Outpayce study finds travel companies facing rise in chargebacks

Difficulties collating evidence mean majority of travel companies struggle to contest chargebacks

New research by Outpayce, from Amadeus, finds 71% of travel companies have seen a growth in chargebacks in recent years, with disputes surging at a rate of around 30% year-over-year.

The global study with airlines and travel agents found that 62% of companies believe the surge in cashbacks is down to travellers perceiving chargebacks as easier than seeking a refund, 56% think it’s due to increased traveller awareness of the process and 42% put it down to the ease of raising a chargeback through a mobile banking app.

The study also highlighted the low ‘success rate’ travel companies achieve when challenging chargebacks. 

Only a quarter of travel firms see more than 60% of disputes awarded in their favour and nearly half of the firms surveyed see less than 40% of the chargebacks they choose to contest awarded in their favour.  

Tania Platt, senior vice president, commercial, Outpayce from Amadeus, said: “Our research shows travel companies are finding it hard to handle the volume of disputes they’re seeing. 

“A requirement to invest in additional skilled resources, coupled with the difficulty collecting the travel and payments information needed to contest chargebacks are resulting in low success rates. 

“There’s a real opportunity for the industry to take a step back and ask how it can industrialize chargeback management.

“When we look at an airline, throughout the transaction process, the airline knows if the cardholder authenticated, it knows if the payment was authorised, it knows if its T&Cs were presented and if the traveller boarded the plane. 

“The difficult part is collating the information in a timely manner to effectively contest those chargebacks where the travel merchant isn’t at fault. 

The study highlighted that more than two thirds of respondents agreed that being quickly provided with key travel and payments information, like proof of payment authorisation and proof the passenger boarded the plane, relating to each new chargeback would increase their firm’s efficiency when managing chargebacks.  

She added: “Solving that problem has been a major focus for us over recent months.”