Dealing with credit card chargeback fee notices is a nightmare for every business owner. It’s no secret that merchants often lose chargeback disputes, as card companies tend to side with cardholders, even in situations that seem unreasonable. Unfortunately, a recent Wall Street Journal article highlights that this trend is unlikely to change anytime soon.
Published on June 19, 2024, the article, titled “Reversing a Credit Card Charge Has Never Been Easier – Or More Abused,” sheds light on the struggles businesses face. The subtitle, “Shoppers Dispute Millions in Credit Card Charges. They Usually Win,” further underscores the challenges merchants encounter when dealing with chargebacks.
For the Outdoor Hospitality Industry, this issue is especially concerning. The Wall Street Journal reports that “No-show and late fees charged by merchants are a common source of credit-card disputes,” according to Christopher Elliott, founder of Elliott.org, a consumer-rights nonprofit. For businesses in this sector, this means that a guest who books a site or rental with a good-faith deposit and then doesn’t show up may still receive a refund through their credit card company.
While the article offers limited advice on how to prevent this issue, experts recommend these steps to reduce chargeback risks:
- Clearly communicate policies and repeat them on booking confirmations, your website, and rules and regulations pages.
- Collect signatures via e-signature or physical copies to ensure agreements are documented.
- Use reservation software to block repeat offenders from making future bookings.
- Resolve disputes promptly and acknowledge fault where applicable.
- Collect all data using PCI-compliant methods to ensure secure transactions.
Although these steps aren’t a foolproof solution, they may help mitigate the risk of chargebacks and protect your business.
