Chargebacks have long been a problem for hoteliers. They’re an obstacle when it comes to profitability and the process to dispute hotel chargeback solution is often time-consuming. Chargebacks exist for a good reason – to protect cardholders from fraud or lack of service – but unfortunately, they can also be used simply as a means of not wanting to pay for something; in our case, hospitality.
So what’s the solution? We take a look at the end-to-end process of chargebacks and how best to handle them as a hotelier.
What is a chargeback?
Let’s start with the basics. Other than a word that strikes fear into the heart of all those in e-commerce, a chargeback is a transaction reversal that’s initiated by a customer’s bank after the cardholder disagrees with a charge on their card. It’s different from a refund because a refund is usually initiated by the service provider, not the bank.
For the cardholder, a chargeback is protection against dishonest merchants and unauthorized charges. For a business, it’s an unwanted, often surprising threat to revenue.
Who's involved in the chargeback cycle?
It’s not only the cardholder, the bank and the service provider who are involved in the chargeback process. These are all the parties who play a part:
- The cardholder
- The card issuer
- The card network (Visa, Mastercard, Amex)
- The acquirer, payment gateway (Adyen, Stripe)
- The merchant – service provider
Conclusion
So, there you have it. Hopefully you’ll only receive chargebacks once in a blue moon (ideally never), and that all the information here has helped you understand the chargeback process and minimize cases.
