Learn about disputes and how HoneyBook can help if your business encounters them. Understand tips that may help you establish a stronger relationship with your client to prevent disputes from occurring, and what information is needed to challenge chargebacks.

As a small business owner, it’s not uncommon that you’ll encounter disputes at some point within the lifecycle of your business. Miscommunications with customers, cancellations, and even clients attempting to receive services free of charge can all lead to unwanted chargebacks.
To ensure you’re getting paid for your hard work, you should be using a payment processor that can protect you from disputes. Fortunately, HoneyBook has the opportunity to aid you in the dispute resolution process and can help take action on your behalf.
As a Disputes Specialist here at HoneyBook, I help our members work through all sorts of disputes every day. From simple misunderstandings to clients-gone-rogue, I wanted to share some tips we’ve picked up along the way that we pass on to HoneyBook members when they receive disputes, and best practices to help mitigate them.
Jump to:
- Understanding different types of disputes
- Protecting your business against chargebacks
- Evaluate and establish trust
- Determine who will be making payments
- Maintain communication
- Communicate what to expect on a CC statement
- Document proof of services
- Send legally binding contracts
- Receive verbal agreement
- Include cancelation dispute clauses
- Expire files if a client cancels
- How does HoneyBook handle disputes?
Understanding different types of disputes
Clients can file disputes regarding credit card purchases or payments made via ACH bank transfer through HoneyBook. When filing disputes, the cardholder’s bank will ask them to choose a reason for the dispute, which can be any of the following:
- Credit not processed
- Duplicate
- Fraudulent
- General
- Product not received
- Product unacceptable
- Subscription canceled
- Unrecognized
- Debit not authorized
Credit card disputes
Credit card disputes are the most common type of disputes. They occur when a cardholder initiates a dispute on a payment made through their credit or debit card. As the merchant, you have the opportunity to respond to credit card disputes if you believe they were incorrectly filed. That’s where HoneyBook steps in to help – we’ll touch on this later.
Bank transfer disputes
Bank transfer disputes are a bit different. They occur when a bank account holder initiates a dispute on a payment they made via ACH bank transfer. Unfortunately, issuing banks do not allow the option for merchants to fight chargebacks associated with ACH transfers, and they are counted as an automatic loss. While more rare, bank transfer disputes do still happen.
Protecting your business against chargebacks
Although disputes can happen to any business owner, there are steps you can take to avoid them altogether and deal with them more quickly. Use these nine tips before you start projects and as you’re accepting payments to successfully protect your business.
1. Evaluate and establish trust with your client
Before you begin a project, it’s important to get to know your client. By building this into your process, it’ll benefit your overall work process. You can ensure you’re a great fit for their needs while protecting your own safety as well.
Meeting your potential clients in person (or virtually) to conduct consultation calls is one way to vet the legitimacy of your client and understand their needs. While you’re evaluating their fit for your business, consider if they’ve worked with other types of businesses or have the budget to be able to move forward.
2. Determine who will be making payments
When you’re ready to book with someone, you should also understand who will be making payments before you even send your first invoice. One common cause of disputes is “friendly fraud”; when a friend or relative of your client makes a payment on your behalf (or your client uses someone else’s card to make their payment).
Friendly Fraud: When someone else pays for services on behalf of someone, then issues a dispute if they forget about the charge or don’t recognize it on their statement.
When this happens, the cardholder might not recognize the charge on their statement or forget what the charge is for. This can lead to the cardholder initiating a dispute for payment towards your services. Before you accept payments, be sure to avoid miscommunication and make sure you’re both aligned on where the payments will come from.
3. Maintain a solid line of communication with your client
It’s imperative to keep a paper trail of your work and communication with your client. In the event of a dispute, messages are a strong source of evidence, whether it’s an email or text message. These messages are documentation that show you and your client have kept a close line of communication throughout your working relationship.
When banks review disputes, they’ll look for indications that the cardholder (your client) connected with the merchant (you) regarding the charge. If you have that evidence, it will validate it and increase the chances of resolving the dispute in your favor. Always ensure you’re following up with emails, recording virtual meetings, keeping text messages, and establishing timelines to keep track of work.
4. Make sure your client knows what to expect on their CC statement
Before your client makes their first payment, make sure they know what your business name will look like on their CC statement. This is important since it might show up in an abbreviated way, and they may not recognize it. If your client mistakes your business for fraud, it could lead to “friendly fraud,” where they mistakenly file a dispute.
While HoneyBook always includes your full business name in statement descriptors for payments, oftentimes, credit card companies will abbreviate or shorten your business name. It could end up showing fewer characters than it actually is, especially if your client views their statement on mobile. A great precaution to take would be to inform your client or the cardholder that your business name may appear shortened or abbreviated on their statement.
5. Document proof of services
Your proof of services could serve as vital evidence to fight back against disputes if they happen, so be sure to create a visual log of the work you provide. Some examples of documentation might include:
- Photos at your event
- Photos of a product you provide
- Client satisfaction questionnaires and answers
- Screenshots of communication with your client about your services
All of this documentation and evidence can help reinforce your deliverables, and in the case of a dispute, demonstrate to the bank that you’ve followed through.
If you are shipping a physical product to your client, organize tracking on the item to ensure a record of its delivery. Specifically, if you register for tracking on products sent through mail, you can mitigate “product not received” disputes. If a client claims a product is lost, you’ll be able to use the tracking history to help challenge their dispute.
6. Send strong, legally binding contracts through HoneyBook
Always send a contract through your HoneyBook project. This is one of the single most important sources of evidence banks look for when they review disputes. Contracts show banks that your client is legally obliged to make payment(s) to you for your services, and it can often render any disputes inapplicable.
Download free contract templates
In need of contracts? Use HoneyBook’s free templates to download or add into your account. Just drop in your language and send to your clients to stay protected.
Explore Contracts7. Review your contracts and receive verbal agreement
Oftentimes, it’s not enough to just send your client a contract and wait for them to sign. Your client might just skim through and miss important sections and clauses. Instead, you want to make sure to avoid any excuses your client might make about not reading your agreement.
As another tip, sending your contracts through HoneyBook can ensure that you require clients to look over the most important parts of your agreement. You can include fields where clients have to initial so that they can’t move forward without doing so. This helps point them to the specific portions you want to highlight, which can help avoid disputes in the future.
8. Include a cancellation/and or dispute clause in your contracts
While a cancellation or dispute clause in your contract cannot prevent clients from filing disputes, it may deter your client from initiating them. Including a clause will make your terms clear on what to expect in the event of a cancellation.
Cancellation clauses can help outline and reinforce your terms for refunds if a service or event is canceled. You can also set expectations for your clients that you will challenge disputes if they decide to dispute a non-refundable payment.
9. If a client cancels, be sure to expire their files
This is a recommended step for HoneyBook members, especially if your client agreed to auto-pay or were on a recurring payment plan while you were working together. If they choose to cancel, they could still get charged for the next payment automatically unless you expire their project in HoneyBook. This can lead to unnecessary disputes if a payment processes for services they’re no longer expecting.
How does HoneyBook handle disputes?
HoneyBook is here to help you with any and all disputes you may encounter. If you receive a dispute, we will send you an email notification, and a Dispute Specialist will be in contact with you via phone typically within the same day. We’ll communicate with you to understand what may be going on with your customer and walk you through the next steps.
If you choose to contest the dispute, we’ll guide you through the process of collecting evidence and even craft and submit a response to the bank on your behalf. As your partner, we want to allow you to leverage our years of experience fighting disputes and help increase the chances of winning your case. We’ll be sure to keep you closely updated on your case and let you know as soon as there’s a resolution.
HoneyBook also works with external partners and processors to deploy many layers of fraud protection for you in our payments system. This includes CVV checks, payment authentication, and cardholder identity checks to ensure that your payments are processed safely.
While we cannot stop your clients from filing disputes (this is an action taken independently with their credit card company, and is a risk when processing any sort of payment online), we do have checks in place to ensure we catch anything that doesn’t look quite right.
Set expectations upfront to prevent chargebacks
As a final recommendation, we strongly encourage you to send your clients contracts within your projects, whenever possible. Specifically, including cancellation or dispute clauses up front can help set expectations with your clients. In the case of a dispute, it’ll also strengthen your response to the bank. Initialed or signed clauses like these can help the bank understand that your customer is liable for making the payment to you.
We all hope that every project will go smoothly, but it just isn’t always the case. The best thing you can do is communicate with your clients effectively from start to finish. Set expectations and continue to remind them about your policies, so you can focus on your best work.
Protect your business with HoneyBook
HoneyBook offers contracts, secure payment processing, and 1:1 support for payment disputes. See how HoneyBook can protect your business!
Start free trialDisclaimer: The advice featured in this blog post was sourced from our HoneyBook Disputes Specialists for sharing general information and knowledge. For specific financial or legal information and advice, please consult an authorized professional.