Anyone operating serviced accommodation and taking bookings from booking.com (bdc) will know that sinking, annoying feeling of payment disputes and chargebacks. For the most part in our business, we traditionally haven’t had too many since the majority of our bookings have been direct and via an invoice and bank payment.
However, these payment disputes have been increasingly popping up so we thought we’d investigate why and share some findings.
In short, it would appear that more and more fraudsters are stealing credit cards and booking mini breaks using the stolen cards. Not only that, once staying in the serviced apartment they go on a shopping spree online and have the goods delivered to the property they are staying in. Sneaky huh? How do we know this? After one fraudulent stay pre Christmas, a pair of super expensive Nike trainers were delivered to the property he stayed in. We called the online store, who were surprised and grateful that we were returning the goods, and they confirmed that these fraudulent purchases are happening more and more frequently. Using a serviced apartment as the delivery address was new to us though.
The experienced members of the community will know all the below but I’m sure there will be others earlier in their journey who will find this helpful.
WHAT HAPPENS WHEN YOU GET A PAYMENT DISPUTE AND CHARGEBACK
When you receive notification of a payment dispute on Stripe the amount under dispute is returned to the cardholder’s bank along with a £15 payment fee. You have about a month to respond and provide evidence. Even if you have proof of guest communication confirming a remote check-in, if the card is indeed fraudulent then unfortunately you’re fighting a losing battle. The guest has been and stayed, you’ve paid for the clean and change of linen, and you’ll never be able to re-sell those nights. So, be sure you don’t spend the booking revenue or distribute it too soon.
The second kick in the ribs with too many fraudulent disputes is that your payment gateway will see you as a higher risk and start to increase your commission charges. Or worse, they can shut your account down.
SO WHAT CAN YOU DO TO PREVENT CHARGEBACKS?
For all of your bdc bookings, be sure to cross check the guest address used for the booking with the country the credit card is registered in. If they differ it’s a definite red flag and most likely fraud. You need to request proof of ID to match guest booking name with the name on the card. If the guest refuses to show proof then you may want to cancel the booking. At the very least stipulate that proof of ID is required at check in- and with that there will be a good chance they will cancel anyway.
If you take a booking which you suspect to be fraudulent and you decide to cancel the booking and refund the payment be sure to report the payment as fraudulent to both Stripe, as they can stop any further action being taken with the card, and to bdc so they can cancel any commission charges.
Here are a few more tell tale signs of a potential fraudulent stay:
*The guest refuses a meet and greet
*The guest says they are arriving at a crazy time ie after midnight and so won’t need a meet and greet
*The guest wont answer calls or speak directly but instead insists on text communication
*The guest gives an excuse as to why they can’t provide photo ID
What other stories of fraud and preventative measures can you share?