Chargebacks – Hints, tips and advice

Travlaw logo


​Few sectors felt the pain of COVID related chargebacks in 2020 as acutely as the travel industry and, whilst the volume of chargebacks is slowly decreasing, the risk is one that still remains.

So, what do you do if you receive a chargeback? How can you reduce this risk going forward? And who can you report the matter to if it escalates and you suffer a loss?

For a number of months now, Travlaw has worked with ABTA, providing a free helpline to members to assist and provide advice on all things chargeback related. No question is too big or too small; too simple or too complex! If you have a query and it is chargeback related – this is your go-to source!

In this article, I thought it would be helpful to provide a brief outline of some of the most common queries that we receive via the helpline, along with some helpful Hints & Tips that you can use when addressing the issue of chargebacks that may arise in your business. 

Receiving a chargeback on a booking that has already been refunded

We have many members contacting us to say that, whilst a customer has been refunded for their cancelled booking, they have still raised a chargeback and, furthermore, this has been upheld and awarded by the bank. Thus, the travel company has effectively had to pay out twice. 

There are a number of reasons why such a scenario may arise but the most likely is that there has been a mis-communication between the customer and the travel company. The customer may have got impatient waiting for their refund, and so decided to commence the chargeback process at the same time to try and get their money quicker. Then, by the time the refund is processed, the bank has proceeded with their refund and so they end up with two payments – each coming from a different source.

If you find yourself in such a scenario, the best thing to go is contact the customer to explain the situation and ask for the overpayment to be returned. Most customers will be happy to do this but if you have any issues or the customer fails to engage, get in touch and we will discuss the further options available to you. 

How to avoid this going forward
If you receive a chargeback request on a booking, it is vital that you cease action on that matter and do not take any further steps to process the refund. If you agree that the customer is due a refund, then you can simply not dispute the chargeback and allow your MSP to claim the monies accordingly. If you do not agree that a refund is due, then you can dispute the process in the usual way. 

HELPFUL TIP: If a customer has paid for their booking via a debit or credit card and you process a refund, you MUST ensure that, where possible, you process the refund back onto the same card. DO NOT pay the refund via cash or BACS, as this leaves the option of raising a chargeback open to customers. 

Chargebacks upheld despite clear and blatant evidence showing payment is not due

Another frequent query that we receive surrounds the issue of chargebacks being raised and upheld when both factually and legally, it is clear that no refund is due to the customer. 

The reasons for no refund vary. For example the customer may have in fact travelled and availed of the services yet still raised a chargeback when they returned home. Perhaps the customer, of their own volition, chose not to travel despite the fact that all services were available. Despite travel businesses dispute the chargeback and providing evidence to support their case, the matter is still awarded against them. 

How to avoid this going forward
When disputing matters such as this, it is important that you keep your response short, sharp and to the point. There is no point in sending your MSP reams and reams of paperwork – as they are not going to read it all. You want to keep your argument succinct and attach supporting evidence where needed. I recommend a two-page maximum for any dispute, with any additional evidence added as clearly marked exhibits. 

You should also refer to the VISA and Mastercard guidance notes where you can. The Mastercard Dispute Resolution Management document makes clear, for example, that if a customer has agreed to Terms and Conditions prior to booking, these will be binding and supersede any chargeback entitlement. VISA’s Managing Disputes through COVID notice, meanwhile, states that if a holiday or booking was unable to proceed because of Government advice, said advice will prevail and no chargeback is due. 

HELPFUL TIP: Speak with your MSP and ask them what information they need from you when disputing chargebacks. Do they require a full copy of your T&Cs? Would they rather you only provided relevant clauses? Do they want your dispute to be set out in a specific format? 

Your MSP should be on your side, and helping you fight these matters, so asking them what they need from you will strengthen your case when presenting this information to the customer’s bank. In addition, your MSP is likely to have received 100s if not 1000s of disputes every day – so if you are able to provide yours in a way that suits them – you are much more likely to be successful. 

Chargebacks raised and upheld against travel agents

The biggest issue that we have seen, without a doubt, is agents being subject to chargebacks, despite the fact they are not the provider of the travel services. Legally, the dispute should be between the customer and the service provider – but the agent takes the hit. 

Due to the way the chargeback process works, it is the merchant that processes the payment that takes the risk, and so agents need to be aware of this despite the fact that they are not the end service provider.

How to avoid this going forward
For travel agents who have their own MSP and process customer card payments directly, there is no immediate or obvious way that the risk of chargebacks can be fully avoided. It is a risk that comes to any individual or business that processes card payments.

That being said, travel agents should consider the following: 

  • Keep an open line of communication with your customers so that they know you are acting solely as agent. Let them know that you are doing all you can to re-coup their monies from the Tour Operator or supplier, so that they know steps are being taken to get their money back. If you keep them fully informed and up to date, it is much less likely that they will resort to a chargeback in the first place.
  • Maintain a positive relationship with your supplier or tour operator. Keep this line of communication open and active so that you can obtain frequent updates on the movement of customer monies and when these are likely to be repaid. 
  • Rely on your Terms and Conditions when disputing any chargebacks, on the basis that these should make clear to your customers that you are acting as agent only and have no liability for provision of the travel services. 

HELPFUL TIP: When negotiating the terms of your agency agreement, seek to include an indemnity clause that states that your supplier will indemnify you for any chargebacks to which you are subjected. This may be a tough clause to negotiate, but we can help. Tour Operators and suppliers cannot ignore the risk that agents face from chargebacks and will have to accept and address this issue should they wish to continue availing of your services. 

Should you have any chargeback related questions or queries, please contact us via the FREE ABTA helpline on 0113 258 0033, or email