Chargebacks and Disputes: the silent profit killers

Seven steps every haunt owner should know

Have you ever had this experience? You’re balancing the books, tallying up revenue from tickets, merch, and concessions, only to find that your bank has yanked money out of your account: reversing the revenue you earned on several ticket purchases. WTF.

You, my friend, have just discovered the pain of chargebacks (or as we refer to them, disputes). They strike without warning and can kill a business faster than you can say boo.

A chargeback happens when a cardholder calls their credit card company and says a charge to their card was illegitimate or fraudulent. They can happen for any number of reasons, but the most common causes are:

  1. The cardholder didn’t authorize the charge or doesn’t know what it’s for.
  2. The cardholder’s card was lost or stolen.
  3. The purchase was intended but the merchandise or service was never received.

Cardholders usually have up to 60 days to submit a chargeback after a transaction goes through, but have even more time (3+ months) in certain circumstances. So you might encounter one weeks or even months after recording that revenue into your books. 

Banks give the cardholder the benefit of the doubt in these scenarios. So the burden of proof is on you, the merchant, to prove a transaction was NOT fraudulent in order to get your funds back. Chargebacks are really tough to fight on your own, not to mention time-consuming. The only way to fight a chargeback is to provide proper documentation of the disputed transaction.

Several years ago, back when HauntPay was first getting started, we had a client come to us who was losing tens of thousands of dollars each season to chargebacks.

Yikes. Talk about scary. 

Thankfully, we were able to dramatically reduce the number of chargebacks their haunt encountered within their first season with us. At HauntPay, we’ve made it our mission to prevent chargebacks from destroying our clients’ hard-earned profits. Here’s how we fight chargebacks and what you can do to keep them from killing your business.

(If you’re already using HauntPay, you can just sit back and relax. We automatically fight chargebacks for you.)

Step 1: Minimize Opportunities for Fraud Online

The best way to fight a chargeback is to stop it from ever happening in the first place. 

Since most credit card fraud happens online, rather than in person, we use a one-two punch of state of the art artificial intelligence systems, comparison to databases tracking fraudulent transactions around the web in real-time, and human review to identify potential fraud in online ticket sales, and block those transactions from happening or reverse those transactions immediately if they’ve already occurred. 

We then have the ability to ban users, card numbers, devices, or IP addresses we’ve identified as fraudsters so they can’t strike your business again in the future. We analyze over 1,000 different data points on every transaction to rate its risk level, and match extended information such as the CVV/CVC value (usually on the back of a credit card), street address, and zip code for hard blocks when necessary. If they don’t match, the transaction is rejected. 

We also have real people on our team scour every transaction flagged for potential fraud and immediately reverse any purchases that look suspicious, while disabling those tickets, before they become a chargeback.

Click here if you want to learn more about the details of how we weed out fraud in real time.

Step 2: Limit the Number of Tickets 

Fraudsters favor high dollar value transactions; it’s just not worth the risk for a couple of $30 tickets. By setting a maximum number of tickets per purchase, you limit the size of a potentially fraudulent transaction (to say, 5 tickets instead of 500). 

This doesn’t prevent you from selling tickets to large groups. It just requires the purchaser to get on the phone with you (something few fraudsters would be willing to do) and gives you the opportunity to upsell them on additional experiences or perks for their group.

Step 3: Save Both Addresses

You should require customers to enter their physical address associated with the credit card they use online (we do this by default on HauntPay), but that is not the only address you need from them! You should also record a transaction timestamp and customer IP address for every single transaction (again, if you’re already using HauntPay, we do this for you). 

In e-commerce, an IP address can be as good as a signature. The card issuer always keeps a record of the IP address of the card-holder. If that IP address matches the one you have on file it’s an easy win.

Step 4: Provide the Purchase Immediately

Overactive spam filters, accidentally deleted messages, and misspelled email addresses can prevent a customer from receiving tickets or other purchases emailed to them.

At HauntPay, we provide printable/downloadable tickets immediately upon the completion of an online purchase. An email backup is also sent to the purchaser, but providing the ticket immediately upon order completion avoids overactive spam filters or other reasons for possibly not receiving the tickets. If someone completes a purchase, they also receive their tickets.

Step 5: Keep Those Receipts

This applies to both online and in-person sales. The more details the better, especially when a customer says they didn’t receive what they purchased. When a copy of the receipt they received can be shown, it’s often enough to eliminate any doubt that they got what they paid for. On HauntPay, we keep track of receipts for you automatically!

Step 6: Get Their Autograph

If a transaction is done in person, we provide the ability to gather a signature directly on the mobile device during the checkout process. A customer can simply sign with their finger. When a signature of the cardholder can be produced, that cardholder was likely present and in possession of their card.

We also provide the option for venues to require a signature on their tickets. This can be valuable for limiting legal liabilities by having customers sign directly on the ticket, stating that they understand the purchase and your event terms.

Step 7: Respond to the Chargeback Notice

When a customer initiates a chargeback, we’ll let you know in your dispute report (launching next week!) or by email notification (if you have those turned on) as soon as we hear. The card-issuing bank will immediately withdraw the transaction amount and a $15 chargeback fee from your account. But don’t worry: we’ll automatically fight the dispute for you and you’ll get the disputed amount and fee back if we win.

If you have any additional information at all about the transaction and card-holder, we want to know! Hit reply to the notification email (if enabled) or drop us a note at with any additional info you can provide. We love hearing about a discussion you had with the client explaining a no refund policy, security cam photos of them entering, and anything else you can supply to prove the person who purchased the ticket was actually there.

You’ll have 10-days to send us information to include when we fight the dispute, but the quicker the better. 

In the case that you receive a chargeback while using HauntPay, we have you covered.

We do this by using some of the most advanced AI and human-powered systems out there to identify the bad guys and block fraudulent transactions from happening in the first place, and by keeping the right information and automatically fighting any chargebacks that do come in. This process has helped us reduce losses due to chargebacks by than 80% for our clients!

To get started with HauntPay, click here.