Best Practices by Yanolja Cloud Solution to Handle Disputes and Chargebacks

What is a chargeback and why is it a problem for hotels?

A chargeback occurs when a guest disputes a transaction with their bank or credit card provider, resulting in a forced refund to the guest. In addition to the revenue loss, hotels may incur processing fees and penalties. A high volume of chargebacks can negatively impact the property’s merchant account, potentially leading to stricter controls or even account termination.

Managing disputes effectively

Handling chargebacks is often complex and time-consuming. Below are industry best practices recommended by Yanolja Cloud Solution to help prevent and successfully respond to disputes.

1) Focus on the Chargeback Reason

Always address the exact reason for the dispute.

• If the chargeback is marked as fraudulent, simply proving that the guest stayed is not enough.

• The bank requires proof that the cardholder authorized the transaction.

Action:

• Collect strong supporting evidence such as:

  • Signed registration cards

  • Signed Payment receipts

  • Guest communication records

• Ensure your documentation directly aligns with the dispute reason.

2) Verify Guest Identity at Check-in

• Always match the reservation name with the guest’s government-issued ID.

• Ensure the ID and the credit card holder’s name are consistent.

Why this matters:

• Prevents misuse of stolen or third-party credit cards

• Reduces fraud-related chargebacks significantly

3) Prefer Card-Present Transactions

• Always process payments using a physical card machine (POS terminal) instead of manually entering card details.

Why banks favor card-present transactions:

• Chip-and-PIN or tap transactions provide stronger authentication

• Liability often shifts away from the merchant in secure transactions

• Considered lower risk compared to manually entered (card-not-present) payments

4) Capture Guest Signature

• Always collect a signature on the payment receipt, either:

  • Manually (paper receipt)

  • Digitally (signature pad)

Using Yanolja Cloud PMS:

• Utilize the “Sign Document” feature

• Compatible with devices like T-LBK460 or T-LBK57GC signature pads

• Automatically stores:

  • Signed documents

  • Date and time stamps

  • Reservation linkage

Benefit:

• Acts as strong legal proof during disputes

• Significantly improves chances of winning chargebacks

5) Install Front Desk Surveillance

• Install a camera at the front desk covering the payment area

Purpose:

• Provides visual proof that:

  • The guest was physically present

  • The transaction was completed by the guest

Note:

• Ensure compliance with local privacy regulations when using surveillance

Conclusion

Preventing chargebacks requires a combination of process discipline, proper documentation, and leveraging PMS tools effectively. By following these best practices from Yanolja Cloud Solution, hotels can reduce fraud risk, strengthen dispute responses, and protect their revenue.