9 Ways to Prevent Chargebacks Before They Happen

Woman entering credit card information on a laptop

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. 

Woman entering credit card information on a laptop

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 

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. 

7. 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. 

Disclaimer: 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.

Try This Simple System for Creating Batch Content 

Independent plans content for batch with coffee, notebook, photos, and laptop.

Content creation doesn’t have to be difficult. Our content creation system will help carry the heavy load that is nurturing your audience (and attracting new clients!)

Independent plans content for batch with coffee, notebook, photos, and laptop.
What’s your content batching strategy?

As an independent business owner you’re probably already using content as a key piece of your marketing strategy. And why not? It’s low-cost if not free, and can reach a wide range of people, plus, it allows you to showcase your personality. 

This means the people who decide to work with you are not only investing in your skills but also in you as a person. Honestly, the benefits of content marketing are endless. But there is one major drawback — how time-consuming it is, especially when you don’t have the budget for a marketing team. The good news? By creating a simple system for batching content creation, you can streamline this process and cut back on the time you spend marketing. 

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The feast or famine content cycle

It’s likely that since you started content marketing, you’ve found yourself stuck in the content feast or famine cycle. It starts with creating consistent content, which attracts your ideal clients who start booking with you. Soon enough, your client roster is full and you couldn’t be happier. But with all that time spent working so diligently to serve your clients you naturally had less time to create content. 

Initially, this doesn’t seem like a problem because your schedule is full. However, once you start offboarding these clients you realize that your pipeline has slowed to a trickle of new inquiries. So, with your newfound time after offboarding those previous clients, you start creating content again. And, again, the clients begin to roll in. This leads to a full plate, and no time to create any more content…you see where I’m going with this. The cycle goes on and on.  

You find that just can’t seem to make time to both serve your clients well AND market your business to keep the pipeline full. You know marketing is important, but you also know that providing your clients with an exceptional experience at every stage is even more important. 

At this point, you have two options. You can either set aside some of your revenue to hire someone with your content creation like a social media manager or virtual assistant for example. Or you can adopt a system that will allow you to create consistent content without losing time with your clients (all while investing dollars elsewhere). Sound too good to be true? Let me introduce you to content batching. 

What is content batching? 

If your first thought was that you’ve tried batching in the past, but it just doesn’t work for you, I want you to imagine the last time you made a batch of cookies. You pulled out all of the ingredients that you needed, along with all of the tools. You preheat the oven and then get to work. 

Imagine putting just enough ingredients into your mixer for a single cookie. You mix up the dough for that cookie and roll it into a ball. You place that cookie on the baking tray and bake it for ten minutes before pulling it out of the oven and placing it on the cooling rack. Then, you do the same for cookie number two, and then cookie number three. On and on until you’d spent 120 minutes baking 12 cookies. When it could have taken you ten minutes to bake the same 12 cookies. 

Okay, you’ve probably never actually baked 12 cookies like that, BUT, if batching didn’t work for you in the past, you were likely trying to create content in the same way—piece by piece (or, cookie) instead of by step by step. 

To save time, and move smoothly through the batching process, you have to break each piece of content into steps. Don’t focus on working each piece through to completion before starting the next one. Otherwise, you aren’t batching—you’re creating a lot of content at one time. Or, attempting to, anyways. Instead, here are four steps you can take to get started batching your content (and being able to show up consistently while still serving your clients well.)

1) Set aside one week on your calendar

The very first thing you need to do to start batching your content is to set aside a week on the calendar for your batch week. Pick one week, and mark off the entire week so that you can’t add new things to your calendar.

Worried about not being able to serve your clients well if you take an entire week each month to batch your content? You aren’t the only one with this fear. With your first, or first few, batch weeks, it’s going to likely be a little difficult to fully step back. As with any new routine, there’s a transition period until you can make it your own. 

The best way to help with this transition is to simplify how much content you’re trying to put out during any given month. You don’t need to post according to best practices to see growth and results with your content. If there’s just no way for you to set aside a full week, cut back on how often you’re trying to show up. The key to a successful batch week is that no matter how much time you have—five hours or 40—all of the content for the next month fits into that one week. So adjust accordingly.

Once you’ve got the first batch week on the calendar, go ahead and set up your batch week for the next six months, or even a year! That way you can be even more intentional about setting aside a batch week moving forward.

2) Determine your steps to content completion

Now that you know when you’ll be completing your batch week, you need to determine the order of how you’ll move through the creation process. Just like with the steps in a recipe, you’ve got to determine your content batching steps. 

Take a moment to write down all of the types of content you’re trying to create. Then, underneath each one, write down each step that you take to get that piece of content from start to finish. It’ll likely look a little something like this:

Podcast episode

  1. Choose topic
  2. Create outline
  3. Record episode
  4. Edit episode
  5. Upload to hosting
  6. Schedule episode 

Instagram post

  1. Choose topic
  2. Write caption
  3. Edit caption
  4. Choose an image or create graphic
  5. Schedule post

After you’ve laid out every step for each type, you’ll notice a pattern. How you batch content for Instagram will look similar to how you batch content for your podcast. There will be some differences, but for the most part, there will be a general flow to your system. Once you’ve determined that, you’ll want to group those steps into just four or five steps. For example, when it comes to a podcast, maybe uploading hosting and scheduling episodes can be grouped. 

3) Set up your calendar

I designate Mondays to complete the majority of my client work. That way, during the batch week, I know I’m still able to serve my clients well, but also can put aside everything else and give the rest of the week to content. So, my batch week tends to run from Tuesday to Friday. For some people, this just won’t be an option, and that’s okay. If you work with your clients daily, your best bet is going to be to set aside a couple of hours each day for content and simplify how much you plan to create. 

The key here is that you want to start each work day with your content batching hours. Then, move into working with your clients. And, if you work with clients on a project basis, in the future, you’ll just want to do what you can to avoid having projects due during a batch week. That’ll be a bit of a trickier transition at first, but since you’ve already gone ahead and put your batch weeks on the calendar for the next year, the future will be much smoother!

4) Batch content creation

Now that you’ve got your system structure in place, all that is left to do is to get to work once batch week rolls around! Don’t be discouraged if your first one doesn’t go as planned. As with implementing any system, it takes a little trial and error. Soon, you’ll be able to say goodbye to that feast or famine cycle in your business, and hello to showing up consistently and serving your clients well all at the same time.

Attract new clients with consistent, targeted content

Content creation doesn’t need to be painstaking! Get organized and batch your content so you see less lag in incoming clients. With HoneyBook, you can keep your inquiries, service offerings, invoices, and bookings in an all-in-one clientflow platform like HoneyBook.

With HoneyBook, you can capture leads through a fully branded contact form, then automate your process for responding to them, vetting them, and selling your services. You can send individual files or create all-in-one booking files to get your work done faster.

Synch your content with your best-fit audience, then convert them into clients with HoneyBook!