Credit card refunds are a major pain for tour and activity operators. What’s the best way to handle them?
First of all, let’s discuss what a refund is. A credit card refund (otherwise known as a chargeback) occurs when a merchant bank account is debited the amount of a transaction that had had previously been credited to it.
This happens either because you made an error at the point of sale (for example, you charged an expired credit card), or the credit card holder disputes the transaction for some reason (due to fraud or because they didn’t receive your services).
Whatever the reason is, you want to reduce credit card refunds because it slows down your cash flow and they are an extra administrative hassle that you don’t want to deal with.
Act quickly. If it was your fault, correct mistakes and make sure it doesn’t happen again. If it’s a dispute, then be courteous and responsive. Listen to their side of the story, and work with your merchant bank to resolve the issue (they will usually have a system for this).
There is information you can provide that increases your chances of winning a dispute:
Of course, there is a very small chance that they’re making a fraudulent claim. When this happens, you need to work with your merchant bank to resolve the issue. However, they usually do everything they possibly can to prevent it from happening in the first place.
There are preventative measures you can take to minimise dispute-based credit card refunds. You need to set expectations and be well-organized on the admin side of things:
Rezdy allows you to specify standard and specific terms and conditions:
It will appear at the end of your confirmation and reminder emails. Here’s an example: