Chargebacks (also called disputes) are added costs that all merchants, in every industry, will incur as a result of accepting credit card payments. In this article, we’ll walk through the basics of the chargeback process, why they occur, and steps you can take to avoid them in the future.
The ability to dispute a payment is meant to protect consumers from unauthorized transactions, but it can also negatively impact your company’s bottom line. We understand that chargebacks can be frustrating, so our dedicated Fraud Prevention team is happy to provide built-in chargeback management to defend you against these claims.
What is a Chargeback?
A chargeback is initiated when a cardholder disputes a transaction with their credit card company (or issuing bank), resulting in a review of the original payment. Cardholders can dispute transactions for any reason, including, but not limited to:
- Booking was cancelled and refund was not issued
- Prepaid deposit was not applied to final bill
- Product was not received
- Product was unsatisfactory or not as described
- Incorrect amount or duplicate billing
- Cardholder doesn’t recognize the transaction
- Fraud - cardholder did not authorize the transaction or was a victim of identity theft
The Chargeback Process Explained
Here is an overview of how the chargeback process works:
- Step 1: A purchase occurs. All chargebacks start with a guest making a purchase either online, through a book via email link, or by your team completing a purchase on their behalf on dashboard.
- Step 2: Cardholder contacts their bank and initiates a chargeback after reviewing their bank statement and deciding that a charge is invalid.
- Step 3: Your team is notified of the dispute via email, and decides how you’d like to proceed. You can either accept the dispute (which will in turn refund the guest) or choose to challenge it by sending us any compelling documentation related to the transaction.
- Step 4: Tock compiles evidence supporting the validity of the charge and submits to the issuing bank on your behalf.
- Step 5: The issuing bank reviews the submitted evidence and decides whether or not the claim is unfounded. A decision is reached within 2-8 weeks, and your team is informed of the determination via email.
Responding to the Chargeback
When the chargeback is initiated, your team will be sent a notification via email. If your intent is to refund the guest, please let us know as action is required on our end to accept the dispute. Once your team receives the notice, this is your opportunity to prepare any evidence that you may have about the charge. You can send us this evidence by responding directly to the dispute notification email. Evidence can include:
- Email correspondence with the guest
- POS credit card receipts
- Photos of the guest on premises
- Anything noteworthy outside of the standard evidence listed below
Tock’s Fraud Prevention Team will compile the following evidence on your behalf:
- A PDF document summarizing the conditions of the booking process, reservation price, and transaction details
- Your business’ cancellation policy, Tock’s Terms of Use, and the Privacy Policy agreed to by the guest at time of purchase
- The guest’s reservation confirmation email and reminder email (if enabled)
- Relevant guest information such as their Tock profile, activity, receipt and history
Providing as much detail as possible will aid in the bank’s decision to settle the dispute in your favor. Tock will provide the exact wording in all policies agreed to when the guest made the purchase. If you have any questions or evidence outside of the items our team provides, please respond to the dispute notification email. We’ll update you once we have submitted evidence to contest the dispute.