Vrbo Chargebacks Can Dampen Your Bottom Line. Here’s How to Identify Dispute Sources & Prevent Them.
As a Vrbo host, you’re well aware that some guests can be frustrating to deal with. Perhaps they’re loud and disrespectful of your neighbors. They host parties that garner check-ins from the police, or leave a mess at your property.
But, those are just the beginning of your potential worries. A disgruntled guest might’ve misunderstood your booking procedures. Or, they might’ve expected something different from what you delivered. They might even be hoping to get a free stay by misrepresenting details about their experience. In any of these situations, you might end up getting hit with a chargeback weeks — or even months — after the guest’s stay.
In fact, guests paying for their stay at your Vrbo listing with debit or credit cards often have up to 120 days from the date of the reservation in which to file chargebacks with their issuing banks. When this happens, you could suddenly lose out on revenue that you assumed was already banked and settled.
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What is a Vrbo Chargeback?
A Vrbo chargeback happens when a guest files a dispute with their issuing bank regarding a transaction on Vrbo. After investigating the guest’s claim, the issuer may forcibly reverse the charge, resulting in lost revenue and unrecoverable expenses for the Vrbo host.
If a cardholder believes that the service you delivered did not meet what was promised at the time they made the booking, they have the right to contact their bank and try to dispute the charge. The bank will then investigate the cardholder’s claim; if it seems reasonable, then they will reverse the charge.
Vrbo, like Airbnb, acts as the merchant of record for their hosts. In practice, this means that Vrbo will handle most parts of the chargeback process on your behalf, so you won’t have to worry about the specifics like deciphering chargeback reason codes or memorizing complex rules and timelines surrounding representment.
As explained on the Vrbo website, “[for] payments processed through our platform, a dedicated team works behind the scenes to gather the information needed and dispute chargebacks on your behalf.”
What this doesn’t mean, though, is that you get off scot-free. If Vrbo isn’t able to win the case, then you’ll get the funds from the disputed charge taken out of your merchant account. That can mean hundreds, or even thousands of dollars in losses for you for each dispute filed.
Valid Reasons to File a Vrbo Chargeback
Common reasons for Vrbo chargebacks include fraud, miscommunications about listings or booking procedures, and payment processing errors.
Vrbo disputes can happen for a variety of reasons. Some valid, and some invalid.
For example, errors concerning your listing or how you advertised it, as well as billing errors on Vrbo’s part, can invite legitimate chargebacks that are difficult to win. Specifically, guests can file valid Vrbo chargebacks due to:
Invalid Reasons to File a Vrbo Chargeback
Reasons for valid Vrbo chargebacks are specific and limited. All other chargeback reasons beyond fraudulent activity, billing errors, and significant issues with a host’s listing are considered invalid.
In many cases, Vrbo chargebacks are unwarranted. Guests, whether due to accidental misuse or more sinister reasons, may file invalid disputes. Examples include:
You should be prepared to field refund requests, as this is often the best course of action if you’re hoping to avoid a chargeback.
If a guest asks for a refund, you can issue them a full or partial refund by navigating to your Vrbo inbox and clicking on the guest’s reservation. Then, click on the guest’s name, and select “Send a refund” under “Payment schedule.” You can provide a refund with or without canceling the guest’s stay. In either case, it’s best to respond to refund requests within 48 hours (or less) to deter impatient guests from filing chargebacks.
Vrbo Chargebacks: A Step-by-Step Walkthrough
You’re probably going to be first made aware of a chargeback when you get an email from Vrbo telling you that you’ve received one. It’s at this point that Vrbo’s in-house staff will help you fight it.
That said, the actual Vrbo chargeback process began well before that, and may persist well after. Here’s a rundown of how it works:
According to the Chargeback Field Report, about 9% of chargebacks are escalated to “second cycle” or “pre-arbitration” disputes, which can happen if the issuer discovers additional evidence from the cardholder that they did not consider before the initial chargeback. If this occurs, the issuer may initiate a second chargeback against the same transaction.
Second-cycle chargeback win rates are almost always significantly lower than first-cycle win rates. That’s because merchants need to uncover additional evidence to counter the new concerns raised by the issuing bank.
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Does Vrbo Fight All Chargebacks For Hosts?
Vrbo only fights disputes involving transactions that take place on the Vrbo platform. This excludes listing synchronized with your Property Management Software (PMS), for which you are the merchant of record.
Not necessarily. First, the company will only re-present chargebacks on your behalf if the booking occurred directly on the Vrbo platform. In other words, they will only fight chargebacks for hosts if Vrbo is the merchant of record (MoR) in a transaction.
If you’re an integrated property manager, and you synchronize your listings and availability to Vrbo via your Property Management Software (PMS), then you are the MoR. This means that you’ll have to respond to any chargebacks you receive on your own.
The same goes if you accept an off-platform payment for a property you’ve listed on Vrbo. This is against Vrbo’s booking policy. So, if you receive a chargeback for an off-platform booking, you’ll be required to fight it yourself. To make matters even worse, you may owe service fees or even see your account terminated if Vrbo discovers that you accepted an off-platform payment.
How Hosts Can Prevent Vrbo Chargebacks
To prevent Vrbo chargebacks, you should carefully review all bookings, communicate with guests through the Vrbo platform, and carefully document the condition of your property. Other practices, like validating guest ID at check-in, can help too.
A chargeback would be aggravating for any Vrbo host.
First, you’re losing out on booking revenue; it’s as if the listing was sitting unoccupied and generating no revenue during the duration of the guest’s stay. To make matters worse, you’re also left to foot the cost of the utilities, electricity, cleaning costs, and any other costs associated with servicing the guest during and after their stay.
To add insult to injury, you’ll also receive a chargeback fee. Vrbo is going to be assessed a fee by their processing service provider to cover the cost of handling the dispute. But, Vrbo is going to pass this fee onto you, as they have their own costs to consider as a result of the dispute.
For these (and many other) reasons, the best way to avoid chargeback headaches is to aggressively prevent them from occurring in the first place. Here are some tips:
Scrutinize Booking Details & Guest Information
Before accepting a reservation, take a moment to perform a quick risk assessment. Look for red flags in the guest’s Traveler Profile and booking request.
For example, a brand-new profile with no reviews from hosts, a missing “Verified Identity” badge, a vague initial message, or questions that are already clearly answered in your listing description can be signs of a careless or potentially problematic guest.
Be particularly cautious with high-value, last-minute bookings from guests in a different geographic location. Travel expenses (like Vrbo bookings) are a popular option for scammers looking to turn stolen card information into something fungible.
Keep All Communication on Vrbo
It may be quick and convenient to text or email a guest directly. But, this can create a communication black hole.
When a dispute occurs, Vrbo’s team can step in to fight the chargeback on your behalf. But, they can only use evidence that they can see.
By keeping 100% of your communication within the Vrbo messaging system, you provide them with a complete, verifiable record of your interactions, which can help the platform make a better case against a guest’s claims.
Vrbo’s Host Communication Policy recommends that hosts communicate as much as possible on-platform. Hosts may provide an emergency phone number for guests to dial in case anything urgent comes up. But, this should be reserved for immediate and emergency contact only.
Document Your Property’s Condition Before & After Every Stay
If possible, ask your property manager and cleaning staff to take timestamped video walkthroughs of your property immediately before a guest checks in and right after they check out. This provides you with evidence of the property’s condition that can be used to counter guest claims of unsanitary conditions, infestations, or other significant issues.
Store these videos for at least 120 days after every booking so that you have them on hand (and can potentially forward them to Vrbo) if you receive a chargeback.
Verify Guest Activity With Smart Home Technology
Investing in smart-home technology can provide you with an automated layer of security. For example, smart locks with unique codes for each guest can give you a digital log of when every guest checked in and out, which can be used to disprove claims that they couldn’t access your property.
Outdoor security cameras, when disclosed properly in your listing, can help you verify the identity of the guest and ensure they aren’t violating your house rules regarding pets, smoking, or other restrictions. This can help deter property misuse or policy misinterpretations that may lead to guest complaints or chargebacks.
Require the Cardholder to Be Present at Check-In
To combat third-party fraud, consider making it a house rule that the person who booked the stay must be present at check-in with a valid ID that matches the name on the reservation.
This step will add some friction, which is why Vrbo does not require identity verification at check-in. But, hosts who implement this procedure can make it much more difficult for fraudsters to use stolen credit cards to book a stay for someone else. It’s something you’ll need to weigh carefully before implementing.
If you require a positive ID from the guest at check-in, make sure this is clearly noted on the listing page. Otherwise, you could end up with even more chargebacks from angry guests that have been refused at the point of check-in.
If you require a positive ID from the guest at check-in, make sure this is clearly noted on the listing page. Otherwise, you could end up with even more chargebacks from angry guests that have been refused at the point of check-in.
Get Help Today
As a Vrbo host, your skillset is focused on hospitality and property management. But, fraud detection and chargeback management are completely different areas of expertise.
Where can you turn to when Vrbo chargebacks threaten your top and bottom line?
Chargebacks911®, the global leader in chargeback remediation and loss recovery for 30+ verticals — including travel, hospitality, retail, and eCommerce — can craft customized solutions to help you identify, detect, prevent, and fight Vrbo disputes.
Have questions? Get a no-obligation ROI analysis from one of our chargeback experts today.
FAQs
Can I dispute a Vrbo charge?
Yes. If you have a valid reason to dispute a charge, and have tried contacting the host first but have not been able to resolve the issue, then you can dispute a Vrbo charge.
What is a chargeback on Vrbo?
A chargeback on Vrbo occurs when a guest files a formal dispute claim with their debit or credit card issuer.
How hard is it to get a refund from Vrbo?
If you cancel a Vrbo stay during the cancellation period, refunds are automatic. However, full or partial refunds for cancellations outside the policy window, such as last-minute or mid-stay cancellations, may be difficult to obtain.
Does chargeback mean refund?
No, a chargeback is not the same thing as a refund. While a refund is a merchant-initiated reversal, a chargeback is forced reversal by the cardholder’s issuing bank. Additionally, cardholders must return the items they purchased to receive a refund. This is not always the case when filing chargeback, though.
What happens if a buyer does a chargeback?
If a buyer files a chargeback against you, the transaction will be forcibly reversed. You’ll lose out on revenue associated with the sale and the inventory shipped (or service provided) to the cardholder. You may also be assessed a chargeback fee by your payment processor or acquiring bank.
