COVID-19: Managing Chargebacks


What Are Chargebacks?

A chargeback, also referred to as a payment dispute, occurs when a cardholder questions a transaction and asks their card-issuing bank to reverse it. The ability to dispute a payment is meant to protect consumers from unauthorized transactions.

Regardless of your payment processor, any chargeback you respond to and try to win back will incur a fee to resolve (for Wodify Payments that fee is $15 USD). For that reason, it's is better for you as a business owner to issue refunds if you think the member may otherwise attempt a chargeback and you aren't 100% confident in winning the chargeback dispute. 

If you believe that your business charged the customer fairly and delivered the services that were agreed to, then you can attempt to respond to the chargeback and "win" the money back. 


Common Causes of Chargebacks for Fitness Businesses

First, you should always try to get in touch with your customer - sometimes people forget about payments they make or don’t recognize the way they appear on their card statement.

  • If this is the case, ask them to contact their card issuer and let them know they no longer dispute the transaction. Even if your customer agrees to withdraw the dispute, you must still submit appropriate evidence as this has been escalated to their card-issuer, and the final decision stands with the card-issuer, not simply with a verbal/ written agreement with the Client. Simply saying that your customer is going to withdraw the dispute is not sufficient evidence.

​ There are a few reasons a chargeback might occur for your business:

  • Subscription canceled ​ 

    The customer claims that you continued to charge them after a subscription was canceled.

    • Required to overturn dispute: Prove that the subscription was still active and that the customer was aware of, and did not follow, your cancellation procedure.

  • Fraudulent ​ 

    This tends to be the most common reason for a dispute and happens when a cardholder claims that they didn’t authorize the payment. This can happen if the card was lost or stolen and used to make a fraudulent purchase. It can also happen if the cardholder doesn’t recognize the payment as it appears on the billing statement from their card issuer.

    • Required to overturn dispute: Provide adequate payment and order details so that a legitimate customer recognizes it, or proves to the card issuer that their cardholder authorized the transaction.

  • General ​ 
    This is an uncategorized dispute, so you should contact the customer for additional details to find out why the payment was disputed. 


Tips to Avoid Chargebacks During COVID-19 

There is a good chance you've had to close your physical location due to the Coronavirus pandemic. If you did AND you are continuing to charge membership fees for offering remote/online services (including virtual classes), then you may be at an increased risk of losing chargeback disputes with your members because the original member agreement they signed likely does not cover your new remote offering. Here are some tips to adjust your business to be in a better position to manage chargebacks during this time:

  • Clearly communicate with ALL your members
    • Make sure they understand that they will be charged, how much they will be charged, and what you're offering in lieu of the physical location. Try to have one on one conversations, rather than sending a mass email and hoping that everyone read it. 
  • Have Clients Sign New Membership Agreements
  • If a member asks for a refund, air on the side of refunding the transaction
    • If you are not able to come to an agreement with your Client on the amount due back to them, they have the potential of issuing a chargeback to your account. Your refund will return any processing fees back to you, whereas a Chargeback will fine you $15 and put your account at higher risk of being shut down. 


Wodify Payments - Tips to Win Chargebacks

​ Keep your evidence relevant and to the point
Card issuers review thousands of dispute responses every day. A long introduction about your product or company, complaint about the customer, or the unfairness of the dispute isn’t going to make your responses more compelling. Instead, provide only the facts surrounding the original purchase, using a neutral and professional tone. 

On the respond to chargeback form in Wodify Core, please be sure to answer the following questions when asked to briefly describe why you should win this chargeback dispute:

  • Why was the customer charged for this subscription? 
  • When was the customer shown the cancellation policy? 
  • Why isn't the customer being refunded for the charge? 

​ Provide clear and accurate evidence
Card issuers do not follow any links provided in a response. Instead, you must include a clear screenshot of your terms or policies as they appear during checkout or on your site if they are an important part of your defense (e.g., a customer disputed a subscription but there is a minimum contract term that must be adhered to).

​ Formatting documents and images to upload
Dispute evidence is often transmitted through several legacy systems and most card issuers are still utilizing paper faxing. Before sending your response, ensure that any text or images are clear and large enough to show up clearly in a black and white fax transmission.

While you can zoom in on your electronic documents, the card issuer will not be able to do so. Any evidence that is too small to transmit clearly won’t be considered by the card issuer, so it’s better to have large, full-page images than try to fit too many on one page.

When submitting documents or images as evidence, use the following recommendations to make sure they can remain legible:

  • Use a 12 point font or larger
  • Ensure that documents are U.S. Letter or A4 size, in portrait orientation (screenshots can still be added to your documents in landscape orientation)
  • Use bold text, callouts, or arrows to draw attention to pertinent information
  • Avoid using color highlighting

When uploading screenshots:

  • Crop the screenshot to the area of interest and circle any key components (e.g., delivery confirmation or signature)
  • Use the text fields in the dispute evidence form to describe what the image contains and how it supports your response
  • Any illegible text or data that is submitted with a response will be considered incomplete by the card issuer and not reviewed.

More info on managing chargebacks with Wodify Payments.


General info on chargeback best practices, if you use GoEmerchant or another payment processor (i.e. not Wodify Payments)






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