Credit card chargebacks and refunds are a major pain for tour and activity operators. What’s the best way to handle them?
This is your chance to learn:
Credit card chargebacks are annoying, but they’re something you’ll definitely have to contend with at some point. Having the right procedures in place for when it does happen is essential. We’ll help you establish how to handle them, as well as to reduce them.
It may seem like credit card chargebacks are just an admin hassle that’s part of running a business, but in reality it’s about protecting your business. For starters, you lose money when people cancel on you because not only do you have to refund that money to the customer who cancelled, but you also lose that spot which could have been filled by another paying customer. Also, in the event of a dispute, you may have to deal with damages from unsatisfied customers, or maybe bad feedback that they post to TripAdvisor links.
How we recommend you handle a credit card refund is to act quickly and don’t try to shift the blame. Even if it wasn’t your fault, the customer is not interested in knowing exactly who or what caused their problem – they just want their money back. If it was your fault, make sure the mistake that caused it is rectified so it doesn’t happen again to another customer. Mistakes happen, you just need to make sure the same mistake doesn’t keep happening.
When you have a dispute situation, our advice is to listen to the customer’s grievance and be courteous. Listen to their side of the story and work with your merchant bank to sort out the refund. If a dispute is well-handled, you can still preserve your business’ reputation.
Disputes typically happen when customers say that a business or experience didn’t live up to their expectations. If this dispute occurs, you need to be prepared to handle it.
If a dispute is escalated to the stage where the customer demands a refund, you need both proof that the purchase was made and proof that the service was delivered. You can prove purchase quite easily with a receipt, and you can prove the service was delivered by showing that the customer turned up for their booking, as well as descriptions of your activity log and photos you might have taken on the day. These can all be set up in Rezdy, for example in your passenger manifest.
Other important pieces of information to keep on hand in the event of a dispute are any correspondences you had with the customer. These include any agreements they signed and accepted at the time of purchase, as well as any cancellation policies you communicated to the customer at the time of purchase. Keeping track of these correspondences is a feature you can input into your Rezdy account.
It is also possible, albeit uncommon, that a customer will make a fraudulent claim. They might claim that it wasn’t them who paid for the activity with the credit card that was provided. This does not happen often, but it is possible that a customer might be trying to dodge your cancellation policy or your fee altogether. In this instance, you can work with your merchant bank who will have policies in place to deal with such an issue.
The best way to reduce chargebacks based on disputes is by being as specific and clear as you can in your product descriptions. This would involve clear descriptions as well as photos, so the customer can see exactly what experience they can expect. It’s also advisable to make it as easy as possible for customers to contact you, so make sure your email and phone number as clearly displayed.
Terms and Conditions and a liability release are also important elements to include. If you make your customers read and sign these, you can be sure in knowing that if there is a dispute based on your policies, it’s not because they were not informed of them. You also want to regularly remind your customers of your Terms and Conditions and your cancellation policy. You know how few people actually read the full Terms and Conditions, so pull out the relevant details (for example ‘Customers are reminded that cancellations made less than 48 hours before the commencement time of the activity will not be refunded’) and put them in the main text of an email. Automatic reminder emails can be set up and sent from your Rezdy account.
A liability release form is extremely important, because this is what will actually protect you in the event of a legal dispute. In your third party disclaimer, you should state the services that will be provided, and also that the company is not responsible for loss, theft, damage or personal injury. This is something you provide to your customers and have them sign when they book your activity or just before the activity commences. The idea is to have the customers assume the risk rather than you. It asks them to take personal responsibility for their actions and the consequences of those actions during the course of your activity.
When you are writing up your liability release form, remember to contact a lawyer to complete the language. They can also advise you on the various activities you might offer and the legal needs that you as a business will need to address.
If you use a third party contractor, a shuttle bus operator for example, to provide guests with parts of your service, make sure you contact them about their own liability release forms. You might be able to use their forms for your guests as well.
Firstly, you need to actually communicate your policies to your customers. You can do this in your customer profile set-up in Rezdy where you would add your general terms and conditions, such as age restrictions or cancellation policies – anything that applies to your whole business. You can also do this when you set up your products in your Rezdy account. At the bottom of the first details page there is an option to enter all of your product-specific terms, conditions and cancellation policies. These are the terms and conditions and extra items of information that apply to each specific product you offer.
Regardless of where you put your terms and conditions, both of them will be fully printed in your confirmation emails to your customer. Cancellation policies should be communicated very clearly in your confirmation emails, for example how many days or hours before the activity commences that you need to be notified of a cancellation. You also need to clearly state what happens if they do not meet those conditions, for example if they cancel within 48 hours of the commencement of the activity, they forfeit the whole fee.