Avoiding payment disputes
The problem
Payment disputes and invalid transactions are a major problem for the hospitality industry, with hotels too often having to refund charges when faced with customer queries on credit and charge-card bills. These "charge-backs" not only represent lost revenue but also require a significant amount of time to investigate and are a cause of customer dissatisfaction.
Expert Advice
Compared with other industries, the hospitality sector suffers from more customer disputes due to charges not being recognised. With every query estimated to incur about £30 in administrative costs, this can turn into significant amounts. Then add the actual potential cost from a charge-back, and dispute-reduction initiatives become even more of a priority.
This is a particular problem for hotels, where confusion over charges can arise for a number of reasons. A common dispute is for customers to query late charges added after checkout, such as restaurant bills, minibar charges and gift shop purchases. This is exacerbated by express checkouts and customers receiving their card statements weeks later when they have long forgotten the details of their stay.
No-show charges on hotel bookings are also a particular burden for hotels, especially if the cancellation policy is not made clear at the time of booking.
By following a few simple procedures it is possible for hotels, in particular, to significantly reduce the number of customer queries and charge-backs arising from disputes. It all translates into bottom-line savings and improved customer service.
No-show Check list
* Always record full details of the card at the time of booking. Get a contact phone number and clearly state your cancellation policy.
* Remember to state "card holder not present" when charging for a no-show booking.
* Always give the card holder a cancellation number.
* Ensure that the no-show charge clearly appears on the card holder's statement.
* "Card holder not present" transactions are always at the establishment's risk. To reduce the risk you should obtain authorisation from the card holder in writing.
* Do not request a faxed copy of the front and back of the card as this does not reduce the risk of a charge-back and increases the risk of card fraud.
General check list
* Capture card details at the front desk when the guest checks in and make sure that the registration form is completed in full. If the guest's details already exist from guest history or time of reservation, ask the guest to verify and sign.
\* Check the name, number and signature on the card with the receipt, to ensure its authenticity. Mismatches can result in charge-backs.
* At check-in, always pre-authorise the total estimated amount (ie, room rate plus estimated extras multiplied by the number of nights) and ask the guest to sign for this amount. The slip is torn up at checkout, when the actual amount is charged to the guest's card.
* At checkout, present the itemised bill to the guest and secure a new authorisation for the final total.
* If late charges have been added or if the guest has used express checkout, always post them a copy of the bill.
* Do not re-swipe cards at the point-of-sale terminal unless it tells you to. This ensures that a single charge is not processed more than once.
* Always call for authorisation when the card holder is not present, eg, for online and telephone bookings. An unauthorised charge could lead to a dispute and, potentially, a charge-back.
* Remember to keep all records of sales and charges so that any disputes can be easily resolved.
* Ensure that your trading name appears accurately on the customer's card statement. Guests are more likely to query a charge if it's in the name of a parent company that they're not familiar with.
* If you are ever suspicious, call for authorisation requesting a "code 10".
Contact
American Express Customer Service
Tel: 01273 675533
Web: www.americanexpress.co.uk/merchant
