Hope you are doing well. So I have had a “first” happen to me recently so let me set the scene and explain what exactly happened.
When I take bookings for my vacation rental properties, I firmly require money down upon booking in order to solidify the reservation. But after the down payment I am extremely flexible with my rental guests regarding the remaining balance as long as they are paid in full thirty days prior to their arrival date. So this means, my guests pay $200, $300, or $500 down (depending on the property) and then we schedule a payment plan for the balance (but we do pre-determine it and stick to it). For the subsequent payments, I automatically charge the guest’s credit card on the agreed upon date then immediately email them an updated invoice reflecting the payment. The process of emailing them is just as much for my records as it is for theirs. This way I have a clear “paper trail” if you will of all charges to their account. It might sound like a lot of work but the process works for me and my guests appreciate the flexibility with the payment plan.
Anyhow, for one particular renter, he paid the down payment upon booking. For the remaining balance he wanted it broken up into two more payments. I charged the down payment and first payment according to the schedule with no problems. Yesterday I charged the final payment and per protocol, I sent him the updated invoice. This morning I got an email from the guest and he said that there was a problem. The fraud department of his credit card bank called him yesterday morning (shortly after I charged his payment) to verify the charges. It caught him off guard and he never put 2+2 together that the charge was for the rental. Only after he checked his email and saw the invoice did he realize that the charge was for the rental.
So I contacted my merchant account provider and found out that if he does NOT call his bank and reverse the denial immediately then it will indeed get processed as a chargeback and I get charged a fee of $25. Furthermore, it can hurt my credit standing with my merchant account provider.
So I guess I will need to add yet another thing to my rental agreements reminding the guests that their credit card company might call to verify the charges. If they mistakenly deny the charged they can get assessed a fee of $50.