Med Spa Chargebacks

Med spas find themselves in a unique position as they blur the lines between low and high risk. With more and more services being offered that banks tend to be iffy about, we are seeing payment processors such as Square start to become extremely strict.

For this reason, limiting your chargebacks has never been more essential as they more chargebacks you have, the more scrutiny you will face.

At CB-Alert, we help med spas lower their chargebacks through our proven chargeback management systems so that you inject your business with success.

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Key Takeaways

  • Understanding reasons for chargebacks is crucial for minimizing occurrences
  • Chargebacks have immediate financial implications and can damage relationships with payment processors
  • Calculating chargeback ratios is important for assessing risk level
  • Prevention strategies include clear billing descriptors, excellent customer service, and proactive communication with clients.
  • CB-Alert is the leading med spa chargeback prevention company

What Are Med Spa Chargebacks?

A medical spa chargeback occurs when a customer disputes a charge directly with their bank instead of with you, the medical spa. They occur for many reasons, but they typically involve billing descriptors or poor services.

It’s crucial to understand that chargebacks aren’t just a simple refund. They’re a serious claim that can adversely impact your reputation and bottom line.

You’ll be held accountable for proving the legitimacy of the transaction. The credit card companies aren’t in your corner; they’re neutral and lean towards protecting the cardholder. 

Why Do They Occur Frequently?

Here’s a quick breakdown of why we see many med spa chargebacks.

High-Ticket Services: Med spas often provide high-value services such as cosmetic treatments or medical procedures. Customers may dispute charges if they are dissatisfied with the results or perceive the service as not meeting their expectations.

Complex Services: Some procedures offered by medical spas can be complex and may have varying outcomes for different individuals. 

Customer Expectations: Customers may have unrealistic expectations about the outcomes of treatments or procedures. If results do not meet these expectations, they may dispute the charges.

Payment Disputes: Billing disputes can arise if customers are charged incorrectly or if they feel they were overchargedfor services rendered.

Communication Issues: Miscommunication between the customer and the med spa staff regarding the treatment process, expected results, or pricing can lead to dissatisfaction and subsequent chargebacks.

Quality of Service: Poor customer service, long wait times, or inadequate post-treatment care can contribute to customer dissatisfaction and increase the likelihood of chargebacks.

Why Are They So Costly?

They’re expensive as you are hit with a chargeback fee ranging between $20 and $100, as well as a refund for your services. Since med spa services are typically expensive, you could be on the hook for thousands of dollars.

Popular services offered at med spas:

How To Calculate Your Chargeback Ratio

This ratio is calculated by dividing the number of chargebacks by the total number of transactions in a given month, then multiplying by 100 to get a percentage.

The process involves these steps:

  • Count your total monthly transactions.
  • Count your total monthly chargebacks.
  • Divide the number of chargebacks by the total transactions.
  • Multiply the result by 100 to get your chargeback ratio.

A high ratio could put your merchant account at risk. That’s why managing chargebacks effectively and keeping your ratio low is vital. 

Med Spa Chargeback Prevention

  1. Deploy Robust Fraud Prevention Tools: Strengthen your defenses against fraud using advanced tools such as 3DS2 authentication, RDR, and Ethoca/Verifi alerts.
  2. Optimize Merchant Descriptor: Make your company easily recognizable using an accurate merchant descriptor matching your online storefront name. This clarity helps prevent confusion and reduces the likelihood of chargebacks.
  3. Partner With CB-ALERT: Collaborate with CB-ALERT to proactively eliminate fraudsters and prevent chargebacks from occurring in the first place.
  4. Ensure Transparent Transaction Details: Communicate transaction specifics clearly to your customers, including the purchase details, pricing, and associated fees. Clarity minimizes the chances of chargebacks resulting from customer misunderstandings.
  5. Prioritize Refunds Over Chargebacks: In most cases, offering a refund is more cost-effective than dealing with a chargeback. Refunds also enhance the possibility of retaining the customer’s loyalty.
  6. Round-the-Clock Customer Service: Exceptional customer service is pivotal in combating chargebacks. Prompt and satisfactory resolution of customer issues can prevent disputes from escalating to chargebacks.
  7. Use Clear and Concise Billing Descriptors: Ensure that the billing descriptor on your customer’s credit card statement is easy to comprehend, reducing confusion and, subsequently, the likelihood of chargebacks.
  8. Maintain Accurate Records: Keep detailed records of all transactions, including customer contact information, order specifics, and any customer communication. This documentation can be invaluable in chargeback disputes.
  9. Employ Chargeback Monitoring Systems: Utilize chargeback alert systems to address and manage dispute cases promptly.
  10. Scrutinize Irregular Orders: Be vigilant about orders that deviate from the norm, such as transactions from unfamiliar countries or vast amounts. Investigate these cases to ensure accuracy and security.

Choose CB-Alert

Med spa businesses can ruin their finances quickly and face legal issues if they let their chargebacks get out of control.At CB-ALERT, we know exactly what to look for when optimizing your website to fight chargebacks.

We also are confident that we can significantly reduce your chargeback ratio.

With over two decades of experience in the adult space, we can help grow your business and be a vital piece of the puzzle. Below are some of the things we bring at CB-ALERT:

  • Alerts in real-time Ethoca and Verifi
  • 24/7 customer service
  • Transparent pricing
  • RDR
  • Gateway/CRM agnostic
  • Order Insight

Fill out the application below to find out how we can help your business.

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