, the above steps may help you stay a step ahead of those pesky chargebacks.