Travel chargebacks have always existed, but their problems have flown sky-high in the last few years due to credit card loyalty programs, COVID-19, and technology that has made it easier for fraudsters to learn how to scam. As a result, dealing with chargebacks in the travel industry is challenging because it can be tough to determine legitimate disputes and fraudsters.
Due to this, chargeback management services are a must for travel businesses. While you will pay upfront fees, you stand to save hundreds of thousands down the line.
This article will explain why CB-ALERT is your home for fighting travel industry chargebacks so you can grow your business to the next level.
back management services
- Travel fraud comes in many different shapes and forms
- Over 50% of travel fraud targets the air travel industry
- Travel merchants can benefit significantly from chargeback management services such as CB-ALERT
- Air travel friendly-fraud and true-fraud can be tough to distinguish between
- Chargeback prevention alerts via Ethoca and Verifi can help reduce chargebacks
What Is A Travel Chargeback?
Travel industry chargebacks affect many travel merchants ranging from airlines, transportation, hotels, and lodging to travel agents.
Chargebacks can be the bane of any business in this industry, and they must be dealt with sooner than later, or you risk being placed on the MATCH list and having your merchant account frozen.
A travel chargeback occurs when a customer initiates a dispute through their credit card issuer and or bank, stating their reason for the dispute, which can be a myriad of reasons.
Example of a travel dispute:
A typical travel dispute is when a customer stays at a hotel and checks their credit card statement only to find that they were charged for services they didn’t purchase or receive. So instead of calling the hotel or travel agency, they go directly to their bank, stating their frustration.
If the hotel or travel agency cannot provide sufficient evidence against this claim, it will become a chargeback that will significantly affect their bottom line.
Merchants should take every possible precaution to prevent chargebacks to avoid unwanted fees.
What Types Of Fraud Targets The Travel Industry?
- Account takeover/loyalty program fraud
- Friendly fraud
Ordinary credit card fraud is the most common threat in the air travel industry, but account takeover fraud and loyalty program fraud are also common. In addition, airlines and travel agencies frequently face attempts at friendly fraud.
Travel agencies see fraud at a higher rate than other businesses, as fraudsters tend to prey on smaller companies without chargeback systems.
At CB-ALERT, we take pride in helping out companies ranging from startups to companies that process millions/per month.
Loyalty Program Fraud
Airlines and hotels often offer some of the best deals regarding loyalty rewards programs. But unfortunately, Fraudsters will target these types of businesses to get into a customer’s account and spend their rewards for their own trips.
Since this is hard to prove, the customer often makes these types of claims.
Friendly fraud is rampant in the travel industry, and it occurs when a cardholder files a chargeback that they know they aren’t entitled to.
An example of this would be a mini fridge at a hotel resort. The customer knowingly consumes the beverages/snacks and is charged. They then claim that the refrigerator was empty upon arrival in an attempt to be refunded for the purchases.
Reasons For Travel Chargebacks?
Most travel fraud cases involve customer service, lousy service, double billing, quality concerns such as a dirty air b n b upon arrival, and dissatisfaction.
How Can Airlines/Travel Agencies Fight Fraud?
Fighting travel chargebacks should be left to professional chargeback prevention companies due to the time and resources.
By implementing CB-ALERT, we can help you with these issues in real time. If you want to reduce your chargebacks significantly, fill out the application below.
If you’re fighting a travel industry chargeback through representment, your team should be trained on what information is needed. The most important things to present are the following:
- Prove the cardholder’s identity was validated
- Prove the cardholder authorized the transaction and agreed to the terms and conditions before the final transaction
- Emails between the agency and the customer
- Photographs, emails, or social media that show a relationship between the cardholder and the passenger
- Receipts of similar transactions from the customer
The following steps provided will help you fight chargebacks before they are disputed:
- Use robust fraud prevention tools: Implementing tools such as 3DS2 authentication, RDR, Visa Compelling Evidence, Order Insight, and chargeback alerts.
- Use a merchant descriptor: You are making your company more recognizable on a statement by using an accurate merchant descriptor. Make sure that your descriptor name matches your online storefront name.
- Partner with CB-ALERT: At CB-ALERT, we specialize in helping travel merchants stamp out fraudsters before they even reach the dispute phase.
- Clearly communicate transaction details: Make sure your customers understand exactly what they purchase, including the price and associated fees. With travel, any type of convenience/resort fees should be noted upfront to reduce the chance of a chargeback.
- Provide excellent customer service: Respond promptly to customer inquiries and resolve issues promptly and satisfactorily. This can help to prevent chargebacks due to customer dissatisfaction.
- Issue a refund: In almost every case, a refund will cost you less than a chargeback. Refunds also give you a better chance of having a lifelong customer.
- Use clear and concise billing descriptors: Make sure that the descriptor on your customer’s credit card statement is clear and easy to understand so they are less likely to initiate a chargeback due to confusion.
- Keep accurate records: Maintain detailed records of all transactions, including customer contact information, order details, and any communication with the customer. This can be helpful in the event of a chargeback dispute.
- Monitor and address chargebacks: Use chargeback alert systems to monitor for chargebacks and address them promptly. This can help to prevent chargebacks from becoming a more significant problem.
Importance Of Customer Service
Customer service is one of the most overlooked aspects of travel businesses. If a customer is upset, simply issuing a refund can save your business from the wrath of a chargeback.
24/7 customer service is an absolute must when dealing with frustrated customers.
Can Chargeback Mitigation Companies Help?
Chargeback mitigation companies can benefit smaller companies that don’t have the time/resources to deal with disputes independently.
Many large travel companies/airlines use chargeback mitigation companies to maximize profitability.
Fighting chargebacks in this industry is difficult, even for professionals who deal with disputes daily. Remember, chargebacks are decided by the card issuing bank, which will err on the side of the cardholder without blatant evidence that the dispute is invalid.
At CB-ALERT, we can determine whether or not a dispute is true fraud or criminal fraud. Again, Analytics and AI are crucial when identifying the root of your chargeback problem.
Businesses operating in the air travel industry have many moving parts of managing. As a result, dealing with chargebacks is also highly hectic and time-consuming for this industry.
Working with a chargeback prevention company will help you stamp out fraud from the beginning by ensuring you have all the necessary protocols and customer service in place.
Proper customer validation and documentation throughout the process can help you put together a compelling case against a friendly fraud dispute.
Why Choose CB-ALERT To Throttle Your Chargebacks?
Travel chargebacks can be highly harmful to your bottom line as a business. The travel business differs from others with disputes as it can be more challenging to determine a fraudster from someone with a legitimate complaint.
With over two decades of experience in high-risk verticals such as travel, 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
- Gateway/CRM agnostic
If you’re ready to take a vacation from unwanted chargebacks, fill out the application below and let CB-ALERT handle your chargeback management.