Sometimes I fall into the complacency of just taking a credit card payment. It’s quick and simple and I have the funds in a few days. What can go wrong? The problem happens over the course of a entire year with thousands of dollars subject to a 3.35% fee. You would not believe how the fees can add up and you are separated from thousands, if not tens of thousands of your hard earned dollars. This is the obvious downside to credit card payments. But there is a far worse possible outcome and that is called a chargeback.
A chargeback is when a customer files a dispute with their bank suggesting that you did not deliver the product or services expected. Being that we all work in the entertainment industry we are subject to performance or labor vs a physical transaction of goods. This can be highly subject to opinion.
I want to share a experience with you that I am currently dealing with and one that has me re-thinking whether or not I will ever accept a credit card again for payment.
Back on October 10, 2020 we provided a DJ, Lighting, Ceremony and Photography to a wedding client who had made several date changes due to the pandemic. She changed her date from 10/10/20 to 2021 and then changed her venue 3 times. After a few more date changes she requested moving back to the original October 10 date, but at a different venue. Her original DJ was no longer available so I introduced her to the new DJ from my staff. She had multiple conversations with him in advance of her wedding and indicated to me that everything was great and they were excited.
The day after the wedding the bride posted on our company facebook page that they thought the DJ was “The Best” and posed for a group photo as the bride and groom both had their arms around our DJ. I responded as the company owner how pleased I was to hear of their satisfaction and congratulate them on their marriage in a difficult year filled with challenge. Sounds great right?
1 month after the wedding I was notified of a charge back dispute for the FULL and complete amount of funds from that wedding. The bride cited that the DJ was thrown together “last minute” and that my company scrambled just to find anyone to fulfill the wedding. She griped that the original DJ was not there and demanded a 100% refund even though she received all services, professionally executed and having been informed of the new DJ as direct result from them changing their date back to 2020 from 2021.
Word of CAUTION: In the credit card bank dispute world you are guilty and must prove your innocence. I literally had to fill out tons of paperwork with my card processing company and provide contracts, emails from the client and photos from the wedding along with the bride’s glowing testimonial. I was then informed that the client’s bank would review all materials and act as judge in the dispute making the call whether I get my money back or not!
It gets even better. Seems that the bank allows up to 3 months to process the dispute. And my funds were literally removed from my account and put into frozen status during the review process.
Well, the client’s bank found in my favor right away. They determined that I had provided all services and that the bride’s claim that she did not receive the services expected was bogus. Great news, right? Wrong……
Seems that the card holder’s bank declared they found in my favor, however unless the client obtained a letter of dispute resolve that I could provide to my credit card processing company the funds would continue to he held until the full term of the dispute process. Which is 3 months.
I called the bride and asked for the letter of case resolve. She basically said, “You won so you can wait for your money. I’m not helping you with anything!” So, even though I already paid my DJ and my Photographer I was out a large chunk of change during the holiday season! During the pandemic where we lost every single holiday party and new year party! In other words, we struggled as a result of this dispute all because some client who was having her own financial hardship figured out a way to attempt to get money back by making a false claim and manipulate the system.
While the system may have worked it failed me tremendously! And I am now in position where I don’t trust credit cards or the banks. I know there are many alternative ways to get paid these days and with my 20-something year old clients using many alternative payment systems I will be looking to make changes so this never happens to me again.