Know The Ins and Outs of Chargebacks

When guests want to cancel, know your rights and make technical moves in accordance

Many of our vacation rental clients are offering flexibility in their  cancellation policies due to concerns about COVID-19 to help protect  general health. Airbnb may not be giving hosts a choice, but when you are MOR (merchant of record) with a processor that provides customized  vacation rental payment processing solutions, the financial decisions  that impact your business are yours to make.

Some vacation rental property managers are offering guests a  penalty-free rebooking and others are offering refunds (full or partial)  where they normally wouldn’t give them. Our research confirms that very  few VRPM’s are holding firm to their pre-virus cancellation policies.

Throughout our 20+ years of helping the vacation rental space  navigate secure, integrated payments through natural disasters and  financial downturns, there is one indisputable fact:  More flexibility up front results in fewer chargebacks and other financial disputes later.  We  suggest discussing this pandemic issue – specifically the intersection  of COVID-19 and chargebacks – with your homeowners proactively and  decide together whether building in additional flexibility to your  cancellation policy is the best business decision for you.

Ascent has 20+ years of experience providing white glove chargeback  support for the vacation rental industry. We are diligently helping our  clients through COVID-19 (aka Corona virus) chargeback and potential  chargeback scenarios.  Consistently providing this level of support to  our clients has resulted in our average client seeing a 20% increase in  wins. We’d love to help you achieve that level of success too. Our COVID-19 chargeback specialists have provided some general  information below that should help you navigate the current situation:

As of 3/17/2020, the same processes apply to Corona virus chargebacks  as any other cancellation chargeback you might receive – the same  documentation that is normally needed to fight the chargebacks still  applies. If there is a government travel ban issued for your  area, or if Visa, MasterCard, Amex, and/or Discover put emergency  regulations in place, current processes or rules may change.

To help you prepare for chargebacks you may receive, we have outlined  general information below, using the dispute reason code of Credit not  Processed (Service Cancelled) as it will be the most common reason code  used by your guest’s bank to charge back a reservation cancelled outside  of your cancellation policy.  We hope you find it helpful.

Credit Not Processed (Services Cancelled)

If a cardholder cancelled services and is expecting a refund, even  though they were in violation of the cancellation policy, you need to  prove that the cardholder agreed to your cancellation policy at the time  of payment and that they cancelled outside of that policy.

In responding to this chargeback reason code, we suggest you provide:

• a brief explanation along with a timeline of the transaction
• detail about how the cancellation was outside of your policy
• refer to supporting documents that ideally include a signed rental  agreement referencing the cancellation policy, with cardholder initials  or signature within one inch of the cancellation policy
• If payment was taken online, you can also provide proof that the  cardholder had to “click to agree” to your terms, including the  cancellation policy, before making payment

If you receive a chargeback where you agree that a credit is due, and  you have already issued a refund, provide proof that the refund was  issued, along with a brief explanation and timeline of the transaction.

If you received a chargeback where you agree that a credit is due but  you did not issue a refund yet, we recommend you accept the chargeback  because the cardholder has already been credited.

General Chargeback Rebuttal Suggestions:

When rebutting a chargeback, include the first page of the chargeback  documentation and check the box next to “please check here if you  disagree with the cardholder’s claim…”.

If there are additional pages included in the chargeback  documentation you received, you do not need to send those back with your  response.

Always write/type the case number in the upper right corner of every page of documentation you send back with your response.

Each chargeback has a reason code associated with it (not as  described, fraud, cancelled, etc.) and you want your rebuttal to be  tailored to address the requirements of that particular reason.

The chargeback documentation you receive includes some information about what you can provide to fight the chargeback.

Because chargeback clerks initially process your rebuttal  documentation, we recommend that your response be brief, targeted to the  chargeback type, and tied to any supporting documents you provide.

To that end, we find that using a timeline format can be helpful to keep the explanation concise and easy to follow.

If you do provide supporting documentation, we suggest labeling it  (Exhibit A, Exhibit B, for example) so you can clearly tie it to your  explanation.

Documentation that is generally helpful to include is folio  information showing the guest’s name, address, dates of payment,  reservation dates, home reserved, etc.

From there, the documentation you provide should be targeted to the chargeback type.