Q: Many of our tour participants sign up online and pay by credit card. Like most other operators, we have been resistant to provide refunds, so we have been receiving chargeback notices that we have to defend against based on our terms and conditions. As part of our defense, we need to prove that the cardholder agreed to our cancellation terms, which state that sales are nonrefundable. What's the best way to prove that agreement? If we can prove it, will the credit card companies really rule in our favor if we cancel the tour due to the coronavirus?
A: Visa, Master-Card and American Express have different rules governing what online sign-up measures will be sufficient to prove that the cardholder accepted your cancellation policy. Visa is the toughest, by far, and you may well need to change your online sign-up process to comply.
This is the Visa rule: "Your website must communicate its refund policy to the cardholder in either of the following locations:
- In the sequence of pages before final checkout, with a "click to accept" or other acknowledgement button, check box or location for an electronic signature, or
- On the checkout screen, near the "submit" or click to accept button. The disclosure must not be solely on a link to a separate webpage."
Square, a leading online merchant service, interprets this rule as follows: "Visa specifically requires proof that a customer has acknowledged both the terms and conditions of purchase and the cancellation/refund policy."
In other words, referring to, and linking to, the terms and conditions is apparently insufficient, even though the cancellation terms are inside your terms and conditions.
Visa provides the following example next to a check box: "I accept that I have agreed to the internet sales conditions and the sales and cancellation conditions for the rate." In the example, the words "internet sales conditions" are hyperlinked to the terms and conditions, as are the words "sales and cancellation conditions."
Given that "I accept that I have agreed" is redundant and that the cancellation terms are part of your internet sales conditions, I would advise that it is sufficient to provide, "I agree to the internet sales conditions, including the cancellation terms."
Further, if you have a better name for "internet sales conditions," such as "Participant Agreement," then the sentence should read: "I agree to the terms of the Participant Agreement, including the cancellation terms." Both "Participant Agreement" and "cancellation terms" must be hyperlinked to the webpage with them.
As noted, you need either a check box or an "I agree" button. You also need to retain and provide a copy of the checked or "I agree" page with the client's name or signature on it.
If you follow these steps, then all credit card issuers should rule in your favor in response to a chargeback. If you don't follow them, then you may not win Visa chargeback disputes, even if you offered a credit toward a future trip that the cardholder rejected.