Disputes and Chargebacks

How to handle customer disputes and prevent chargebacks effectively.

Disputes and Chargebacks

Understanding how disputes work and how to handle them effectively is crucial for protecting your business and maintaining good customer relationships.

Internal Disputes vs. Stripe Disputes

Internal Disputes (Parked Funds)

When a customer disputes a post-hire charge through Parked Funds:

  • They submit their dispute with evidence
  • You review and respond through the dashboard
  • You can accept, reject, or adjust the charge
  • No chargeback fees apply
  • Faster resolution (typically 1-3 days)

This is the preferred method because it's faster, cheaper, and preserves customer relationships.

Stripe Disputes (Chargebacks)

When a customer disputes directly with their bank:

  • The bank contacts Stripe
  • Stripe notifies you
  • You have limited time to respond (typically 7-21 days)
  • Chargeback fees apply ($15-$25 per dispute)
  • Longer resolution time (weeks to months)
  • Can impact your Stripe account if you have too many

Preventing Disputes

Clear Communication

  • Set expectations upfront: Explain charges in your rental agreement
  • Send preview emails: Always let customers know about charges before processing
  • Provide evidence: Photos, invoices, and clear descriptions
  • Be responsive: Answer questions quickly

Best Practices

  1. Document everything:

    • Take photos before and after rentals
    • Keep receipts and invoices
    • Save all customer communications

  2. Be fair:

    • Only charge for legitimate issues
    • Use reasonable amounts
    • Consider wear and tear vs. actual damage

  3. Respond quickly:

    • Address customer concerns promptly
    • Don't let disputes escalate unnecessarily

  4. Use clear descriptors:

    • Make sure charges appear clearly on statements
    • Use recognizable business names
    • Include booking references

Handling Internal Disputes

When a Customer Disputes

  1. Review the dispute:

    • Read the customer's explanation
    • Review their evidence
    • Check your evidence and documentation

  2. Make a decision:

    • Accept: Cancel or adjust the charge if the customer is right
    • Reject: Proceed with the charge if your evidence is strong
    • Adjust: Modify the amount if a compromise is appropriate

  3. Respond professionally:

    • Explain your decision clearly
    • Reference specific evidence
    • Offer to discuss further if needed

Tips for Winning Disputes

  • Strong evidence: Clear photos, invoices, and documentation
  • Clear policies: Reference your rental agreement terms
  • Timely responses: Don't delay your response
  • Professional communication: Be respectful and clear

Handling Stripe Disputes (Chargebacks)

When You Receive a Chargeback

  1. Don't panic: Chargebacks happen, even to good businesses
  2. Gather evidence: Collect all relevant documentation
  3. Respond within the deadline: Usually 7-21 days
  4. Submit strong evidence: Photos, invoices, agreements, communications

Evidence to Submit

  • Photos: Before/after photos of damage
  • Invoices: Repair or service invoices
  • Agreements: Rental agreement with customer signature
  • Communications: Email threads showing customer acknowledgment
  • Receipts: Proof of services or repairs
  • Timeline: Clear timeline of events

Chargeback Reasons

Common reasons customers file chargebacks:

  • Fraudulent: They claim they didn't authorize the charge
  • Product not received: They claim they didn't receive the service
  • Product unacceptable: They claim the service wasn't as described
  • Duplicate: They claim they were charged twice

Prevention is key: Most chargebacks can be prevented with good communication and evidence.

Dispute Resolution Timeline

Internal Disputes

  • Customer submits: Immediate
  • You review: 1-3 business days (recommended)
  • Resolution: Typically within 1 week

Stripe Disputes

  • Customer files: Immediate
  • You're notified: Within 24 hours
  • Response deadline: 7-21 days (varies by reason)
  • Resolution: 30-90 days (varies by bank)

Chargeback Fees

Stripe charges a dispute fee (typically $15-$25) for each chargeback, regardless of the outcome. This fee is:

  • Charged when the dispute is created
  • Not refunded even if you win
  • Separate from the charge amount

This is why preventing disputes is so important.

Monitoring Disputes

In your Parked Funds dashboard, you can:

  • See all open disputes
  • Track dispute status
  • View dispute deadlines
  • Access evidence and communications

Tip: Set up email notifications so you never miss a dispute deadline.

Frequently Asked Questions

Q: What's the difference between a dispute and a chargeback?
A: A dispute is when a customer questions a charge through Parked Funds. A chargeback is when they dispute directly with their bank.

Q: Can I prevent chargebacks?
A: You can't prevent all chargebacks, but good communication, clear policies, and strong evidence significantly reduce them.

Q: What if I lose a chargeback?
A: The charge is reversed, and you lose the dispute fee. You can still try to collect from the customer through other means, but this is often not practical.

Q: How do I win a chargeback?
A: Submit strong evidence (photos, invoices, agreements) within the deadline. The clearer your evidence, the better your chances.

Q: Can I charge a customer again after losing a chargeback?
A: Technically yes, but it's usually not practical and may lead to another chargeback. Focus on preventing disputes in the first place.

Q: What's a good dispute rate?
A: Aim for less than 0.5% of transactions. Stripe may review accounts with rates above 1%.