Best Practices on cancellation credit card chargebacks?

Question

Lately, we have been inundated with last minute cancellations, with the guest disputing the charge with their credit card company. We are losing our appeals.

We are able to demonstrate seemingly everything that the credit card company is asking for - the reservation details, the fact that the guest accepted our terms and conditions, and timestamps for all, including IP address.

However, the credit card companies are taking it one step further now. Here is the new response:

"The Terms and Conditions were not properly displayed for the cardholder during the order process or on the same screen as the checkout screen before the final checkout. The merchant also failed to provide proof that the cancellation policy was properly disclosed to the cardholder."

Frankly, it seems that the credit card companies have created a mountain too tall for us to climb. I don't know how we would ever prove, to their satisfaction, the above. Many of our reservations are made through VRBO, and one would think that VRBO has screenshots of all of this. They used to, and would forward them to us upon request. NOT ANYMORE. VRBO is completely uncooperative in this.

I am contemplating just turning each of these over to an attorney, sue for the chargeback plus legal fees, and let it go. I'm not sure what else to do.

But if this is the new normal, it could jeopardize our very business. Any thoughts on this from the STR community?

Patricia Andriolo-Bull · Answer

Not sure if this will help you at this point or not but VRBO clearly spells it out. I went into two of my listings (one with a flexible cancellation policy and one with non-refundable) and it is pretty clear what the terms are BEFORE booking. See attachments. Perhaps you can use something like this from your listing to show that the guest was in fact notified during booking? I recently started using OwnerRez and have the guest sign my ow rental agreement otherwise the booking is cancelled. There terms are clearly spelled out in my rental agreement. They have 2 days to sign it or the booking is automatically cancelled. That said, I have never received a charge back...knocking on wood here.

Michael Baum · Answer

We haven't had anything like that happen but it sure is disturbing.

John Underwood · Answer

Require travel insurance that you can make a claim on?

Sarah Kensinger · Answer

I know of a host that took a guest to court over a false chargeback on a large booking. He made sure to use the court in the state they were in, and not the guest since it made things harder for the guest. Other than that, I'm not sure what to recommend except maybe team up with Lynnbrook for payments outside Airbnb. They would help walk you through chargebacks.

Andrew Steffens · Answer

I get about 1 a month on average. I am around 50% win rate. What it appears matters most is who the issuing bank is. I am above 50% on standard Visa/MC, below 50% on Amex, and about 0% with anything that is like a local credit unions. It is unfortunate, you can get an attorney/collection agent if it is truly fraudulent.

Lauren Kormylo · Answer

From what I read in other groups for hosts, Vrbo will only help you dispute a chargeback the first time. If you win but the guest then appeals it, Vrbo washes their hands of it and you lose. From what I hear, Vrbo is much worse than Airbnb in this respect. The only times I've heard of a host prevailing with the CC company has been when they require a guest to sign their own rental agreement, where everything is spelled out. Vrbo's agreement is not enough proof for the the CC company. It also isn't enough proof for a judge in small claims court, if you decided to file on the guest there - you'll need your own rental agreement. I have heard of hosts taking that route and winning too. Even the threat of court has caused some guests to pay up.

JD Martin · Answer

It's just more bullshit that hosts are having to put up with all across the board. I think there's going to be a serious thinning out of STRs because of the overall market and interest rates, and people just getting fed up with the platforms, unless one of the newer no/low fee platforms takes off.

JD Martin · Answer

It's not. I'm an authorized reseller for Generali (for our guests that book off-platform) and it's something like $59 for the guest, and you can buy it on their behalf, but I'm not sure that it covers chargebacks. I went through the training module and didn't see that as a submittable claim, but it's a good question - I'll have to ask my rep about that.

Yitzchok Carmen · Answer

Quote from @Collin Hays:

Merchants rarely win chargeback disputes. I’ll fight them 100 percent, but the deck is way stacked against you. I chalk it up as the cost of doing business.

What changed:)

Tom Dieringer · Answer

Are any of you who use a separate rental agreement willing to share a copy? I have rental agreements for my LTR but couldn't imagine using that for my STR. Thanks

Best Practices on cancellation credit card chargebacks?

Best Practices on cancellation credit card chargebacks?

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