The issuing bank determines the outcome of credit card disputes (chargebacks).
An issuing bank is the financial institution that issues a credit card to the cardholder (your guest's bank).
The most popular networks are: Visa, Mastercard, American Express, and Discover. American Express and Discover are both issuing banks (issue their own credit cards) as well.
Stripe, Square, and PayPal are just a few examples of payment facilitators.
The vendor who sells services/goods (you). If you use a payment facilitator, it may technically be a shared merchant instead of a "traditional" merchant account with your bank. For simplicity, consider yourself the merchant even if your payment facilitator is the "merchant of record."
Whether you are a restaurant owner or sell jewelry at art festivals, when you accept credit cards, the cardholder can file a credit card dispute (chargeback) with their bank.
Have you ever noticed hosts say an Airbnb rep. told them they cannot charge a guests credit card without their permission? What about owners who said their Vrbo guest agreed to their cancellation policy but still won in a chargeback dispute?
The credit card networks (VISA, Mastercard, Discover, American Express) set certain policies that merchants must abide by when accepting their cards. And these policies can vary between industries. One of these policies is how a cancellation policy should be presented to the credit card holder.
Some owners have lost chargeback disputes because they did not follow the credit card network policies. But who reads through all that fine print?
The card network may have required the merchant to obtain the card holder's signature within so many inches of the cancellation policy. This information could have been buried on page 50. And the host was told a signature at the very bottom of the rental agreement was not sufficient to meet the card network's requirements.
Always require Id of the credit card holder so the guest does not claim the transaction was not authorized. Include a signature line within less than an inch of your cancellation policy. Bold some of the text so the font is conspicuous as well. It's much more difficult for a guest to dispute they overlooked a policy like this:
The above will wipe out 95% of issues. Guests will still often ask what their cancellation options are, even after agreeing to your policies. And you are always free to override your policy and make an exception.
Both Stripe and Square have their own best practices for fraud and chargebacks.
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