What are chargebacks and how do you deal with them? A guide for event creators

Chargebacks – where a customer asks their bank to refund a transaction they’re not happy with – can be a nightmare to deal with for businesses for all shapes and sizes. 

As an event creator, you might find yourself particularly vulnerable to chargebacks. Especially if most of your ticket transactions happen online. 

There are lots of reasons that people make chargeback claims – some genuine, some misguided, and some out-and-out fraudulent. Either way, they can be timely and costly to deal with. Especially seeing as though banks tend to favour their cardholders over merchants. It’s estimated that chargeback fraud cost businesses $20million in 2021. Yikes. 

There’s no one way to stop chargebacks from happening altogether. But the more you know about the topic, the better equipped you’ll be to lower their frequency, and deal with chargeback fraud.

What’s in this article?

• What are chargebacks?
• Why do people make chargeback claims?
• What is chargeback fraud?
• Chargebacks and event ticketing – what’s the deal?
• What to do if you face a chargeback 
• Steps you can take to can prevent chargebacks
• How to improve your chance of winning chargeback disputes
• Dealing with chargebacks as an event organiser – closing thoughts

What are chargebacks?

A chargeback is where someone contacts their bank about a transaction they’re unhappy with with the aim of getting the money back. If the bank is satisfied that the money should be refunded, the original transaction is reversed. Which means the bank pulls back the funds from the merchant in order to refund the purchaser.

It’s always the customer’s card issuer/bank that makes the final decision about whether or not to go through with a chargeback. The payment processor (e.g. Mastercard, Visa or Stripe) assists with the process, but they don’t actually have the power to influence any decisions. 

It’s worth noting, too, that payment processors usually charge the original merchant a fee for each successful chargeback. And, if a particular merchant is hit with a lot of chargebacks, the payment processor may even decide to terminate their contract with them. This is why it’s so important to have a robust chargeback management plan in place – more on this below.

Why do people make chargeback claims?

Originally, the chargeback system was created to tackle straightforward fraud (so, someone making an unauthorised payment with someone else’s bank card). But today, the vast majority of chargebacks actually happen for reasons that fall under the term ‘friendly fraud’. 

Some of the most common reasons for chargebacks include:

• A customer buys something online but never receives it.
• A customer is sent the wrong item after buying something online.
• A customer is sent a faulty item, or an item that isn’t as advertised.
• A customer is charged more than once for something by accident.
• A customer feels a service they paid for wasn’t as advertised.

Things get complicated – and tricky – for businesses when customers go through the chargeback process when it’s not really necessary. For example, say you run a club night with a certain name, but your actual business has a different name. If a ticket buyer sees a transaction to your business, and doesn’t recognise the name, they might resort to doing a chargeback with their bank. 

It’s also possible that a customer decides to do a chargeback for a ticket they don’t want, instead of going through your returns or ticket transferral process (if you have one). This is technically a type of chargeback fraud 👇.

What is chargeback fraud?

To complicate things further, some people make fraudulent chargeback claims. This is where they deliberately and knowingly make a chargeback claim to receive a refund, even though there’s no grounds for one. 

For example, in the world of events, this could look like someone buying a ticket for your event, attending it and having a great time. Then, falsely claiming to their bank that they never received the ticket in order to get their money back.

Chargebacks and event ticketing – what’s the deal?

As an event creator, chargebacks can eat into your profits and may even jeopardise your relationship with your payment processor/s.

But unfortunately, events business owners might find themselves particularly vulnerable to chargebacks for a number of reasons:

• It’s harder to prove a ticket has been delivered to the correct recipient than, say, a physical item, where there’s proof of shipping to a specific address.
• Events can be subjective – if someone decides your event didn’t live up to expectations, they might decide they want their money back.
• It’s hard to prove whether or not an online transaction was fraudulent. And it can be hard to prove that the person who attended an event was the person whose bank card was used to buy the ticket.

There are also scenarios where a ticket buyer might make a chargeback claim through a mistake on their end. For example, they might forget that they bought a ticket to your event months ago, see a transaction on their statement that they don’t recognise, and request a chargeback. 

Finally, it’s common for event tickets to be non-refundable. This could mean that if a ticket buyer changes their mind about attending your event, they might try to get their money back through a chargeback. 

Unfortunately, banks are known to take the side of their cardholders over merchants. Which can leave you in a sticky spot. But don’t panic – there are things you can do to both reduce chargebacks and improve your chances of winning disputes over them.

What to do if you face a chargeback 

If you receive a chargeback notice, you have two options:

You can accept the chargeback 

If you believe that the customer has genuine grounds for getting their money back, you can accept the chargeback request. This means the funds for the ticket will be taken back out of your account. And there’ll likely be some fees to pay too.

You can contest the chargeback

If you don’t believe the chargeback claim is fair, you can contest it. You’ll usually be given quite a tight timeframe to do this – around seven to 10 days. You’ll be asked to submit evidence to back up the reasons you have for thinking the claim is unfair. We cover steps you can take to increase your chance of winning a chargeback dispute a bit further down 👇.

Steps you can take to can prevent chargebacks

As an event creator, you might be getting frustrated by the number of chargebacks coming your way. If so – it could help to know that this is really common in the events world, where refund policies can be more complex, and purchases are harder to prove. Thankfully, there are some clear steps you can take to help reduce the number of chargebacks you get:

Provide excellent customer service

Improving your customer service can be a really valuable first step in reducing chargebacks. It’s imperative that ticket buyers can get through to your business quickly and easily so any queries can be dealt with.

For example, say a customer realises they’ve bought a ticket for the wrong date, and so wants to transfer it over to the correct date. If they have to spend hours or days trying to get through to your business to arrange this, they might assume it’s not possible and request a chargeback. Granted that you do offer transfers, the chargeback could have been avoided with better customer service.

Have a clear refunds policy (and make it easy to navigate) 

If your tickets are non-refundable, make sure this is clearly signposted during the ticket-buying process. This might help reduce chargebacks from people who assumed they could get a refund if they wanted to. 

If your tickets are refundable, make sure the process of getting a refund is very quick and easy. If ticket buyers try to get a refund but get lost navigating your system – they might go down the chargeback route instead. 

Create options for ticket buyers who’ve changed their mind

Think about ways you can make life really easy for ticket buyers if they do change their mind or have an issue that means they can’t attend your event. You could make it easy to transfer tickets to another name or date, for example. Or offer advice content on how to re-sell tickets ethically, with recommendations for reputable platforms.  

Don’t make vague promises in your event description

It’s important to make sure your attendees know exactly what they can expect from your event. Although it’s easy to get creative when making promises in your event description, it’s best to avoid saying anything in its description that could be misconstrued. 

For example, promising “an exciting performance from a very special guest” is quite vague. If an attendee felt that the “special guest” wasn’t actually that, well, special, they might feel shortchanged. Even if you don’t agree with them – it can be hard to prove whether or not your event delivered on its promises. In this case, the attendee might file for a chargeback, and the bank could agree with their side of things. 

Provide plenty of useful information and attendee support 

To ensure attendees have the best possible experience of your event, it helps to provide plenty of clear information in the run-up to it. Sending out emails and making sure your website or box office page is full of useful stuff-to-know is a great way to do this.

This should help lower the chance of attendees getting overwhelmed at your event – whether navigating parking or trying to find stages. In turn, this could help to reduce the number of disappointed attendees, and therefore chargebacks. 

Use a payment processor with robust fraud-prevention tools

It’s in your payment processor’s best interests to reduce the number of chargebacks you get. So they’ll be keen to chat with you and let you know what steps they can take to help with this. Most reputable payment processors will have strong fraud prevention tools. For example, Stripe has Stripe Radar, which can detect fraudulent transactions and prevent them before they result in chargebacks.

💡Tip: When you ticket your events with Ticket Tailor, you can use either Stripe, PayPal, or Square to take payments from your attendees.

Use clear billing descriptors

Always make sure ticket purchase transactions appear with a name buyers will recognise on their bank statements. It’s such a simple thing – but could save you a lot of headaches when it comes to avoiding unnecessary chargebacks.

How to improve your chance of winning chargeback disputes

As we covered above, some chargeback claims are made by people who are looking for a way to get their money back fraudulently. Also, some people might think they have a genuine reason to get their money back – and you might disagree. Say if someone says your event wasn’t up to scratch, but you strongly believe it was as advertised.

In cases like these, it’s important to dispute the chargeback – as you may have a chance of winning. To give yourself the best chance at success, there are two main things you can do: 

Always keep evidence

Make sure you’re meticulous with your record keeping for ticket sales and attendee check-in. Using a reliable event registration platform should make this easy. For example, with Ticket Tailor, you can access robust data about your ticket buyers, and our free check-in app makes it easy to keep track of attendance. It’s so important to be able to show that a ticket was delivered to the buyer, and that the ticket was checked in at the event.

You should also keep records of any communications you have with customers. And it might help to keep things like invoices and receipts for suppliers and performers you’ve paid. This could help to prove that your event did include the things you said it would. 

You might also keep records of communications with performers, suppliers and other stakeholders to provide a clear picture of how your event panned out. It may even help to keep records of your online reviews – if they’re overwhelmingly positive, this could help to show that the chargeback claimant isn’t being honest.

Find out how Ticket Tailor can help you deal with chargeback disputes >

Respond promptly and thoroughly

When you get a chargeback notice, it’s crucial to respond within the timeframe given. And it’s also important to provide as much thorough evidence as you can within your first response. This is because not all banks will allow for a second round of dispute. In other words, if they’re unsatisfied with the evidence you provided the first time round, you won’t get another chance.

Dealing with chargebacks as an event organiser – closing thoughts

It’s best to take a multi-pronged approach when it comes to reducing the chargebacks you get as an event creator. Taking measures like improving your customer service, being super transparent with your event descriptions, and making it easy for ticket buyers to transfer tickets can all have a positive impact. 

Avoiding chargeback fraud may be a little trickier. There’ll always be those ticket buyers who try to take advantage of the system and get their money back unfairly. In these situations, the best protection you can give yourself is to have meticulous records at your fingertips. So you’re well prepared to provide evidence if you need to dispute a chargeback notice.

A ticketing partner that’s on your side

All of this 👆can be made easier with a robust ticketing platform that genuinely cares about helping event creators thrive. That’s where Ticket Tailor comes in. Our platform is low-cost and packed with useful features that make record-keeping seamless. Plus, our free check-in app lets you access live reporting on attendee numbers, monitor check-in progress with overview stats, use filters to organise door lists and much more. 

If you need evidence to help you backup a chargeback dispute, Ticket Tailor will provide you with:

• A copy of the order confirmation.
• A copy of the event confirmation email sent to your ticket buyer.
• A check-in report showing the ticket was checked in.
• If you have your refund T&C’s in your checkout form, you can download an export showing your customer accepted your refund terms.

If you’d like to learn more about how we can help you keep records that could be used to dispute chargeback claims, feel free to get in touch and our team would be happy to help you.

👀Keep reading

These related guides might be useful:

• Advice for responding to disputes and chargebacks on Stripe
• Advice for responding to disputes via PayPal
• Advice for responding to disputes via Square