Hotel Chargebacks: A Growing Pain for Thai Hospitality

Your hotel team works tirelessly to deliver exceptional hospitality. But what happens when a satisfied guest goes home and unexpectedly reverses their credit card charge?

This is a painful reality known as a chargeback.

With credit card fraud on the rise, chargebacks are becoming an increasingly significant challenge for hotels in Thailand.

Beyond the lost revenue, chargebacks come with hefty fees.

Banks may impose a hefty 3,500 THB or $100 fee for each instance.

Understanding the Chargeback Beast

To effectively combat chargebacks, we need to understand their nature. Let's break down the types of chargebacks:

Genuine Fraud: This occurs when a stolen credit card is used without the cardholder's knowledge.
Friendly Fraud: This happens when a guest intentionally disputes a legitimate charge, often due to forgetfulness or dissatisfaction.

While genuine fraud is a serious issue, friendly fraud is often more prevalent and easier to address.

The Impact of Friendly Fraud

Friendly fraud can significantly impact your hotel's bottom line.

In about half of friendly fraud cases, the guest simply doesn't recognize the charge.

This highlights the importance of clear communication and detailed receipts.

To go deeper watch the interview between James Lemon, Global Lead of Travel and Chad Brubaker, Senior Director of Product at Cloudbeds

Strategies to Reduce Friendly Fraud

Here are some practical steps to minimize friendly fraud:

Clear Guest Communication: Ensure your guests have multiple ways to contact your hotel, including clear contact information on receipts and easy-to-find contact details on your website. Train your staff to handle payment inquiries professionally and promptly via chat and email.
Digital Receipts: Transition to digital receipts with itemized details and links to your terms and conditions. This not only reduces costs but also provides guests with clear transaction information.
Leverage Payment Provider Support: Many payment providers offer tools to streamline refunds and gather evidence for chargeback disputes.
Statement Descriptors: The 10-character description on the guest's card statement should be as recognizable as possible. Use your hotel's name or a shortened version that clearly identifies your business.

Techie Stays: Your Partner in Fighting Chargebacks

Techie Stays, powered by Stripe, is a guest payment solution.

Works stand-alone and does not require a specific PMS or BE.

Take guest payments in-person, email, chat, social media and web. Works on mobile.

Take payments when your guest is not near your card machine.

Provide digital receipts to reduce charge backs and reduce labour associated with payment reconciliation.

We want to work with hotels and property managers to provide a web-based solution to charge OTA Virtual Credit Cards, (VCCs) and take credit card pre-authorizations for reservations.

Learn more, start a free trial. Have a say in solving hotel payment problems.