Coronavirus Pandemic To Date and Trends
Last month, the initial report I found showed the US had close to 3,500 people who had tested positive for the coronavirus and at least 66 deaths. Just 29 days later, the United States has the most confirmed cases globally at over 632,878 and close to 28,000 people have died. Our way of life has changed, and we’re warned that the worst is yet to come. But we need to be prepared to deal with the daily changes now and have a plan when guests can visit their favorite destinations again.
There’s no need to summarize what we’ve all been going through these past weeks as we’re all quarantined to some degree, watching the same news networks, and perhaps taking a break to watch “Tiger King” on Netflix. During my quarantine induced reading, here are some highlights of what I’ve seen:
- “Fly to” destinations have dropped in favor of increase interest in “drive to” destinations.
- Short Term Rental business models have looked at Long Term Rental business models with families looking to self-quarantine together.
- Private residences with kitchens are preferred rather than hotels in order to get their own groceries to cut costs.
- Preferences for remote locations rather than urban.
COVID-19 has had an impact on almost every vertical, either directly or indirectly, but the hardest hit are those merchants in the travel industry. Cancellations, refunds, and chargebacks are what most merchants in this sector have been dealing with in these past few weeks, and most likely will be dealing with in the next few months. Cancellations and refunds are self-explanatory. During these times we suggest being as flexible as possible. Chargebacks, though, is a whole different subject matter.
The most relevant COVID-19 related chargebacks:
- Cancelled Services / Credit Not Received
- Services Not Rendered / Provided
Merchants need to be ready for the increase in chargebacks. More chargebacks will lead to lost revenue with fees and fines if not handled properly, as well as increased aggravation dealing with customer support that may not be as experienced as the support staff at Ascent Processing. We sent our clients an in-depth tutorial on handling chargeback requests, which you can read about here:
Chargeback management can be a complicated, fragile process. Having the wrong strategy can prolong the individual case, placing more revenue at risk. Paul Guccione, CEO for Ascent Processing Inc., recently went over chargeback tips in a webinar hosted by one of our partners Lexicon Travel Technologies. He goes in depth on the best practices to handle chargebacks companies are dealing with now, as well as what they can do to protect themselves in the future.
During the webinar, Paul discusses the importance of being a Merchant of Record (MOR) where you have more control of policies and business practices that best fit your company’s needs. Having more control translates to faster deposit times of your funds, control of your cancellation and refund policies, as well as effectively protecting yourself against chargebacks with the correct verbiage.
Paul also advises merchants to see if their payment processor offers Net Billing like Ascent. When refunds are processed, most merchants won’t see the Interchange associated with that charge refunded back to them. Considering the size of the ticket, that amount refunded can help lessen the impact from the lost revenue.
With everything going on in the payments ecosystem, so many changes are occurring right now. We’ve heard of merchants’ funds being held without notice, as well as new businesses transferred to the prohibited list due to the newfound risks involved with a global pandemic.
To see the webinar and learn more in depth of the ways to fight chargebacks and better prepare yourself, please click here.
Finally, as merchants in the travel industry, be prepared and continue using the time you have to respond to chargeback inquiries and better prepare your company to be stronger once this is all over. Take proactive action with more flexible refund policies during this time, communicate with your guests, take action on chargebacks you get (don’t ignore them!).
With most businesses closed and people in quarantine, use this extra time to better prepare yourself with your polices and infrastructure concerning who your payment processor is. Reach out to them for help, get your questions answered, and take care of the resolution as soon as you can. The chargeback process has limited timeframes during which you can address the dispute, so don’t ignore it. Visa has provided some updates regarding chargebacks during COVID-19 and ASCENT’s team can help you with the latest information to address disputes.
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Who Ascent Processing Is
Ascent Processing has more than 20 years in the payment processing world, specializing in the vacation rental industry. It’s more than just offering better rates. We provide payment regulation expertise, innovative FinTech solutions, the highest level of security concerning data breaches, and customized chargeback and support services for the top reservation software providers and the leading property managers in the alternative lodging space.
Scott Lim is the Business Development Manager for Ascent Processing, Inc. He has over 18 years in the payments industry, working in all facets of the FinTech ecosystem. To submit related topics or questions, please reach out to him at Scott@AscentProcessing.com