10 Tips for Resolving DoorDash Chargebacks Before They Happen
As a business owner using DoorDash for delivery services, understanding the nuances between DoorDash error claims and credit card chargebacks is essential. This knowledge helps in managing customer relations. It’s also crucial to maintaining your financial stability and reputation.
DoorDash provides instructions for restaurants that use their service about what happens if a customer contacts them to complain about an order. However, we want to make one point very clear: a DoorDash claim is different from a DoorDash chargeback.
In this article, we'll address both of these scenarios. We’ll also offer some use tips and advice to help you protect your business in either scenario.
Recommended reading
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- Stripe Chargeback Guide: Time Limits & Other Info You Need
- What is a Bank Chargeback? What Makes Them Different?
- Card-Not-Present Chargebacks: The Merchant's Guide for 2024
Doordash Claims vs. Chargebacks on Doordash Orders
As alluded to above, a DoorDash error claim is different from a DoorDash chargeback.
In the former case, the customer is calling Doordash to complain about the order, rather than the bank. That means Doordash is the arbiter, and they're effectively refunding the money on behalf of the merchant.
In the latter case, DoorDash is the merchant of record. The bank files a chargeback against DoorDash . It's then at the company’s discretion whether to clawback the cost of the chargeback from the merchant.
The difference between a DoorDash error claim and a DoorDash chargeback mainly lies in the process and the entities involved in resolving an issue related to a DoorDash order. To illustrate, here are the key differences between them:
| DoorDash Error Claim | DoorDash Chargeback |
| Initiated by the customer via DoorDash | Initiated through the customer's bank |
| DoorDash resolves internally | Resolved externally by the bank |
| Generally faster, involving fewer parties | More complex, more parties involved |
| Neither merchant nor DoorDash incur additional fees | DoorDash incurs chargeback fee, which may be passed along to merchant |
Essentially, a DoorDash error claim is a direct complaint to the company, which is usually resolved quickly and internally. A DoorDash chargeback, however, involves the customer's financial institution and is a more formal, often lengthier process.
How Do DoorDash Error Claims Work?
A DoorDash error claim is initiated when a customer contacts DoorDash directly to report an issue with their order. This could be prompted by a number of issues. For example, an order was missing an item, or the customer received the wrong order.
When a customer reports an error to DoorDash, it goes through the following process:
Error Reported to DoorDash
The customer reports an issue to DoorDash. This is done by tapping “Help” in the top right-hand corner of the mobile app or desktop page. Under “Order Issues,” the customer selects the error, then follows the additional prompts.
DoorDash Investigates Claim
DoorDash receives the customer’s claim, and then investigates it. They look at the transaction data, and determine whether the customer’s claim has merit, and whether the transaction should be refunded.
Order Adjusted
Assuming that DoorDash sides with the customer, they will refund the cost of the order, along with any fees the customer paid. These funds will be debited from the restaurant’s account.
Dispute Claim (if Applicable)
If the restaurant feels an error claim was invalid, they can fight it by filing a DoorDash dispute. This is done in the DoorDash Merchant Portal, under the “Orders” section. Next, click “Dispute Error Charge,” to select the items to dispute and to give reasons for that dispute.
For DoorDash disputes, the company handles these internally. They review the customer's complaint, possibly consult with the merchant (restaurant or store), and then decide on a resolution. This might include a refund, credit for future orders, or another form of compensation.
- Direct resolution between the customer and DoorDash
- Typically faster than the chargeback process
- Does not involve the customer's bank or credit card issuer
How Do DoorDash Chargebacks Work?
A DoorDash chargeback occurs when a customer calls their issuing bank to dispute a charge from DoorDash on their credit card or bank statement. This can happen for many of the same reasons as a dispute. For instance, dissatisfied with the order (e.g., missing items, wrong order). However, there may be other reasons for a DoorDash chargeback, including:
- The customer doesn't recognize the charge
- The customer was charged multiple times for the same order
- The customer was charged the wrong price
When a customer files a DoorDash chargeback, it goes through the following process:
Cardholder Contacts Bank
The cardholder initiates a dispute by contacting the bank and asking for the transaction to be overturned.
Bank Investigates & Files Chargeback
If the case is considered valid, funds will be taken from DoorDash and credited to the cardholder, who may see a provisional credit on their account. If the bank feels the case is unwarranted, the dispute will simply be voided.
DoorDash Receives & Reviews Chargeback
If the claim is legitimate, DoorDash must accept the loss. However, if they believe they can disprove the claim, they have the right to re-present the charge to the issuer, along with additional evidence.
Bank Reviews Evidence & Makes Decision
If the evidence provided refutes the cardholder’s claim, funds that were removed due to the chargeback will go back to DoorDash. Any chargeback fees or administrative costs, however, will not be repaid.Remember: an entity against which a chargeback is filed is called a merchant of record. In this case, the merchant of record is DoorDash. This results in DoorDash losing the revenue from that transaction and incurring additional fees imposed by their acquiring bank. As mentioned above, it’s then at the discretion of DoorDash whether to attempt to clawback the cost of the chargeback from the restaurant.
- Involves the customer's card issuing bank, making it a more formal process
- Can take longer to resolve compared to a dispute with DoorDash
- Reversal of the transaction means incurring additional fees for DoorDash and, potentially, the restaurant
When is a Cardholder Entitled to a Dispute?
When using DoorDash, a cardholder may encounter situations in which they feel entitled to initiate either an error claim or a DoorDash chargeback. These mechanisms are both in place to protect consumers from various issues that can arise with their orders. But, it’s important to remember that they are entirely different processes.
Here's an overview of circumstances that justify a DoorDash dispute:
When is a Cardholder Entitled to a Chargeback?
It's important for customers to understand that DoorDash chargebacks should be a last resort, used only when they have tried and failed to resolve their issue directly with the merchant. Misuse of the chargeback process can lead to penalties or restrictions on the customer's account.
Therefore, DoorDash chargebacks should only be used in situations like these:
Unresolved Disputes
The customer has already attempted to resolve the issue directly with DoorDash and is unsatisfied with the response or resolution.
Fraudulent Transactions
The customer finds a charge from DoorDash that they did not authorize, or if there is suspicion of fraudulent activity.
Repeated Issues
Without Adequate Resolution
A customer frequently encounters problems with DoorDash orders, but disputes have not led to satisfactory resolutions.
Non-Recognition
of the Transaction
The customer does not recognize the transaction on their statement and cannot confirm its legitimacy through a dispute with DoorDash.
DoorDash chargebacks are a mechanism to protect consumers, but they should be used judiciously. It's important for cardholders to understand these processes and use them responsibly.
10 Ways to Avoid DoorDash Chargebacks & Error Claims
Restaurants and services that use DoorDash need to proactively address chargeback issues. This is crucial for merchants to maintain a good standing with DoorDash, ensure customer satisfaction, and protect their revenue. The keys are improved communication, enhanced customer satisfaction measures, and effective dispute resolution when necessary.
With that in mind, here are ten strategies merchants can adopt to minimize the occurrence of DoorDash chargebacks and error claims:
#1 | Accurate Menu Listings
Make sure your DoorDash menu is up-to-date and accurately reflects the items available. Clear descriptions and prices help prevent misunderstandings about what customers are ordering.
#2 | Quality Control
Implement strict quality control measures to ensure that all items sent out are fresh, correctly prepared, and meet the standards promised in your menu.
#3 | Order Verification
Double-check orders before they are handed off to DoorDash drivers. Ensure that all items ordered are included and match the customer's request, especially in terms of any special instructions or dietary requirements.
#4 | Efficient Packaging
Invest in quality packaging that keeps food items intact and at the right temperature during delivery. Proper packaging can prevent spills, mix-ups, and other issues that can lead to disputes.
#5 | Prompt & Accurate Fulfillment
Aim for a quick turnaround time, from when an order is placed to when it's ready for pickup by DoorDash drivers. Delays in order fulfillment can lead to late deliveries, one of the common causes of customer complaints.
#6 | Clear Communication
If there are any delays or issues with an order, communicate these promptly to the customer through the DoorDash app. Transparency can often mitigate frustration and reduce the likelihood of disputes.
#7 | Training Staff
Train your staff on the importance of accuracy and efficiency in processing DoorDash orders. They should be aware of the common reasons for disputes and chargebacks and how their role impacts customer satisfaction.
#8 | Responsive Customer Service
Be quick to respond to customer inquiries or complaints. Addressing concerns promptly can often resolve issues before they escalate into formal DoorDash chargebacks.
#9 | Regular Review of Feedback
Monitor customer feedback on DoorDash regularly. If you notice recurring issues, take immediate steps to address these problems to prevent future disputes.
#10 | Promotional Clarity
If you offer promotions or discounts, make sure these are clearly explained and accurately applied to the orders. Misunderstandings about pricing and promotions are a common cause of disputes.
Implementing the recommended best practices can significantly reduce the occurrence of chargebacks, while simultaneously boosting customer satisfaction and ensuring a seamless, secure experience for your patrons. However, it's important to note that a fragmented approach might not yield the desired results. Effective fraud prevention and risk management demand a holistic strategy.
At Chargebacks911®, we provide a complete, end-to-end technology solution designed to effectively prevent disputes, achieve more successful chargeback reversals, and enhance your return on investment. Reach out to us for detailed insights on how to elevate your customer service to effectively prevent chargebacks.
FAQs
How does DoorDash handle chargebacks?
When DoorDash receives a chargeback, they may take one of two paths. First, they may simply eat the cost of the chargeback. Or, they may forward it along to the restaurant, and attempt to claw the funds back.
Can I get my money back from DoorDash?
Yes. If you have an issue with a DoorDash order, you may respond by filing an order error claim. This is done by tapping “Help” in the top right-hand corner of the mobile app or desktop page. Under “Order Issues,” the customer selects the error, then follows the additional prompts.
How do I issue a refund on DoorDash as a merchant?
To issue a refund on DoorDash, the customer must contact DoorDash customer support directly through the app or website to report the issue with their order, after which DoorDash will review the complaint and decide whether to issue a refund. As a merchant, you cannot directly issue a refund through the DoorDash platform, but DoorDash may contact you for information during their review process.
What is the compensation policy for DoorDash?
DoorDash's compensation policy for customers typically involves refunds, credits, or redelivery in cases of missing items, incorrect orders, or unsatisfactory service, decided on a case-by-case basis after the customer files a dispute. Merchants may be involved in the resolution process, particularly if the issue pertains to order accuracy or quality.
