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Navigating Chargebacks and Disputes: How To Avoid Them and What to Do If You Get One

Man and kid on a jetski

We know just how frustrating chargebacks and disputes can be for small businesses. While they can stem from various reasons, miscommunication is a common culprit.

At Recreogo, our goal is to equip you with insights on how to minimize chargebacks and, if they do occur, how to effectively reply. 

Understanding Chargebacks and Disputes

Customers may initiate chargebacks for various reasons, often rooted in miscommunication or dissatisfaction. Common factors include:

1. Miscommunication: Customers may not recognize charges or feel they didn't receive the product or service as described.

2. Disagreement with Charges: Customers may perceive overcharges or feel entitled to a refund that wasn't issued. For example, they may think that they are entitled to a refund despite canceling outside of your cancelation window.

3. Fraudulent Activity: Customers might flag charges they believe are unauthorized or fraudulent.

Stripe will notify you should a dispute happen, and you’ll have 7 - 21 days to accept or refute the chargeback.  It will also show on your main page within your Stripe Account.  

The funds in question will immediately be withdrawn from your account and you will have the chance to earn them back by submitting compelling evidence proving that you are entitled to those funds. It’s important to note that credit card companies will often side with customers if you respond with vague information.  You will also be charged $15 non refundable admin fee for each chargeback. 

Your Defense Against Chargebacks Starts with Prevention

Build Out Your Listing

An important step in avoiding disputes is to ensure that your listing on Recreogo is clear and up to date with your policies and terms and conditions. Recreogo’s platform is built to ensure there is a digital paper trail and can help protect your business in case of a dispute, therefore it’s crucial to build the foundation of your listing with the following:

  • Rental Agreement/Terms and Conditions: Ensure that you have a comprehensive rental agreement/terms and conditions in Recreogo. Before checking out customers must check a box they have reviewed and agree to these terms as they have been presented.  The agreed upon policies are stored with the reservation under Term Conditions.

  • Cancellation Policy: Similar to the rental agreement, on the checkout page the cancellation policy is presented to the customer in an orange info box informing them of your cancellation policy. Make sure that you clearly state your cancellation policy, including information on potential refunds.

  • Description: This is the default view where the customer can see rental information such as description of the item, rates, cancellation policies, damage deposit authorization and general policies. 

  • Policies: This may seem redundant, but we recommend including all general and cancellation policies in this section as well. In this case it’s never a bad thing to over communicate.

  • Special Notes:  This is an opportunity for you to include your policies and special reservation details in the customer’s confirmation email.  These will get embedded into the email providing the customer with another written version of your policies. 

  • Questions:  Questions are optional, but if you decide to make them mandatory, the customer will have to answer the question(s) before they proceed with checkout.  Failure to answer will not allow them to proceed.  When answered, and reservation is complete, these answers are stored with the reservation under the questions tab. Samples of these could include “I understand that the cancellation policy on this rental is 48 hours prior to the rental start date” or “”I understand that a non-refundable fee of $100 may be charged if I cancel after the cancellation date of 48 hours prior to my rental”

  • Digital Waiver via Smartwaiver:  Streamline the check-in process and enhance legal protection with online digital waivers through our integration with Smartwaiver. Your customers can conveniently sign your waivers electronically, where they will be recorded and stored within both the Recreogo Reservation Portal and Smartwaiver Portal, giving you two points of reference.

  • Vin Number:  A unique feature of Recreogo designed for the powersport industry, you can assign specific VIN numbers to reservations to associate rented units, enhancing visibility and accountability.

  • Damage Authorization:  This is where you can determine an amount that you want to authorize on a renters card (per rented unit) in case damage is incurred.

Encourage Online Bookings

Another proactive measure you can take is steering customers toward making their own online booking. Recreogo’s online booking system is meticulously designed to educate customers throughout the process, creating a digital paper trail that protects your business and ensures customers have access to all relevant information before proceeding. 

If phone bookings can’t be avoided, note that you will lose the leverage of Rental Agreement/Terms and Conditions, Cancellation Policy, Questions and Policies being presented digitally, and must rely on staff to review these verbally.  However, the customer will still receive Special Notes and Digital Waiver electronically.

Reservation Management: Strengthen Your Position

Once you’ve built the foundation of your listing you can utilize Recreogo to strengthen your position should any disputes occur.

  • Upload Photos:  Ensure that you have documentation in case of damage. Upload before and after photos of your equipment, as well as photos of the damage and the VIN or Unit Number and attach them to the reservation.    

  • VIN Numbers:  As mentioned, within the system you can assign specific VINs to the reservation to increase the visibility and accountability as to which units go out with each reservation. This will ensure transparency for both you, and the customer, should damage incur.

  • Checkout and Authorization:  When a customer arrives, initiate the check out process and authorize their card for the damage deposit.  A soft hold is placed on the customer’s card and their reservation will move to Inventory checked out status.   When the customer returns the item and there is no damage you can simply release funds and the authorization is removed within 24 hours.  In a case where there is damage, the damage authorization amount can be charged.  A reason code needs to be entered with the final amount and an email is sent to the customer regarding the charge.

You Got A Dispute. Now What?

We know that it’s not a fun feeling to see a dispute notification come through. But if you’re equipped with the right tools, you can feel confident in your rebuttal.

The most important thing is to stay calm. Getting upset isn’t going to help the matter. Instead, get together with your staff (and anyone who dealt with the customer) and discuss any specifics that might have been attributed to the chargeback. Is it warranted or should it be disputed?

Next, call the customer. In many cases disputes are a simple misunderstanding and can be cleaned up by having them withdraw the chargeback dispute with their credit card company. 

Responding to Disputes: Proving Your Case

If the dispute is not withdrawn and you intend to refute it, the burden is on you (the business owner) to prove the following:

  • The card holder made the charge and authorized the purchase.

  • The card holder understood your cancellation and refund policy at the time of purchase.

  • The card holder received services/products as stated.

From our experience, and from guidance on the Stripe website, here are the best practices for replying to a dispute.

Step 1: Open the dispute response form and click “Counter Dispute” to open Stripe’s dispute response form.

Step 2: Give Stripe your side of the story. In the first page of the Dispute Response form, tell them why you believe the dispute is in error and the product type of the original purchase. This information, along with the dispute category, helps Stripe recommend the most relevant evidence to support your challenge on the next page of the form.

Step 3: Assemble Evidence. Gather any and all information/communication with customers which allows you to build a compelling argument.  Include: relevant screenshots with circles and arrows pointing to relevancy, policies, communication between you and customer, photos of damage, police reports, etc. 

And, make it easy. Create a singular PDF file with all the gathered information, screenshot and details regarding the charge.  Be sure to format for easy reading and use circles, highlighting, and arrows to point key pieces of information.  

Step 4: Review that you have attached all files and filled out all sections with as much detail as possible. You have only one opportunity to submit your response. Stripe immediately forwards your response and all supporting files to the issuing bank and you can’t edit the response or submit additional files, so make sure you’ve assembled all your evidence before you submit.

Step 5: Submit evidence: Click the checkbox to acknowledge your understanding that your response is final. After you submit it, Stripe automatically puts the evidence you provide into a format accepted by the issuing bank and submits it for consideration. At this point, you can’t amend what you’ve submitted or provide any additional information, so make sure to include every relevant detail.

Then, wait patiently for the results. Once the dispute has been arbitrated and a decision is made you will receive an email notification and it will also show on your Stripe Dashboard. If you win, the funds will be deposited into your bank account.  Please note a customer could reopen the case, but we have not seen this happen often. If you lose, the funds will not be returned to you and you will not have the ability to reopen or re-dispute.

Empowering Your Business Against Chargebacks

Snowmobile in a forest

Chargebacks are a challenge, but by implementing preventive measures and having a strong response strategy in place, you can safeguard your powersport rental business. Clear communication is crucial, so ensure your terms and conditions are current, and from there, simply focus on what you do best – delivering an amazing customer experience.

Remember, the key to success is not just in the ride but in the journey you provide for your customers.


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