Chargebacks are a huge problem area in today’s payment-transaction environment, including the mobile-DJ world. Here are some handy tips to help you protect against a chargeback and the dispute case that will follow.
As a DJ, you’ve just performed a great wedding reception (or other similar event). You rocked the crowd, and everyone had a good time. The dancefloor was packed, and the energy was insane. After the gig was over, you packed up the van and went home contented at another job well done.
However…the next morning, you wake up to a nasty email from your payment-gateway provider informing you that the person who paid you by credit card has issued a chargeback dispute. What?
Perhaps you didn’t stick to the playlist 100-percent, or your volume levels put you in conflict with an unreasonable venue, etc. We’ve all seen Bridezillas come up with a plethora of reasons to complain over the years, so anyone with at least five years in the mobile-DJ world won’t be surprised. A chargeback is a different story, though, and quite traumatic. So, let’s discuss some methods to protect yourself.
Once a customer contacts their credit-card company to invoke their chargeback request, here’s a brief summary of what the process is.
- The credit-card company will contact your payment-gateway provider (i.e., PayPal, Stripe, Venmo, etc.) and inform them.
- On the customer side, their credit-card company will issue them a temporary credit for the amount in question, so they have access to those funds while the dispute is ongoing.
- On your end, your payment-gateway provider will “claw back” those funds from your account, and put them in a pending status. (Note that, if you always withdraw right away, this could put your account into a negative balance… which will result in extra fees being charged to you by your provider, and perhaps other problems, as well.)
- From there, you will have the ability to contest the dispute (i.e., fight the good fight). If you don’t contest the dispute by the deadline (usually a month), then it’s an automatic loss for you, and the dispute is automatically resolved in favor of the customer. (It’s a bit like not showing up for court.)
- If however you do contest the dispute, then both sides will have the right to submit evidence to support each claim. There’s a deadline for this, as well, and I suggest you get your evidence submitted ASAP. Don’t procrastinate on this.
- After the evidence-submission period is over, the credit-card company will make a judgment accordingly, and announce its decision. If you win, the funds will be restored to your account within a few days, and life goes on.
To be clear, there is a little bias towards the customer, of course, as it is their credit-card company that makes the judgment. The best way to protect yourself is with evidence… lots and lots of evidence. The following addresses protection points accordingly.
CONTRACT
The best defense by far against a malicious client is to have your contract air-tight. Don’t agree to anything that could be used for a dispute reason. Make sure your contract has wording about dispute mechanisms in order to prevent a chargeback situation. And, above all, hire a lawyer in your local state or province! I’ve seen DJs still to this day trying to write their own agreement. This may help you save a few bucks, but avoiding a chargeback situation is precisely why hiring a lawyer is a good investment. Those of you who have a legally prepared contract will feel that much better when that dreaded dispute email arrives in your inbox. And for those of you who decided to save the money? Not so much!
TERMS OF SERVICE
Your payment-gateway provider will have an option in their settings in order for you to insert custom Terms Of Service text that will obligate the customer to agree before they can make payment. This is actually just as important as the contract itself, in that the customer specifically has to agree to the TOS while making their specific payment to you. Take advantage of this feature (most DJs ignore this feature), and, of course, have your lawyer look it over (especially as it relates to your state/province).
PHYSICAL TRANSACTION
There’s a huge difference between a transaction in-person where the card is physically present and an online transaction where the card information is used online. Simply put, in-person transactions are almost never able to be disputed, whereas online transactions are ripe for challenges. So, a simple method to prevent against chargebacks is for you to have the customer come into your shop and run their physical card through whatever card reader you’re using. It may be a real pain for your client, so try and ease the pain with some sort of perk (some of my clients use Amazon Gift Cards, etc.).
EMAILS/CALL LOGS
Your email threads and CRM notes on when calls took place with the client are a major source of evidence. If you’ve saved your emails and also logged into your CRM every time you are on the phone with the client, this is prime evidence as to customer intent and state-of-mind leading up to the event. The email threads, in particular, are also viewed as legally binding in certain situations. So, don’t delete your emails, and don’t be lazy on call logging!
PLAYLIST
Your playlist during the event is a prime consideration, especially if the customer has initiated a chargeback because you didn’t play something they requested. Now, most of the major software systems have a playlist tracker built into their features. Double-check that it’s working properly and that you can save the list of what you played when the event is over. Further to this, add in whatever “requested songs” sheet you take from the customer prior to the event, and adjust it so that you mark the time that the requested song in question was actually played. Finally – and this goes more to the contract above – add in clauses that stipulate that there’s only so much time during an event, and that you expect to play, say, 60 to 90 songs throughout the night.
PHOTOS/VIDEOS
One of the best sources of evidence is that device sitting in your pocket or beside you at the DJ booth. You’ve got a powerful device that can help you… your phone! Use it to take photos and videos throughout the night of your crowd dancing, and grab yourself some great content for your marketing at the same time. To really optimize this aspect, bring an assistant along with you – extra duty for whoever is helping with load-in and load-out perhaps? – so that you can focus on your work, while someone else captures the images and footage.
TESTIMONIALS
Taking the concept of video even further, use your phone on the fly to conduct mini-interviews in a testimonial format. Ask the attendee if they’re having a good time, and record what they come back with. Similar to the above, you can use these testimonials in your marketing workflow, which essentially allows you to double-dip with this task. Take evidence in the case of a chargeback, and also get yourself some primo marketing material!
CONCLUSION
I’m sure that those of you who are running the big multi-ops will have points that belong on this list, so please come up to me at DJX this August 7-10 at the Hard Rock Hotel & Casino in Atlantic City, N.J., to discuss. Anything worthwhile will be added to this article post-publish. Even if you don’t have anything to add, come say hello anyway. See me at one of my four educational seminars and at the Digitera booth!
Jordan St. Jacques is the President/Lead Digital Marketer at Digitera.Interactive in Ottawa, Ont., Canada.