Preventing Auto Rental Chargebacks
Auto rental companies are stuck dealing with exceptionally high rates of friendly fraud chargebacks. In our previous article, we looked at how rental companies can take advantage of the chargeback representment process to fight back against these fraudulent disputes. As satisfying as it is to recover a chargeback, the dispute has still cost you time and money by that point. It’s better to stop chargebacks before their inception, and there are a number of ways auto rental companies can do that.
Ensure Your Customers Understand Additional Charges
Be transparent with your customers about the charges, fees, and other add-ons they should anticipate paying. In the rental agreement, list all of the additional fees and charges that a customer might incur and have them initial beside each one.
As soon as a customer incurs a charge for incidentals, extras, or overstays, notify them through their preferred communication channel and submit a new authorization for the additional charge. Don't lump all of these charges into a single line item.
When vehicle damage occurs, take photographs and notify the customer as soon as possible.
Once the repairs have been completed, send the invoice to the customer and offer them the opportunity to provide an alternate means of payment. If you have taken these steps and the customer does not respond, you can go ahead and charge their payment card on file.
Use Effective Fraud Prevention Methods
Especially when accepting payment for a rental reservation online, it's important to have effective strategies in place for preventing fraud. This can include simple checks like AVS and CVV matching, AI-driven fraud software, or processes like having the customer scan the chip on their card when picking up the vehicle.
Chargebacks that result from true fraud can't be fought, so it's particularly important to prevent them beforehand.
Satisfy Your Good Customers
Provide excellent customer service, reachable 24/7, and always make the best effort you can to come up with a satisfactory solution when a customer is unhappy. Remember that a refund is always less costly than a chargeback.
Following these tips can help you avoid or neutralize some of the situations that commonly lead to disputes and can provide you with the compelling evidence you’ll need for representment if they end up as chargebacks anyway.
Chargebacks can be a particularly challenging problem for merchants in the auto rental industry. Sticking to tried and true practices can help keep your dispute levels down, but every merchant’s chargeback story is unique. With an analytical, data-driven chargeback strategy in place, rental companies can address some of the core issues that lead to customer dissatisfaction and put meaningful improvements into effect.