SERTIFI GUIDE
Hotel Chargeback Dispute Types and How to Win Back Revenue
In 2024, the hospitality and travel sector saw an 816% increase in chargebacks compared to 2023 (Sift). And with more than 50% of guests disputing chargebacks instead of asking for a refund (pymnts.com), it’s time for hospitality merchants to get proactive and better prepare for chargeback claims.
In this guide, we share three examples of chargeback disputes Sertifi’s payments team recently fought and won, including the evidence that was shown and the lessons that were learned along the way.
Claim #1: Product Unacceptable
The mother of the bride (cardholder) and others demanded last-minute alterations that directly conflicted with the agreed-upon terms established beforehand in the contract. With each demand, the venue accommodated the request to the best of their ability, including:
- The bridal party showing up at the venue hours before the agreed upon start time (the venue welcomed the party and showed them to their dressing room).
- The cardholder requesting different chairs after being dissatisfied with the previously contracted chairs (the venue quickly sourced and rented chairs at no additional cost).
- The cardholder requesting a bar be set up in the groomsmen’s dressing room (the venue quickly arranged drinks).
After the event, the cardholder filed a chargeback on one deposit out of three payments covering the cost of their event, claiming "product unacceptable" after acknowledging and approving of all contracted services that were delivered.
The Resolution: $23,250 Recovered
Evidence Sertifi Submitted
✔️ The official wedding schedule
✔️ A copy of the signed contract with clear terms included
✔️ Proof the payment passed a CVV check, AVS street and ZIP code verification, and 3-D Secure authentication
✔️ Emails between the cardholder and venue leading up to the event and on the day-of
✔️ Security footage of the event and guests enjoying themselves
Key Learnings
Be able to prove your client’s satisfaction.
This can be done with security footage, social media, photography, and/or the clients’ written word.
Be able to debunk false or exaggerated claims.
Get everything in writing to make sure you can show what you and the client agreed to before the chargeback.
Providing supporting evidence.
Without context, evidence can fall flat.
Claim #2: Event Never Took Place
After a wedding, the mother of the bride (cardholder) was unsatisfied with her billing amount for the goods and services provided. She claimed to be displeased with the type of alcohol that was served at the event, the quantity that was served, and how it was served despite these terms being included in the contract.
Checking their records, it was revealed there were only two alcohol-related concerns:
- A guest attempting to remove alcohol from the bar on several instances after being dissatisfied with the bar’s selection due to their religious beliefs (event staff explained it was part of the bar package ordered by the host/cardholder).
- Bar staff discontinuing to serve the best man after he began drinking heavily and arguing with staff (event staff warned the host/cardholder that he would have to leave if the situation escalated).
After the event, the cardholder filed a chargeback claiming “the event did not take place” after being offered a partial refund by the venue.
The Resolution: $13,000 Recovered
Evidence Sertifi Submitted
✔️ A copy of the signed contract with clear terms
✔️ Proof the payment passed a CVV check, AVS street and ZIP code verification, and 3-D Secure authentication
✔️ Dated copies of emails that detailed the cardholder’s dissatisfaction with the bill
✔️ The couple’s wedding website, indicating the date and time the event was held
✔️ A Flickr album of event photos
✔️ The venue’s third-party security company’s report
Key Learnings
Review chargeback reason codes.
This helps you craft a precise and effective rebuttal letter.
Protect yourself for insurance purposes.
Collect photos and security footage to refute allegations and avoid unnecessary insurance claims or legal threats.
Retain security footage longer.
Chargeback windows are typically 120 days from the transaction date. However, for future-dated events, the dispute window begins on the event start date.
Source social media posts.
Leveraging a guest’s social media can be a powerful way to dispute chargebacks, as photos, check-ins, and reviews serve as timestamped evidence proving their presence and engagement at your venue.
Claim #3: Stolen Card
A cardholder noticed they were charged $2,200 from a hotel they had never visited or did business with. Since the cardholder did not authorize the transaction, he filed a chargeback and reported his card as stolen. At the same time, Sertifi received an Early Fraud Warning (EFW) after detecting the charge to be risky. The Sertifi team then notified the hotel of the EFW.
The guest had already checked in under a name different than the cardholder’s, confirming the card’s stolen status, so the hotel called the police. The police arrived and arrested the fraudster who stole the cardholder’s real information.
Resolution: Fraudster Arrested
Because Sertifi alerted the hotel about the EFW while the fraudster was onsite, authorities could arrest them, reversing the charge for the cardholder. The hotel was also saved the time and money having to challenge the chargeback.
Key Learnings
There are other reasons using a proper ecommerce system to process deposits is best practice.
Use 3-D Secure to verify cards.
3DS shifts fraud-related chargeback liability from the merchant to the card-issuing bank. If the issuing bank flags a transaction as risky, a challenge flow is triggered to verify the cardholder’s identity. Using 3DS, especially in conjunction with advance deposit collection, is a great way to detect fraud early.
Process payments securely.
Protect your revenue and your guests by processing payments in a PCI-compliant manner.
Lower your card processing fees.
Processing cards as an ecommerce transaction, instead of a key-entered transaction, can save you thousands due.
Get funds faster.
Processing card and bank payments digitally can help your well-earned revenue arrive in your bank account faster.
Our team of experts is here to help, and our chargeback rebuttal service is completely free to SertifiPay customers.
From unsatisfactory seating to stolen payment credentials, cardholders can and will file chargebacks for countless reasons no matter the validity of their dispute. That’s why hotels can benefit from taking crucial steps to protecting themselves from chargebacks before and after they occur.
At the same time, recognizing the possibility of winning a chargeback with the right defense is just as important. No matter the circumstances, the right evidence and a rebuttal letter stating why the merchant should win the dispute and debunking the cardholder’s false claim are essential. And it’s easiest to work within a system and process that curates that evidence for you from the get-go.
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