How to prevent and manage chargebacks

A chargeback is when a traveller asks their bank or credit card provider to cancel their payment, usually due to a poor experience. While chargebacks are rare, they can occur after any credit card transaction. After a chargeback is initiated by a traveller directly with their credit card provider or bank, the deadline to dispute the request can be as soon as within 72 hours.    

With thousands of issuers and several credit card networks, the outcome of a dispute can never be guaranteed, and credit card networks own the final decision. Fortunately, few travellers abuse chargebacks, and credit card networks have built-in protections to prevent fraudulent behaviour. 

The best way to prevent chargebacks is to consider a traveller’s perspective and address any concerns beforehand that could possibly cause a chargeback. Ask yourself: if you were in a traveller’s position, would you expect a refund or feel misled by the listing?  

Our platform also protects from chargebacks in two ways: 

• Proactive fraud protection: our fraud engine helps reduce the risk of fraudulent transactions on our platform, which in turn reduces the risk of fraud-related chargebacks. 
• Chargeback-fighting professionals: a dedicated team that works behind the scenes to gather the information needed and ensures the chargeback has been properly filed and disputed on your behalf.

When describing your property, please be as accurate as possible. ‘Property not as described’ is the second most frequent reason for successful chargebacks — and one of the hardest to dispute. 

• Keep your property details updated and accurate, including amenities, photos and descriptions. Don’t exaggerate distances to popular locations or use misleading terms.
• Remove amenities from your listing that have been broken or unavailable for use as soon as possible, or make sure to communicate clearly about missing/unavailable amenities with travellers before they book or stay. 
• Avoid fish-eye photos and over-edited, photoshopped pictures. Change photos to reflect the current state of the property. Virtual tours are also a great way to set expectations.
• Guests should always stay at the property they’ve booked. If you need to relocate a traveller to another property nearby, make sure to discuss this well in advance and offer to cancel with a full refund if they refuse. This is a valid case of ‘not as described’ that will always lead to a traveller winning the chargeback.

Other frequent reasons travellers give for initiating chargebacks are ‘denied access to the property’ and ‘due a refund’. Here’s how to set clear expectations to help avoid disputes:  

• Check in your dashboard, under ‘rules and policies’, to make sure that your house rules and cancellation policies are up to date and that you follow the rules you have set for your travellers. Since the house rules are displayed on the traveller checkout page, it can be used as important evidence during a dispute.  
• If you use a rental agreement, it must match the house rules and cancellation policies selected on our platform. If your rules or listing uses language that is vague or open to interpretation, the traveller will be given the benefit of the doubt during a dispute.

Chargebacks are often referred to as ‘the nuclear option’, meaning they should only be used as a last resort. That’s why great customer service can really help prevent chargebacks.

• Honour your house rules and cancellation policies as displayed on your listing, and make sure that you and your travellers are following them. 
• The payment network rules give very little time (often as little as 72 hours) to respond to chargebacks, so always use our secure messaging system to communicate with your guests, including sending or receiving attachments before, during and after the stay. This will provide our chargeback team with complete documentation to defend your case.
• Whenever possible, process refunds through your dashboard under ‘payments’. This will be saved in your dashboard, where our teams can access it directly when disputing a chargeback on your behalf. It also prevents travellers from being refunded twice.

The best practice to follow in case of any disputes is thorough documentation. Always document with specificity any issues with guests that may relate to these topics:

• House rules, cancellation policies, rental agreements
• Damage-related conversations and proof of damage
• Refund agreements and proofs of refund

Sometimes it will be necessary to discuss potential disputes with travellers face to face or by phone. In these cases, you should always create a summary of the conversation afterwards for documentation. 

Use the secure messaging system to send your summary to the traveller to review and sign. The summary should also include any amount due or refunded, and the reason. Taking the time to document important conversations can prevent future misunderstandings.

Learn more about traveller chargebacks.