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.

How can you handle credit card refunds?

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:

  • Proof of purchase.
  • Proof that services were delivered (ie. they showed up).
  • Copies of the description of the tour or activity, along with photos.
  • Any correspondence with your customer.
  • Any agreements your customer signed or accepted at the time of purchase (ie. your liability release, your terms and conditions).
  • Any cancellation policy that you communicated to your customer.

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.

How can you reduce credit card refunds based on disputes?

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:

  • Describe products as accurately as possible.
  • Provide clear photos.
  • Being easy to contact in case they have questions.
  • Make them read and agree to liability release, terms and conditions, and cancellation policy.
  • Have a process in place to keep customers informed of your terms and conditions (eg. each reminder email you send to them will contain it).
  • Maintain good records.

Remember that this is your way of protecting yourself legally, so you have to be vigilant.




Rezdy liability waiver credit card refunds




Specify your terms & conditions in Rezdy

Rezdy allows you to specify standard and specific terms and conditions:

  • Standard – You can add your standard T&C to be displayed for every booking for every product.
  • Specific to product – You can add product specific T&Cs by editing any product, under the TERMS AND CONDITIONS section. This specific T&C will be displayed only when a booking is made for this particular product, and this text will be in addition (on top of) your standard T&C.

TC credit card refunds

It will appear at the end of your confirmation and reminder emails. Here’s an example:

rezdydemo4 credit card refunds




payment gateways credit card refunds




What’s Next?

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Simon Lenoir, Founder and CEO of Rezdy Online Booking Software
About Simon Lenoir

Simon has over 15 years’ experience as an IT professional. He also has extensive experience in the travel industry from being an around-the-world traveller and managing a dive centre in Southeast Asia for over 3 years. Simon is now dedicated to providing the best online booking solution for tours and activities operators; he is the brains behind Rezdy.Outside office hours Simon is a true activity addict – mountain biking, sailing, swimming, beach volleyball – just to name a few. But most of all he loves diving in Australian waters.

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Handling and Reducing Credit Card Refunds for Tour Operators

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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.

How can you handle credit card refunds?

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.

How can you reduce credit card refunds based on disputes?

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:

Remember that this is your way of protecting yourself legally, so you have to be vigilant.




Rezdy liability waiver credit card refunds




Specify your terms & conditions in Rezdy

Rezdy allows you to specify standard and specific terms and conditions:

TC credit card refunds

It will appear at the end of your confirmation and reminder emails. Here’s an example:

rezdydemo4 credit card refunds




payment gateways credit card refunds




What’s Next?