How to Deal with Chargebacks

No matter what payments software you use, chargebacks happen. So what can you do to protect yourself?

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No matter what payments software you use, chargebacks happen. So what can you do to protect yourself?

WHAT IS A CHARGEBACK?

  • When you charge a client’s credit card, they might choose to file a complaint with their bank to dispute the charge.

  • Their bank will investigate the complaint and StyleSeat will send you an email letting you know the investigation is in progress.

  • If you respond to our email and work with us to gather evidence, we can fight the chargeback on your behalf.

 

TOP REASONS WHY CHARGEBACKS HAPPEN

 

#1. Clients don’t recognize the charge on their bank statement.

  • They may see the words, “Stripe, Ca” or something similar, once they are charged for a service. “Stripe” is StyleSeat’s payment processing partner.

  • Sometimes the tip appears as a separate charge from the service amount.

  • If you charge your client more than a day after the service, TELL YOUR CLIENT, the charge will show up later on their card.

 

#2 Clients don’t think they should be charged for canceling late or not showing up.

  • If you enforce a “No-Show/Late Cancellation” policy, a client might file a complaint against this charge.

  • You did the right thing here. It is common practice to charge for no-shows and late cancellation.

PROTECT YOURSELF -- make sure to always gather evidence from the scheduled appointment.

  • Save text message and emails between you and the client that prove you reached out to them before charging them.

  • When clients visit your salon, have them sign a “Customer Intake Form.” In this form you can gather all their contact information AND highlight your No-Show/Late Cancellation policy.

 

#3 Clients aren’t happy with their services or the price.

Some unhappy clients try and get their money back through the bank instead of working it out with you.

  • Communicate with your client -- make sure they are happy and they know the full price.

  • If you add products or services in the salon, make sure your client knows the final total cost.

  • If they are unhappy with the service, offer to fix it.

  • Take before and after photos as evidence that the service was completed.

 

#5 Clients are disputing a charge from another vendor.

In this case, the bank may put a temporary hold on all your client’s recent transactions until the case is resolved. You can ask your client to contact their bank to remove the hold on your transaction if you believe it is a mistake.

 

#6 Clients pay in cash but their card still gets charged.

  • If your client pays in cash, you need to mark “paid in cash” during checkout.

  • If you forget, clients will get charged twice and you need to refund them before they decide to take it up with the bank.

 

#7 Some clients are frauds.

Unfortunately, some clients use stolen credit cards to book services. In this case, the rightful owner of the card will work with their bank to get the charge cancelled.

  • Block this client from trying to book with you again -- apps like StyleSeat can help you with that.

  • You can list bad clients with Fraud Report, an online service that lists fraudsters.

Nobody likes chargebacks, but they are a part of business that every professional has to prepare for. Remember to collect evidence and always communicate with your client.

 

Looking for tools to help you run your business? Join StyleSeat here.  

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