How to deal with chargebacks

Chargebacks are a common but challenging part of managing payments, and understanding how to handle them effectively is crucial for your business. Whether the guest stayed at your property or not or the conditions of their stay, the key to successfully contesting a chargeback is to address the reason behind the chargeback claim. Here's what you need to know about handling chargebacks and what steps to take to respond effectively.

Focus on the Chargeback Reason

When dealing with a chargeback, it’s essential to focus on the reason given for the dispute. For example, if a transaction is disputed as fraudulent, proving that the guest stayed at the property will not suffice. The bank doesn't care whether the guest stayed - it only needs to verify that the cardholder authorized the transaction. You’ll need to provide supporting evidence that shows the cardholder approved the transaction. This could include signed registration forms or other documents demonstrating the cardholder’s authorization.

For all chargeback cases, it’s important to gather as much evidence as possible. This includes receipts, communications, and signatures. However, at the very least, you should provide documentation that directly addresses the reason for the chargeback.

If the chargeback reason doesn’t seem to apply (for example, a claim of “Subscription canceled” when hotels typically don't offer subscriptions), provide all the evidence you have, such as receipts, communication records, and signatures.

To strengthen your case, organize your evidence. For example, if you have multiple screenshots of communication with the guest, compile them into a single PDF file rather than uploading multiple individual files.

Cloudbeds' Role in Helping You Contest Chargebacks

When a chargeback or retrieval request occurs, Cloudbeds will notify you immediately. This notification will include the reason for the chargeback, the disputed amount, and the deadline for contesting the chargeback.

You can contest the chargeback through the Cloudbeds Payment Portal. All your evidence will be forwarded directly to the bank for review. We will also provide basic information about the reservation, such as stay dates and the reservation number, to assist with your case.

Please remember that while Cloudbeds assists in sending the necessary information to the bank, we do not control the outcome of chargebacks - the card-issuing bank ultimately makes this decision.

How to Deal with Specific Chargeback Categories

Providing the guest's signature and communication records is crucial for every chargeback, including fraudulent transactions or services not rendered. Here are specific steps for handling different types of chargebacks:

Fraudulent Transaction

For fraudulent chargebacks, the most important evidence to provide is the guest’s signed registration form or signed receipt. Any document that includes the cardholder's signature, personal details, and reservation details should be included. Also, all records of communication with the guest must be provided.

Remember, the bank does not care if the guest stayed at your property; they are only concerned with whether the cardholder authorized the transaction. If you are confident the transaction is fraudulent, it’s advisable not to contest the chargeback, as disputing a fraudulent charge can hurt your reputation with the card company over time.

Not as Described

If the cardholder disputes the service based on "not as described," you should provide a rebuttal letter addressing the cardholder's claim and any documentation showing the service was provided as described. If the service was not rendered as expected, attach a copy of your cancellation policy, terms and conditions, and the guest’s signature, if available.

Services Not Rendered

If the cardholder claims services were not rendered, provide supporting documents to prove the guest completed their stay, such as a signed registration form. If the guest did not stay, provide a rebuttal letter and any evidence showing why no refund is due, such as your cancellation policy or terms and conditions and the guest’s signature, if available.

Credit Not Processed

In the case of a chargeback related to credit not processed, provide evidence that the transaction was non-refundable. This can include a copy of your cancellation policy, terms and conditions, and the guest’s signature.

Any Other Reason or Generic Reasons

Submit a rebuttal letter for chargebacks with generic or unclear reasons and include any documentation proving the transaction was legitimate, non-refundable, and that the services were provided according to your cancellation policy and terms and conditions.