Best Practices to Manage Chargebacks at Your Facility

Club Automation


April 22, 2020



minute read


April 22, 2020

Clubs have faced chargeback challenges in volumes they’ve never experienced before. Chargebacks are a two-sided pain point. Not only do you lose that money from the paying customer, but you also get hit with chargeback fees on the payment processing side for the dispute.

In this webinar, Jeff VanDixhorn, Kate Hardy, Colby Watkins, and Matt Popinski go over some details about what a chargeback is, what the dispute process looks like and how you can best protect yourself against losing that revenue.

Short on time? Here are the takeaways:

  1. Chargebacks are a dispute from the cardholder, a challenge to a charge that occurred previously.
  2. While chargebacks are not new, there’s been a surge in the number of chargebacks clubs have had to deal with since the pandemic began.
  3. Chargebacks can be divided into two types: The first one is chargebacks initiated due to refund not issued, and the second is initiated due to services not provided. The second type is what we’ve seen more of lately.
  4. Chargebacks are incredibly time sensitive. They force your club staff to stitch together supporting documentation and communicate through antiquated systems like fax and direct mail.
  5. Declines, decline management, and receivables are common challenges, even without a global pandemic. Staff in clubs across the country are already wearing multiple hats on any given day, and leveraging an automated system like the Card Account Updater is becoming increasingly imperative.

For the full webinar, read below or play the recording above.

Video Transcription

Jeff VanDixhorn: My name is Jeff VanDixhorn, the chief revenue officer at CSI Spectrum, Club Automation and TennisSource. I'm also a club owner and a founder of Club Automation. I've had the interesting experience of navigating this crisis as an owner of clubs still, as well as a provider of software and services. So this industry is obviously near and dear to my heart and excited today to at least share some information about best practices for managing chargebacks to your facility. I am honored to have a really amazing team on with us today. We have a number of people that come from our Daxko team and have just a wealth of knowledge.

They could all attest that I have been leaning into them constantly, both from supporting all of you, as well as supporting the GMs at the clubs I own. I'm going to allow them to introduce themselves before we start. But just to give you a little bit of a high-level overview. In terms of their role, they're servicing clubs across three main product lines. Our product line is the club market, CSI Spectrum, Club Automation, TennisSource, and then they're also servicing the product line under Daxko which services the majority of YMCAs and JCCs across the country, as well as boutique in Zen Planner, which again, services thousands and thousands of boutique facilities.

Again, a wealth of information, years of experience on this team. They're going to be able to present some information, but then also be available for some Q&A. With that, would you guys mind introducing yourself, and I'll go from top to bottom. Colby, do you mind starting?

Colby Watkins: Absolutely. Colby Watkins from Birmingham, Alabama. I am the full-service billing lead. I've been with Daxko for five years this summer.

JVD: Kate.

Kate Hardy: I am Kate Hardy. I'm the Senior Director on the Payments Team here at Daxko. I'm just excited to share with you today, some real actionable items to help with chargebacks and hopefully you'll get some good takeaways from the webinar today.

JVD: Angela.

Angela Masters: Hi, I'm Angela Masters. I'm the Director of AAC Services, and I have been with AAC for 15 years.

JVD: Great, thank you. Matt?

Matt Popinski: Hey everyone, Matt Popinski here. I'm the Senior Vice President of Payments across the Daxko portfolios. As Jeff mentioned, anywhere from nonprofits, to boutique, to clubs, a little bit of context. These folks that are going to share this information with you are seeing chargeback activity across many, many markets. We're looking at it from an aggregate perspective and we're also looking at it specific to the clubs. Colby, Kate and Angela have just a wealth of information and I expect helpful pieces of practical information that'll help you today. I'm super excited to be here and glad that we can take the time to share what we know with you.

How Clubs Have Adapted to COVID-Related Challenges

JVD: Great. Thank you all. Just to take a step back and set this up, it was interesting. It was five weeks ago almost to today, that we had our first webinar on the COVID-19. It was with Bob Boone from the Medical Fitness Association. At the time I remember Bob put his slides in and the slide deck basically said, clubs are not yet closing, which literally within two-day period, we all saw just our world changed completely. And at that point, things just went into lightspeed. So again, five weeks later it's really been a challenging time for sure. And I know for you as club operators, you know that firsthand. But I would tell you that I have been inspired watching all of you, watching the people that run our club business, just engaging in ways to generate revenue, engaging in ways, just as important if not more important, to engage with members, to stay connected with community.

It's been inspiring. On this side of the business, it's been equally as inspiring to see the team across our organization really lean into this and we have a thing we talk about here. You have two options in this situation, you can run into the storm or you can run from it. And this group has chosen to run into the storm with all of you. It's resulted in a number of things. If you've hopefully had a chance to look at the recovery toolkit. Again, best practices, in terms of tools that we're providing. We've come alongside in terms of, communication tools with SMS, virtual gym, with SugarWOD. We've also had some of our DCI partners come alongside. We had a webinar just this week with Medallia and they're offering that product from engagement with your members for free as well.

Super excited, hopefully you've taken advantage of some of those offerings, as well as, as I mentioned, webinars, data, all of those things, if you want to get more details on some of the things we've done and some of the information, again, you can go to And again, we'll include that when we send out this information at the end. The last thing I mentioned is data, and then every week I've been sharing a little bit of data on what we're seeing, and we're tracking data at a number of different points, some of which we're sharing now, some more of which we'll be sharing as clubs ramp up, but some of the data points we've looked at and really what led us to this webinar started with obviously as clubs started to close check-in.

That data point clearly tells us clubs are not operating. People are not coming into clubs for the most part, really just a few clubs across the country that we're seeing, that are still open. Connect data point, we really been watching is membership statuses, right? And it's been an encouraging thing, because we've seen that 93.5% of statuses of members within clubs are still in active status. Take the other two statuses, which would be cancellations, again, seeing that around 2.5%, and then on holds at about 3.5%. Again, the story tells us, people are committed to the clubs, when the clubs open, hopefully the runway to getting people back in the door will be a positive one. The other thing we looked at and we talked about is EFT billing in April.

Again, leading up to April 1, there's a big question in our industry, are club's going to run EFTs? How much are they going to run them for? And all of that. What we did see in April, was that 88% of our clubs ran an EFT. Now, it significantly lower than in March, but again 88% of the clubs did actually process an EFT. And there was a decent amount of revenue that ran through the system. Again, takes us to the next step, clubs are closed, EFTs are being run, what is that going to do to chargebacks? And what does that mean for clubs? We started watching that data, really early in April and as Matt and the team can attest, you have to watch that trend over a period of time, because chargebacks don't happen all at once at the front end of running EFT, it's a process.

So, we have tracked that data. We're going to share with you in more detail on this webinar. I shared a little bit in my last video last week. We do want to share with you what we're seeing on the data, and understand what that means. Really understanding, first of all, even what is a chargeback? I want to clarify what that is. We do want to talk about then implementing best practices. And again, this is important to, as we talk the data and Matt and talk about, what ratios start to trigger flags with merchant processing vendors. Again, what things can you do practically within your club to manage that effectively, to keep yourself in the right chargeback ranges. And then also some of the tools that we have that can hopefully help you in this process now, as well as when you start to open clubs again.

That’s our agenda today. Hopefully this will be a useful information. As Maria mentioned, we'll have Q&A at the end. Again, you can start to put those questions into the Q&A channel. We had a few come in ahead, so we're happy to walk through your questions as well. The first thing that we wanted to talk about and Maria, you can slide it, is, what is a chargeback? So, Matt, I just love for you to just define, to make sure everyone's really clear on what we're talking about when we discuss chargebacks.

What are Chargebacks?

MP: Chargebacks are a dispute from the cardholder, from the member, versus a charge that occurred previously. A member may be looking at their credit card statement and recognize an 83, 98 charge, whatever the charge number would be and say, wait a minute, I didn't receive the goods or services for which this charge is associated, or maybe there's a duplicate. Maybe there was some error in a system and I say 283, whatever charges, or they may see a vendor that they don't recognize, or there's a couple other reasons, but those are the primary two or three. In this environment, what we're seeing is an increase in chargebacks initiated through the member, to their card issuer, to their bank. They can do that online, they can do it via phone if they so choose.

They're effectively disputing the charge, saying that's not a valid charge and that causes and initiates a whole lot of activity behind the scenes. For you guys, that means that my $83 charge that I've disputed gets pulled out of your funds, right? And that initiated dispute filters all the way through the banking networks and then comes back to you and then you get notified of it. And then you have the opportunity to provide evidence that that charge was in fact a real charge, goods and services were provided. It's not a duplicate or whatever the case may be. In short, chargeback, is the cardholder, the member saying, well, wait a minute, that's not a legitimate charge, and therefore I'm going to initiate the refund process outside of the merchant. Right. And then it circles around into the merchants world.

JVD: Great. Thanks Matt. Could you just walk through, what is a normal ratio? What are we seeing trending after the April EFT? Where do we stand and then what is that threshold of danger zone?

MP: Yes. We've been tracking chargebacks for quite some time. What they're usually calculated in the industry as a percent of volume process. Okay. For example, if I process $100,000 worth of fees in a month, and I have $1000 worth of chargebacks, that's 0.01%. Right? As those chargebacks start rolling in the, the dollar value of the chargebacks is divided by the merchants total processed volume. All right. And we'll get into the tracking over time. What we want to make sure, and actually we've got data back, and we had a look at what did the recession look like in 2009. Back in March of 2009, the chargeback percentage for this space was 0.31%. That means $310 out of every hundred thousand dollars was charged back.

Now we'll get into the data and the trending over time in just a moment, particularly in this environment. But 1% is to Jeff, your question, is where we start seeing concerns pop up. And this is generally the line that will trigger activities from the processing side, from the first status, the Elavon's, the TSYS, the Worldpay, to start reviewing that account with more scrutiny. And that triggers another series of events, and so much that the processor may reach back out and say, hey, we need to re look at this business again. And that they request financials for the past three months, bank statements, things of that nature. And what they're doing is, they're having a look at what their risk exposure is. That's exactly what's happening there. I hope that answers the question for you, Jeff.

JVD: It does. And I think you have some data here that maybe we can just walk through to see how we've seen that trending.

MP: This is actually an alarming number. It's not unexpected, but it's alarming. We've seen 189% as far as chargebacks give, from the period of March 1st through the 21st, versus April 1st through April 21st. As recent as yesterday. And what this means in March, we saw about a third of a chargeback come into a club during that first three weeks. And then in April, we saw that increase almost triple to one chargeback come in. Now, what you're looking at right now, is that percentage that I talked about. February, $30 out of every $100,000 was charged back. That's not a massive amount of dollars. And then in March we saw $120 out of every $100,000 charged back by the member. And then when we look at April, now we're seeing $1,001 per $100,000 charged back, and that puts us over that 1% threshold. Now that's on aggregate, your particular club may not have these numbers, but this is what we're seeing across the club space. As I mentioned, that 1% is where there's risk reviews and additional documentation requests to come in.

JVD: It's actually interesting, Matt can attest to this. When I first saw the numbers trending in the 0.76, 0.8 range. My initial reaction was, given the clubs had run EFTs and we're processing revenue, wow, that's a positive sign. I think Matt, you looked at me with a little bit of concern and gave me an education on this 1% trigger point. Again, which led to us wanting to get in front of all of you, get on this webinar, so you understand the information, the impact, what you can do, as we move forward, especially in light of the fact that, we wanted to get this in before the May 1, EFTs run. You have this data to work forward into May. Thank you, Matt. Seeing the spike that we're seeing right now, can you just talk about what does that mean for clubs? Just in terms of what is the impact of the chargeback, I know you touched on that a little bit with the financial impact.

What are the Impacts of Chargebacks for Health and Fitness Clubs?

MP: When it comes to the chargeback, the immediate impact, of course, is that the value of that chargeback being pulled out of the account essentially. That means immediate financial impact. While the investigation is going on and the card issuers are working with the processors and then initiating the contact to you guys, the merchant in this space, there's additional fees that come with that, often charged through the processors to the club. There's not only that part of it, but as I mentioned, that 1% threshold requires by the card issuer, by the processors to get into those risk review situations. A lot of them are submitting data, submitting financials and whatnot, and the processors review that versus previous activity. But it also can result in certain circumstances where you may hear the word reserve be required, which is a concern, right? We don't want any reserves in place for any merchant across the board. But reserves could come up in the conversation or there could be a requirement placed upon the merchant by the processor, or maybe a letter of credit is required.

It triggers those financial risk related items. Again, it doesn't necessarily apply to everyone on the phone call, but if you've got a huge amount of chargebacks, I think the expectation would be is that you'll be asked for some supporting documentation as processing resumes or returns back to what we think would be the new normal.

JVD: Right. Thank you, Matt. Obviously chargebacks are not a new thing. This is a massive spike. I look back at the days, 20 some years ago when I started my club business and personally handled the paperwork and the back-and-forth process and literally one of my least favorite jobs ever. But can we just talk about, and Kate maybe you can talk about, what is the typical process that we're seeing in clubs right now, and then we're going to maybe we'll preview forward to some of the tools that can make that a little bit easier.

Current Chargeback Processes

KH: Absolutely. Great question. I'm sure people on this call have had to deal with a chargeback in the past. Traditionally the chargeback notice is physically mailed to the address on file. The notice contains summary information about the chargeback. The original transaction date, the amount, the loss full of the cards, the reason for the chargeback, and then most importantly, the deadline to respond. We always need to remember that a chargeback is incredibly time sensitive, is usually only around 10 days that we have to respond, to send our supporting documentation. I mean, you can tell just by looking at that flow itself, how likely that is. Add to that, that generally when we respond to a chargeback, we either have the option of faxing the information or mailing it back, again, you're adding another few days to that process.

Once you do fax it or mail it, really there's no visibility. It goes into that process of backup black hole. You have to hope that what you've said is good enough for that chargeback to be reversed. I think just the flow itself is incredibly lengthy with very little visibility. And of course, especially during these times when a load of our clubs are closed or suspended and potentially, we don't have the teams to take receipt of those notices in the first place. Definitely today, not an ideal process for managing those income to chargebacks.

JVD: Okay. What happens if you miss the time deadline?

KH: That’s it. It’s a hard cut, so they do not have any flexibility. There's no pleading your case after that date. That is a hard deadline. If the processor doesn't receive your response on or before that date, you will lose the chargeback and there was no way to circle back around and re-initiate your response.

JVD: Building on that, could you just talk about maybe some of the best practices that you've seen in just generally handling chargebacks at club?

Chargeback Management Best Practices

KH: Absolutely. I think we really wanted to give you guys some takeaways today, some actionable items, that we all know that chargebacks are going to happen even outside of this COVID situation, some good things to put into place just as you look forward, as we aim to recover strong to come out the other side of this. Really there's two main areas, of two chargeback and reasons that I want to focus on. And this is where we've seen the increase in chargebacks that Matt spoke to, over the past few weeks.

Chargebacks Initiated by Refunds Not Issued

KH: The first one is chargebacks initiated due to refund not issued. Refund not issued chargebacks. And this basically means that the member is claiming that they have spoken to the club, they've requested a refund, but it has not been issued in those cases. I'd to talk through four steps and scenarios that we can use to combat those chargeback reasons.

The first one really simple, and you guys probably do this today, is make sure you have a solid we fund policy and that your team is trained on that process. That should live in your membership agreement. If you take payments online, make sure that's listed online as well. If you do receive a call from the member requesting a refund, lean into that process, that's what we're going to rely on, to make sure you have a process and that your team are trained. The second recommendation around refund requests is to process them in a timely manner. We would recommend same day. What we want to avoid is putting these refunds to one side and then processing the once a month or delaying that refund process, because inevitably in that gap in between the member calling, and then seeing the refund, they can issue a chargeback.

Make sure we are issuing those refunds timely as they come through. The third recommendation is that, if you have received a chargeback notice, and you know you've already issued a refund, please always respond to that chargeback with confirmation of that refund. If you don't and you ignore that notice, you can be out of the funds twice, once through the original refund, and then once again, through the chargeback. So again, if you receive a chargeback notice and you know you've already issued that refund, respond with proof of the refund, to the notice. And again, make sure you do that by the deadline. And then the final thing around the refund process is, if you receive a chargeback, never issue a refund on that transaction. I know it can be tempting to say, Oh my gosh, I don't want to go through the chargeback process, let me just issue a refund to remedy the situation. That way the member gets their funds.

Again, you're going to be in that cycle of being debited the money twice. You'll have issued the refund and then once through the chargeback. If you receive a chargeback notice and you genuinely think the member is entitled to these funds, allow it to flow through the chargeback process. I would certainly always recommend still responding. You can do a little note in there, typed note or a handwritten note, just explaining the situation and allow the member to credit the funds through the chargeback flow. Four steps there on the refunds not received.

Chargeback Initiated by Services Not Provided

KH: If you guys have seen chargebacks come in over the past two to three weeks, you'll probably be familiar with this. The services are not provided. Especially during these times, when we have mandated closings, extended periods of time where club's physical location is closed, how do we handle those chargebacks that come in? The first thing is to continue to offer value to your members. This could be through remote workouts, online tutorials, daily check-ins, just any way to maintain the member relationship and still offer value. And then a second is to maintain as much normalcy around billing as possible. Jeff mentioned the timing of his webinar today. We wanted to get out in front of you before that May billing date. That's what we mean by maintaining as much normalcy around billing is, we encourage you to make billing decisions prior to running. What we want to avoid there is running billing for all of our members and then issuing all of the refunds again a week, 10 days later. That's unusual activity on your merchant account and can lead to chargebacks in between. So just staying one step ahead of that billing process.

JVD: Great. Thank you, Kate. And again, all of this is in an effort, one from a standpoint of, as Matt talked about receiving the money from your members, but also not getting yourself into that at risk profile. Correct, Kate?

KH: Absolutely. That 1% is a really critical number. At that point you ended up on the radar of the card brands. These are in particular in this case. We just want to avoid raising any red flags where possible.

A Chargeback Management Tool

JVD: I know a number of our customers do take advantage of some tools. I wanted, if you or Matt could share, or someone could share just some information about, some of the automated tools. And I think, now more than ever, not physically being in the club, as you mentioned, Kate, maybe getting the mail late, the time is really important. We've had, again, a lot of people utilize these tools, but these tools I think become even more valuable now, potentially.

MP: I can take that one, Jeff. One thing that we wanted to bring to everyone's attention is an online chargeback management tool that eliminates the need for, or the requirement to check the mail, to fax, to handle those as manual snail mail processes. Right? That tool is called, the Dispute Manager. And is part of the Business Track offered by First Data. We wanted to make sure that you all aware if you're on Gains payment processing, that this is available to you. There's a minimal fee associated with it. But what it does is it gives you the opportunity to, one, receive an email notification that chargebacks have come in or a chargeback has come in, gives you the option to respond to that chargeback with the associated evidence, which could be the government issued mandate around closing your facility, around one of those goods not provided chargebacks, you could include that. The membership agreement, whatever the refund, the proof of the refund.

Electronically through this platform that goes back into First Data, it also gives you the opportunity to see where that chargeback status sits day-by-day, date and timestamp, the comments that you put in, the dialogue with the team on the dispute side at First Data and where that whole dispute and that resolution process stands. This gives you the opportunity to avoid missing a deadline because maybe the post isn't checked or the staff member that usually handles this at the office or at the club is not there. This gives us the opportunity to handle this electronically and at a remote location. Again, I think we all would agree that the old process, the paper, the faxing is fairly archaic. We did want to just bring this to everyone's attention, that this is available. This is not an exclusive tool to First Data, I believe that other, and I've actually seen others their processors that have something similar to this. I'd encourage club owners, club operators, that if you're not within our payment services, if you're in not using someone else, to inquire about an online dispute manager tool.

JVD: Thanks, Matt. It's interesting. I think we've hit an interesting period of time in this whole cycle. We're starting to see some light at the end of the tunnel, right? Obviously, we saw that states are starting to open up differently, obviously, and we'll see how that's navigated. Fortunately, gyms were in phase one and again, still understanding exactly what that means for us as businesses and how many people can come in and how can we open, et cetera, and things like that.

Preparing for Future Payment Challenges

JVD: But I really feel we've hit a next, and we worked through the whole wind down, how do we engage during? We're starting to see that and hopefully all of you have been thinking about the wind backup, which will be a lot more fun than the wind down for sure. But I think it does present another set of challenges. I was talking to Jim, one of our facilities last night, and there's another whole set of things that, we need to think about as club operators, is, we're going to have a lot of things to do to get the club back open from a facility standpoint, from a class standpoint, from a membership billing standpoint.

I'm anticipating there's going to be more volume back into a back office on, questions potentially on membership, potentially more declines than normal. Again, we'll see how that all plays out, but these are things that we're thinking about. What we want to do is just share some information about some of the offerings that we have. And I know a lot of you on this call, have you see who joined, already use some of these offerings, but wanted to just talk to you about some of the tools that you could utilize, thinking forward over the next weeks and months. Colby, would you mind just sharing a little bit about card account updater and how that product works and how that can help clubs going forward?

CW: Absolutely. Even during normal times when an ongoing global pandemic, declines and decline management and receivables in general are a tried-and-true challenge of clubs across the whole country. That's only becoming more complex and expounding as the complications of reopening, staffing. In clubs across the country, the staff is already wearing multiple hats on any given day. That's only going to go to become more so as we start to come out of this lockdown phase. Leveraging automated systems like the card account updater, which is a service that automatically takes the billing method of a member and basically checks it against the network, to see, has that card been updated on the account. Have they, been issued a new card that, basically there's a decline prevention service there that, one, your staff doesn't have to make calls proactively to check members accounts to see they haven't, if they've got a new car that they need to update. If they do get a decline, they don't have to call that number to reach out and pull them from their day to ask them for the new billing method on the account.

It'll do all of that for you on the back end, freeing up your staff to, focus on other priorities. Aside from that, and then also cut down on decline events as a whole. That's a great preventer of taking stuff off your plate, right there, and allowing your staff to stay more focused on other matters that may have equal priority to your business. And then also leveraging billing services. Billing services like full-service billing, there are teams of folks that will essentially streamline the outreach effort to resolve those decline events. Your staff isn't having to stay focused on persistent notifications. Sometimes it takes two, three attempts to reach out to a member, to resolve a decline, and that can become really time intensive, especially if you've got competing priorities, pulling you away from those items. Utilizing a team or service that will stay completely focused on those receivables, will keep you from having a growing balance and an aging balance that becomes even more complicated or challenging to recover.

JVD: That's an interesting segue. And I know a number of you in this webinar use the full-service billing with us already. Full-service billing has been an offering that we started to put out a little while ago, it's actually been one of the fastest growing offerings or things people are taking advantage of. It's something that's newer to our club market. But it's not something newer to the team that does it. Angela Masters is actually here with us, originally with Affiliated Acceptance Corporation, now part of our portfolio team. And again, we've seen a tremendous growth in this, and it's really that idea, like Colby was talking about is, partnering with us and our team to handle some of that back-office work. Angela, I would love for you just to talk about, what does that entail? How does that look? I think, club owners I've talked to in the past, there's a concern. Does it feel like it's part of our club? Now, others have said, it's actually great because, we have someone that, we don't have to walk out and have that tough conversation. We can utilize someone for that. I'd love for you just to talk a little bit about the dynamics around this offering.

AM: Sure. Jeff, thanks. Like I said before, I've got a team of experts that work for a company that's been in business for 30 plus years. When we say we tailor the services, we do, it's not cookie cutter. We actually set it up the way that you want it to be set up, the way that you want your interactions to be handled with the members. We are an extension of your values and we really take a lot of pride in that as well. Our NPS is something that we're very proud of too, and that's an average of 45. And I think that speaks for itself and really shows how the success of the services and the positive interactions that we're having with the members.

JVD: Angela can attest to this, when we first started launching full-service billing a couple of years ago, I actually went down to her office and sat with the group of people that does this on behalf of the club market for both CSI and Club Automation. And I was a little skeptical as a club owner. Having sat there, it took me about half a day to realize these are professionals that know what they're doing, and it's been exciting to see a lot of our club groups taking advantage of this. Again, as Colby mentioned earlier, free up time to do other things. Again, these are some of the tools and the things that we're coming alongside of you with. Would you not want this to come across as a sales pitch? If these are things that work and you can take advantage of, fantastic. If you have other means of handling these things, that's great too. Again, our goal is to really partner with you, make sure you're aware of all of your options. And if you're interested in more information, we can certainly get you that, and we'll provide that in a follow up. With that, anything else to add from the panelists before we jump into Q&A? All right, take it away now. We'll take some questions in here.


MM: All right. We have received quite a few questions. If you haven't had a chance to ask questions yet, or you're just thinking one through, please feel free to ask them using the QA tool at the bottom. But one of the first questions was from Lisa. And she was asking when exactly do the funds get removed from your accounts after you received notification of a chargeback? Matt, I don't know if you would like to answer that question.

MP: I'll defer to Kate. She's...

KH: I can take that one [crosstalk 00:37:29].

MM: Yeah, Kate.

KH: No, good question. I mean, given that today's environment or the traditional method is to receive that mailed notice, a lot of times those funds are debited before we even know a chargeback has occurred. Historically when the funds were debited, it was driven by the chargeback reason. I think nowadays, especially given this environment; the processes are very quick to debit those funds. Matt spoke to some of the impacts of a chargeback, and they are very quick to go into your bank account and deduct that chargeback dollar amount. Even if it doesn't get paid back to the member of that point, they just put it on hold. They want to make sure that those funds are available for them to take. One thing I would open up to the group and I know we have some people that are not on our payment services on the call.

Those that are, I would advise you to lean in to AccessOne, that's the online reporting tool. If you have access to today, if you don't shoot an email to support and we can get you set up. In there, it's got a really great landing page with summering data, and there is a chargeback hyperlink in there as well. It's not going to give you the chargeback notice, but it will certainly give you a summary of the dollar amount, the date, the loss for the original transaction. I'd recommend logging in there every couple of days, and just click on that notice, if you see a number and a dollar amount in there, so that at least your way that that's coming in and you can always place a call to the chargeback department and request a copy of the notice. I would say in this current environment, you expect the charge about funds to be debited immediately and just being into AccessOne and really utilize that for notification. Or if you decide to go with dispute manager, you can set those notifications to be emailed as well, just before.

MM: Another question that we've received from PJ. Have the processors indicated that they are loosening their guidelines and penalties during this time, as I imagined as volume of chargebacks would be pretty widespread?

MP: I can answer that one. That's a good question, PJ. It's a moving target, unfortunately, as the environment changes, so do the card brands in their behavior. I will say our recommendation, and I think I mentioned this before. Chargebacks come in and the reason is because goods or services were not delivered, to attach that government notice that your club need or state or locale, whatever, was required to shut down during the period of time that that chargeback was initiated, and send that back as the piece of evidence as you're working through the chargeback process. Our expectation is the card brands will relax a little bit. But again, it is a moving target, based on it closures and just the environment that we're in today. Kate, anything to add to that?

KH: No. Well, yes. I think the only thing I would add to that, it's just that, at Daxko company level, we are a member of a number of associations that lobby for our customers. We have been putting pressure on them as well to come back and help our customers. Don't feel you're alone in that fight for chargebacks and that one's hearing you further up the chain, we're certainly passing that message on continually. I think expect updates there, for sure.

MP: That's good.

Maria Morton: We've received a question that's more general about members reactions. They were referencing clubs still charging memberships, and we received a similar question as well. Clubs charging memberships of their members, even though they're closed. What was the members reaction? No,[crosstalk 00:41:30].

JVD: I can take that. I think that where we've seen that done really in avoiding the chargebacks, is a really clear communication to the members and then the communication back accepting those fees. We've seen all the way ranging from reducing membership fees, giving people the ability to keep a full membership fee, because they want to support the club or charging a membership fee, but then offering a credit over a number of months going forward to help with cashflow. Again, the critical piece there, is the communication between the club and the member and reciprocation back, accepting that. When we see that happening, obviously there's receptivity from the membership. What does not work is, not communicating, charging. You're going to clearly expect more chargebacks, not as good of a reception from your members.

MM: I want to pose a question that we actually received before the webinar. This person said they've been getting a lot of chargebacks and their account is getting dividend right away, which I think Kate, you have talked about in that first question. They're asking, how can they make it so that they don't get debited right away before they're able to share their information, and also what information do they need exactly to be guaranteed to win a dispute?

JVD: I can take that one. Unfortunately, part of the merchant agreement across any process that you have, gives them the ability to debit those funds. That's just that a risk of accepting debit and credit cards as a method of payment. There's nothing that we can do to prevent that from happening. As far as the response, I think a lot of people feel they can only submit supporting documentation as far as a receipt or a copy of a member contract. You're well within your rights to type up an explanation. Don't ever feel you're limited in what you can respond with, and the more information and the more background you can provide, the better. One thing with dispute manager that we've seen at least, is that you can also see a copy of exactly what the member or the customer has submitted with their chargeback, which is really helpful. It adds tolerable backgrounds to that one little, three-word reason that we traditionally see. That helps a lot in knowing how to respond, rather than just having that small code. But I would encourage you all just to submit as much supporting documentation as you can, don't ever feel limited or that you're sending too much. There's no such thing.

MP: And I might add to that, and I think there's a question around this that's popped up Kate, that this might be a great time to take care of. Is a lot of time consumers initiate chargebacks as a retroactive way of canceling or what they believe would be a retroactive way of canceling a membership. For example, if your policy says, they must cancel within 30 days and they say, I forgot or I don't go to the club anyway, after that bill comes in, they initiate a chargeback. I think in those situations, Kate, to your point is, to write out the explanation clearly, attach the membership agreement, attached to the policy that says written cancellation must be received within whatever your policy states, and submit that back through the dispute process.

MM: We've had a couple of questions about how someone gets informed that someone has disputed a charge. We've had one where it's just that general question. We've also had one person Lisa asked if it's time sensitive wise, it's sent through the mail? And then we've also had Amanda points out that she's actually never received written notification of chargebacks. She always discovers them when she's trying to balance her bank statement to her credit card totals. Do you guys have any advice or feedback or things to look out for with that?

KH: I would just encourage you. I love the fact that you're finding these when you are reconciling. During this period of time, as we're in this COVID environment, I would encourage everyone to reconcile every day. Just in that bank account and make sure that the funds that you've received match the reporting that you have in the software. That's just good business practice during this time. And then I think, AccessOne, again, I would recommend leaning in there, that will populate same day that the chargeback is issued. You can get that little summary notification at least. It's on your radar. And then dispute manager, if you want those email notifications. I think we're all in agreement that snail mail is not ideal. We've certainly pushed back on the processor. I think it's just old systems that they have, and old ways of generating that notification. And I think probably most people in this call receive their monthly statement via email. To the question is, why can't we get charged by notices the same way? And really dispute manager is First Data's tool for that.

MM: Great. We've got time for just about two or three more questions. We have a question about card account updater. What is the expected return update rate for the tool?

MP: I can take that one. [crosstalk 00:47:02]. Colby you're closer.

CW: It can definitely vary based on the types of cars that your members have. Some banks don't opt into the network and then I think MX is still on its own separate network. It can definitely vary depending on the types of card brands that your member base carries, but it does hover somewhere in the realm of 40%, I believe. Kate can correct me if I'm wrong. Is that right?

MP: Yeah, that's right.

KH: Yeah.

MM: Great. Awesome. We had one last question come through. How long does it take for an organization to set up dispute manager?

CW: I can take that one. If you'll submit a request to the email address showing right here,, we'll get set up within 48 hours.

MM: Great. I think that just about wraps up the questions that we have. I'll pass it back over to Jeff.

JVD: Cool. Thank you, Maria. Just another thanks to this panel. just a wealth of knowledge and information. This is also, obviously you can reach out to our payments team directly as you're navigating these things and you need more help and resources. And again, just a reminder, the landing page,, is a great place for you to get this recording. If you want to listen to it again, resources and things like that. One thing I'll just leave you with and Maria, you mind going back one slide?

MM: Of course. Bear with me one second. There you go.

JVD: It's interesting. I was looking at this slide. This happens to be a picture from one of my clubs, College Park Athletic Club, which has that actual court number three is become stadium court the most expensive nightly tennis match against my son, over the last a week and a half. It’s ironic that we have that picture up there. It's become my personal workout home gym. But what's interesting having been in the club, just walking through on a daily nightly basis, utilizing it. I just want to encourage you guys, what really has struck me walking through that facility is, without people in it, it's just a facility. There's not the energy that you feel when you walk into a club. It's really just a building, and a club is not about a building at all. We've always said that and I think more than ever, we realize this, being a part of a club is being a part of a community. Being connected to people.

I know that there's just going to be a ton of energy as we come out of this. There's still uncertainty as to how that's going to look, but just an encouragement to you all, there will be a recovery. These facilities will be filled with people, full of community. And that's really, again, what being a part of a club is. Keep up the good work as we are in this with you. And we will recover together. Thank you.

MM: Great. Thank you all.

MP: Thanks. Thank you.

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