Chargeback Prevention Tips
With Sertifi Authorizations, property staff have a solution that allows them to securely collect, authorize, and tokenize credit card details in a PCI–compliant manner. However, Sertifi cannot guarantee prevention of card-not-present (CNP) chargebacks because cardholders are able to dispute transactions at any time for any reason, legitimate or not.
Refer to the following tips to reduce the likelihood of a chargeback.
Review the Fraud Tools Score
Beware of same day reservations – Fraudsters like to act quickly (up to 48 hours prior to check-in), to the point that many hotels have adopted policies of not accepting same day reservations. If it's necessary to accept a same day reservation, properties can mitigate the risk of fraud by requiring an advance deposit, or requesting a second form of payment.
Review information on the authorization form – Ensure front desk staff are trained on how to review and research information in the authorization form. Verifiable information could include:
Business Name, Addresses, and Phone Numbers - A quick Google search of a business name can often verify if it's real or not. Fraudsters often use fake addresses, which may be revealed in Google Streetview to be a home, empty lot, bus stop, abandoned building, and so on.
Signature – The signature should match the cardholder or guest’s name. In the past, some hotels have accepted authorizations signed with obviously false signatures such as “AAAAAAA”, which resulted in chargebacks.
Billing Instructions – This section is not required on the authorization form, so fraudsters may skip this in order to suggest billing was not approved.
Require ID with Authorization – Typically, fraudsters will abandon the transaction if prompted to submit photo ID. If they do share an ID, the property can examine the ID and look for signs of the image being altered or doctored. In some cases, these can be easy to spot if you are prepared to look for it. With 3rd party authorizations, asking for an ID at check-in acts as an effective way to deter fraudsters, especially when an authorization is deemed risky.
Prevent "Friendly Fraud" – If a chargeback does occur, it's often a good practice to directly contact the guest who requested it, as they may unknowingly be committing fraud by asking for a chargeback. Guests may sometimes not realize they purchased something, or didn’t understand what they were agreeing to pay for. The act of speaking with the guest can help prevent a full chargeback. Hotels may also be able to appease a disgruntled guest through other means (partial refund, future discounts, etc.).
Tactics for preventing friendly fraud can include:
Having a clear refund and cancellation policy in place.
Using clear and recognizable billing descriptors on your credit card authorization forms and invoices.
Maintaining internal notes in the guest reservation.
Empowering the Guest Services team to handle guest complaints.
Staying in regular contact with each guest.
Detecting Fraud On Your Own
The Fraud Tools analysis process examines dozens of different data points to assess the safety of an authorization, but there are still signs of potential fraud that have to be observed or detected by a human.
What Fraud Tools Evaluates and Examines | What Fraud Tools Does Not Evaluate or Examine |
|---|---|
Card authorization status | Spelling errors in a street name on an authorization form |
Payer’s billing ZIP code | An address using a street that doesn’t exist, or is located in a different city (1600 Pennsylvania Avenue vs 1600 Pennsylvania Street) |
The length of time a payer’s email address has been in use | A user paying with a corporate or government card, but using a free email address domain like Hotmail or Gmail |
Payer IP address | An authorization form listing the payer’s name as a fictional character, celebrity, or combination of words in a foreign language that might look like a name (Hercule Poirot, Michael Jordan, Prawo Jazdy) |
Number of recent chargebacks on the card, if any | Any information about the payer from your property management system, such as customer notes or internal flags |
Any signs of past fraudulent activity on the card | A same-day check-in, which is among the most common indicators of attempted fraud |
AVS/CVV verification | A payer signing the authorization form with gibberish text. |