Chargebacks in the hotel industry can be costly and involve complex arbitration. Guests may cancel hotel reservations for a variety of reasons while emergent external factors such as the Covid-19 pandemic make the chargeback process even more challenging for merchants.
Given the unique challenges of the hotel industry, it is crucial that you have an effective chargeback policy in place that produces satisfactory outcomes for your business and your guests. Backed by extensive industry expertise, we can help you develop and implement a chargeback policy that avoids payment friction, and serves both your business and your compliance needs.
We understand the challenges that hotels face when dealing with chargebacks: guests may cancel reservations for a variety of reasons and often at the last minute. In the era of Covid-19, cancellations have become more frequent and more costly, and merchants need to be prepared to navigate the chargeback process quickly and effectively.
The key factor in managing hotel chargeback disputes is understanding the cancellation policies of the card schemes that you accept. Merchants must be able to demonstrate proper disclosure of policy rules prior to payment, and confirm that customers acknowledged and understood them.
Communication with guests is especially important in the hotel industry. Your reservation cancellation policy must be disclosed and communicated to guests clearly and, crucially, before payments have been finalized.
We offer extensive hotel payments industry expertise and we’re ready to help you navigate every step of the chargeback process - from disclosing scheme policies at the payment stage, through to arbitration.
When a merchant restricts cancellation of their services, they must clearly disclose their policy to cardholders before payment and reservation has been made. When a chargeback is received, the merchant must be able to demonstrate that the cardholder accepted the policy prior to payment.
Card schemes set out rules for merchants on how merchant cancellation policies should be disclosed to customers. Read our guide to proper disclosure of your cancellation policy below.
Your disclosure should comprise a 'click to accept' button, checkbox, or similar acknowledgement.
For cancellation-related chargebacks, merchants must be able to demonstrate that the customer accepted the policy before finalizing their payment/reservation.
Reservation details containing passenger and flight data that include the cancellation policy for the specific reservation.
Sample screenshots that show your cancellation policy was referenced during final checkout.
A screenshot from the final payment page demonstrating that cardholders had to acknowledge acceptance of terms and conditions.
This website contains general information, it is recommended that you seek legal and expert advice regarding your own merchant chargeback policies.