Chargebacks (again)

[seanmsulli]

Just lost our 5th chargeback in a row. 4 of them were contactless or chip with a signed receipt. 1 of those was one of our employees and the card company automatically lowered his tip to 25%. The 5th one was a walk out on a pre-authorized tab. It is getting frustrating that we seem to be doing everything right but keep losing. I noticed that on the few that we have won recently we are notified quickly whereas the ones we are losing take close to 2 months to show up. Makes me wonder if the customer is appealing the decision and Toast doesn't have the ability to show that anymore.  I feel like we are losing a lot more that we used to so I compared the last 2 years in the Chargeback Challenger:

2022: 31 chargebacks and 1 request for documentation. 9 expired or accepted (I didn't have the receipt to challenge). 16 won and 5 lost with one stuck in the system that never updated. So 50% win rate and 15% loss rate.

2023: 35 total chargebacks. 2 expired/accepted. 4 stuck in the system. 16 wins and 13 losses so 45.7% win rate and 37.1% loss rate

2024: 17 total chargebacks. 2 accepted/expired. 5 won 10 lost so 29.4% win rate 58.8% loss rate.

As you can see our overall chargeback number is down but so is our win percentage. I love Toast for the most part, but some transparency as to what is happening here would be nice.

[au79teahouse]

I thought merchants are protected as long as card is dipped or tapped? I have only experienced with chargeback with online orders/card-not-present transactions.

Toast is implementing the pre-auth with emv feature.
https://central.toasttab.com/s/article/Card-Pre-Authorization-FAQs

[seanmsulli]

All of our chargebacks have been in house. The majority are tapped or dipped. It was my understanding that in those cases the liability was supposed to be on the bank. If we didn't have the proper equipment or swiped or typed in we would be the ones liable. The frustrating thing is that nobody will explain why we are losing or why the percentage that we lose has gone up dramatically.  It's even worse if you take the ones we didn't challenge our of the equation.  If you do that in 2022 we won 77% of the ones we challenged.  Of the 5 we lost, one of them was keyed in, 2 were instances of Mastercard automatically lowering a large tip to 25% and the other 2 were preauthorized cards that at the time I chalked up to the preauth not using the chip at the time.  Now there seems to be no rhyme or reason for as to why we will lose, and no one can or will explain why our win rate dropped from 77% 2 years ago, to 50% last year, to 30% this year. 

[Rob]

One reason it's difficult to explain why a loss occurred is that the guest's bank ultimately decides whether the merchant or the guest wins the dispute. Toast has no influence over this decision. Currently, tapping or dipping a card is the most secure method of payment; if that was used and the transaction still resulted in a loss, there’s nothing Toast can do to address it. The reason codes are supposed to explain why a challenge was lost are these not occurring?

Get Help With Chargebacks

[PK2024]

There are no reasons given when we lose the case even when we have proof of signature, photos of customer through our videos, as well as matching cc and Id when given to server.