How to dispute a chargeback?

Depending on which version of RaccoonPay you have, the procedure is different. Please consult the following article to know how to proceed: How to dispute a chargeback?

What is a chargeback?

A chargeback, also known as a payment dispute, is a return of money from the merchant (services/goods provider) to a payer of a transaction (consumer), especially for credit card transactions. Merchants typically incur a fee from the card issuer when a chargeback occurs.

When do chargebacks happen?

A chargeback occurs when a consumer (hotel’s guest) questions a transaction and asks their card-issuing bank to reverse it. Although payment disputes protect guests from unauthorised transactions, they can be a big headache for hotels, especially when issued incorrectly.

When a chargeback happens, the disputed funds are held from the hotel by the bank until the result of the dispute is out.

Why do chargebacks happen?

There are many different causes for a chargeback dispute to start, depending on the reasons claimed by the consumer. Here are a few common causes for chargebacks:

• Fraudulent transactions

• Funds not received 

• Dissatisfaction with the booking or service

How to avoid chargebacks?

Since chargebacks cannot be avoided, you can only try to prevent them. The only way to do this is to opt for payment methods that require additional layers of security, such as 3DSecure transactions, rather than cardholder-not-present charges.

Please consult the following article to know more about fraudulent transactions and the best payment options to reduce the chargebacks chance: Understanding cardholder-not-present (CNP) transactions

Who decides the result of a chargeback?

The card brand is the decision maker: Mastercard, Visa, etc.

As a rule, banks and card brands rule in favour of the cardholder who made the chargeback request. In other words, the cardholder is right until proven otherwise. Disputing a chargeback requires being able to prove to them that the charge made to your guest is legitimate, in accordance with the Terms & Conditions previously informed to the guest.

If you cannot prove this, the chargeback will be decided in favour of the guest, so you will lose the amount charged and will have to pay the fees for the chargeback process.

How long does a chargeback dispute take?

The chargeback process can differ between payment processors. Traditionally, it can take between 60–90 days to resolve. 

What happens if you lose a chargeback dispute?

The payment amount will be returned to the consumer’s bank account, and you will be charged administrative fees for the chargeback process. This fee will be deducted from a future payout.

If you lose the chargeback dispute, you may seek recourse and repayment in a court of law at your own expense. That already demonstrates how complicated the process is. 

If you win the chargeback dispute, no amount will be returned to the consumer’s bank. You will be charged administrative fees for the chargeback process anyway, although a lower amount. This fee will be deducted from a future payout.

Is it possible to ask for a review of a lost chargeback decision?

If a property loses the dispute, they may seek recourse and repayment in a court of law at their own expense. That already demonstrates how complicated the process is.