How To Handle Chargebacks At Your Hotel

guest paying a hotel security deposit

It’s not uncommon for hotels to require a security deposit during a guest’s stay. Usually, these are returned in full as most guests do not damage their hotel rooms. However, situations arise when a guest becomes careless with the room, and something gets damaged. When this happens, hoteliers have every right to keep some or all of the security deposit. This is, after all, the purpose of charging a hotel security deposit. These guests often charge back these deposits, even though they damaged the hotel room. Guilty or not, banks are usually inclined to support their customers’ claims, and generally, there is no tangible proof of the damages being the guest’s fault to support the hotel’s claim. Hotels annually spend around $250,000 on fixing these damages. So, the question becomes, how can you discern between honest and fraudulent charges? Further, how can you prevent chargebacks? Let’s take a look.

Honest vs fraudulent chargebacks

The nature of chargebacks is a case-by-case situation. Let’s say your hotel has charged a security deposit to a couple staying the night. The whole night, their next-door neighbors make a horrendous amount of noise. This couple has complained to your staff repeatedly, and no one has intervened to solve this issue. If you were to hold on to the couple’s security deposit and the couple chargeback this, they have every right to do so. Your staff should have intervened and put the noise to an end. Now, if the group next door to the couple were charged a security deposit, and they were disrupting other guests all night and perhaps even causing damage to your hotel room, you should keep that security deposit. If they chargeback this even though they were disruptive and the space they stayed in needs repairing, this is fraudulent.

Payment screenings

Fraudulent chargebacks may also occur at your hotel if the incoming guest uses a stolen credit card. This is why it is important to conduct careful payment screenings. Ensure your staff constantly checks the name on the credit card and the incoming guest’s ID. If something does not make sense, ask them to verify this payment by having the cardholder confirm it before being charged. It is better to be thorough and avoid chargebacks than to potentially lose profits. Most guests will understand this and verify the payment, as they are not doing anything wrong. If there is a guest who is pushing back about confirming their payment, you can explain to them the security purposes of doing so. If they still refuse, chances are they are using a stolen credit card. Stripe is an excellent tool for verifying your guests’ payments.

Importance of evidence

Providing evidence is the best way you can ward off chargebacks. However, it is important to note that this will not bring them to an end. You will always encounter guests who feel security deposits and extra charges are unfair and will go to their banks about this. Even though these situations are not entirely preventable, it is essential to learn how to deal with them best. As banks are inclined to side with their guests, it is possible even after presenting evidence, they may honor their client’s claims. Still, with the evidence, you have a much greater chance of the banks siding with you.

Any damages that occur in your hotel rooms should be photographed as a part of compiling the evidence. Still, it can be challenging to tie the photos to specific guests. You will need more tangible proof than this. You may think the only way to gather this evidence is with a security camera, which would violate the privacy of your guests. But there are other ways to do this, all while respecting your guests’ privacy.

How to collect the proof

It can be tricky to gather this proof without invading the privacy of your guests. However, it is possible and easy to do so. The best way to obtain the evidence of damage you need is by installing Alertify. Alertify is a small, plug-in room monitoring device. The device monitors noise, smoke, occupancy, and temperature changes. It is important to note that Alertify does not listen to conversations; it only monitors noise decibel levels. Alertify will notify hoteliers in real-time with customizable notifications if any of these activities occur. Not only does Alertify notify hoteliers, but the device keeps a record of what happened and when. You can view this on an online portal. You can print these records and submit them to the banks of your guests when they attempt fraudulent chargebacks. Installing Alertify will significantly increase your chances of retaining the security deposits you charge and help to prevent fraudulent chargebacks. Between photographic evidence and Alertify, you can better handle fraudulent chargebacks in your hotel. Install Alertify in your hotel today.