Over the years we’ve found that travel and timeshare businesses that come to us have been struggling with a significant number of chargebacks, especially those processing transactions through call centres.
Research confirms that chargeback disputes within the industry have been increasing at about a rate of 30% year-over-year globally. These disputes can result in lost revenue, increased fees, and strained customer relationships. Implementing effective strategies to minimize chargebacks is crucial for maintaining a healthy bottom line and customer satisfaction. The risk of not managing chargebacks easily leads to being out of compliance in 3 months and if you breach your threshold, you could face account holds for 6 months.
The nature of the travel means that services and products are booked well in advance by customers. Long lead times between booking and travel can increase the likelihood of chargebacks due to changes in customer plans, customers forgetting their agreement or dissatisfaction over time. Call centre transactions often lack physical documentation or signatures, making it harder to provide concrete evidence to dispute chargebacks.
Provide clear and flexible cancellation and modification policies. Regularly communicate with customers to remind them of their bookings and any changes to their plans. Use recorded calls for bookings to have an audio record of the transaction and agreement. However, chargebacks will still happen, so it’s important to have systems in place to deal with them. We recommend managing your chargebacks each month. For our clients, we offer a chargeback protection system that gives you real time alerts and a platform to manage your chargebacks (which our customers love using).
Many customers file chargebacks out of convenience, preferring it over directly seeking refunds from the business. In fact 62% of businesses have found that chargebacks are increasing due to travelers perceiving a chargeback as being easier than a refund. This can be due to a perceived lack of customer service or easier processes offered by banks. Call centers might also be seen as less accessible compared to online support, leading customers to opt for chargebacks.
Ensure that your customer service is easily accessible and responsive with obvious contact information and communication channels. Offer straightforward and quick refund processes to discourage customers from resorting to chargebacks. When it comes to dealing with any that arise, know your merchant account manager’s first name and have that same person deal with all your chargebacks. This is the approach we take to save our client’s time and frustration.
Travel and timeshare businesses are often classified as high-risk due to the nature of their transactions, leading to stricter scrutiny from payment processors.This can result in more frequent holds and chargebacks. At JJS Global, one approach we take is to use multiple accounts - to allocate your sales to your different accounts to cut your monthly volume. To reduce risk, we help you get a second bank, with the same credit terms. The result? Now you have doubled your processing power.
Work with a payment processor that understands your industry and offers tailored support. Regularly review your transactions and maintain transparent communication with your processor to mitigate risks. At JJS Global, one approach we take is to manage your sales through multiple accounts to reduce your monthly volume. To further mitigate risk, we assist you in obtaining a second bank with identical credit terms, effectively doubling your processing power.
Sometimes customers suspect fraud due to unfamiliar charges, or business names on statements. This confusion can lead to chargebacks as customers might think the charge is unauthorized.
Ensure your transaction descriptors are clear using a business name that customers recognize. Always send a confirmation email or text message with the details of the transaction, a receipt or purchase summary and copy of your policies immediately after the transaction is completed. This helps in reassuring customers about the legitimacy of the charge and provides a point of reference for them.
This is when transactions are made with stolen credit card information. This type of fraud is more challenging as it directly impacts your revenue and can lead to severe financial losses and penalties.
Implement advanced fraud detection tools and multi-factor authentication. Educate your customers on how to recognize and report suspicious activities. We utilize machine learning and AI-based systems to analyze transaction patterns and flag suspicious activities. For more detailed strategies, refer to our comprehensive guide on fraud protection in a previous post.
Customers may file chargebacks if they believe the service was not delivered as promised. This includes dissatisfaction with the quality of the accommodation, changes in travel plans, or misunderstandings about what was included in the package.
Provide detailed and accurate descriptions of your services. Maintain high standards of service delivery and have a clear feedback process for customers, so you can address any issues before they file for a chargeback. Ensure your call centre staff clearly communicate booking details, policies, and any changes to customers.
Travel and timeshare businesses face unique challenges such as long booking lead times, high transaction volumes, and increased susceptibility to chargebacks and fraud.
Call centers add another layer of complexity, requiring seamless transaction handling and real-time support to manage high volumes of customer interactions effectively.
Off the shelf payment processing products often don’t have the flexibility to adapt a payment processing system for these types of businesses.
A custom, tailored payment processing solution offers advanced fraud detection, flexible integration capabilities, and personalized support, which are critical for managing these complexities.
By providing dedicated account management and adaptable risk protocols, custom solutions like those offered by JJS Global ensure that travel and timeshare businesses can operate smoothly, maintain cash flow, and enhance customer satisfaction, all while minimizing financial risks and protecting their bottom line. By partnering with JJS Global, travel and timeshare businesses can effectively minimize chargebacks and ensure smoother, more secure payment processing.
