A Complete Guide to Chargebacks in The Entertainment Industry

El-Mehdi
,
CEO of ChargePay
|
May 13, 2024
|
11
read
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A booming entertainment business is pretty difficult to run by itself, and you wouldn’t want disruptions that could hurt your revenues.

Chargebacks are major blockers of revenue and cash flow if not handled properly. Currently, the media and entertainment industries have a chargeback rate of 0.56%.

Even if it is a concert you deal with, a streaming platform that you handle, or sell digital content assets, you need a chargeback management system in place. A chargeback management system is very crucial to keeping your revenue intact and maintaining customer relationships and trust.

The industry’s general transactions are tickets and subscriptions, among many other types. And chargebacks for services like entertainment occur on account of disagreements with charges, content purchases, or unauthorized access.

Are entertainment chargebacks the same as other chargebacks?

Based on the nature of transactions in the entertainment industry, chargebacks and their reasons are not the same as other chargebacks. There sure are some similarities, but the approach to dealing with entertainment chargebacks should not be similar to others.

Chargeback reasons 

Reasons for entertainment chargebacks are pretty different. While a customer raises a chargeback for quality or delivery issues in another industry, here it is often related to dissatisfaction with events, performance, or experience. A person not being able to attend a concert for reasons like technical issues may lead to chargeback.

Reservations and hiked prices 

Ticket prices, though fixed at a point in time, will not remain the same. High demand may lead to hiked prices and eventually disputes over billing. Other factors related to ticketing that lead to chargebacks are - double-charging, overbooking, or discrepancies between the advertised and actual event details.

Refund norms

Refunds in the entertainment industry do not work like others. While an eCommerce product comes with return and refund policies, most of the event tickets are non-refundable in nature. This is where the dispute arises, and customers feel they are entitled to a refund for whatever reason. 

Chargeback resolution process

The process of resolving a chargeback is never the same for the entertainment industry. There are additional layers of confirmation included. Like, the customer should not only provide proof of ticket purchase but also prove they attended the event. 

Subscription service

For subscription-based transactions, customers raise chargebacks for reasons such as unauthorized service, dissatisfaction, renewal charge disputes, add-on charge disputes, and more.

Why do chargebacks occur in the entertainment industry?

There are a bunch of chargeback reasons unique to the service industry, like entertainment. Here’s a walk of the reasons to be aware and build strategies to deal with them. 

Unauthorized transactions

Frauds like credit card theft, identity theft, and more are not foreign to the entertainment industry. Fraudsters are everywhere, trying to scam people and make money. Secondly, unauthorized transactions such as data breaches, billing errors, or misunderstandings are also part and parcel. Here, the customers are given subscriptions they did not avail of. Customers resort to chargebacks if any such issue happens to them. 

Unsatisfactory service

Unhappy customers who do not like the event, concert, or digital content also lodge a chargeback. Other unsatisfactory issues are technical issues encompassing streaming, incomplete content received, digital quality issues like low pixels, and more. Misleading advertisements, sales tactics, and half-baked information with hidden charges are other issues facing the industry, as they lead to non-satisfaction.

Billing discrepancies

Misleading pricing information, hidden charges, double charges, and hiked prices are the common reasons for billing-related chargebacks. Other reasons may include event cancellation, rescheduling, changes in the event venue, or more. If customers feel the merchant is responsible and hasn’t refunded the correct amount, they choose to issue a chargeback request.

Cancellation or renewal issues

When customers have a hard time canceling or renewing a subscription, they request a chargeback. It could be because they were not aware of the process, the charges, or the fee (if any). Any discrepancies in the charges during the process of canceling or renewing a subscription also lead to a chargeback.

Event-related problems

Any aspects of the event, such as last-minute changes, schedules, access, cancellations, etc., may also lead to chargebacks. It can be as simple as the overbooking of a venue or changes in any element of the event. 

Customer service

Customer service is an active requirement for an event or a digital good for attendees with queries. Dormant communication channels, nonresponsive customer representations, or long wait times may as well cause chargebacks. 

How to manage entertainment chargebacks?

As an entertainment service business owner, you need a strategy customized for this industry. But, here is the general process:

  • The customer initiates the chargeback process with either the merchant or the issuing bank.

If initiated with the issuing bank:

  • The bank inspects the case and, along with the acquiring bank, issues a chargeback. 
  • The transaction is now reversed, where the merchant’s account is debited and the customer’s account is credited.
  • The issuing bank then informs the merchant about the transaction and gives a reason code along with it.
  • The merchant then investigates the chargeback and either accepts it or disputes the chargeback.

If initiated with the merchant:

  • The merchant receives the chargeback request along with the reason.
  • The next step is an investigation where the merchant investigates the authenticity of the chargeback and prepares a response. 
  • Now, the merchant either accepts the chargeback or disputes it with proof of transactions.
  • If accepted, the merchant gets in touch with the acquiring bank to release the funds. If rejected, the customer is informed of the decision, with documentation as proof.

Chargeback codes: keep yourself and your team aware of the designated reason codes. They may differ in the entertainment industry. If you have the reason code right, you have the winning advantage. 

Credit card

Can entertainment chargebacks be avoided?

Chargebacks cannot be 100% avoided but can be mitigated to a great extent. Here are a few tips to help you prevent chargebacks from happening in the entertainment service industry.

  • Transparency in Billing: make sure you have a clear framework for billing. Lay down all prices, intervals of billing, any extra charges, add-on charges, hike possibilities, and just about anything related to the invoice.
  • Prioritize security: deploy fraud prevention measures in-house or with the help of advanced technology providers. Also, keep a check on unauthorized access by deploying strong authentication measures. 
  • Clear refund policies: you should be clear and concise about your refund and cancellation policies. Mention it in the ticket or subscription if it is non-refundable to set expectations.
  • Open communication: have an expert team of customer service reps who are proactive in addressing queries. This will help you prevent chargebacks from happening and also keep your customers happy. If unsatisfied, have them offer a discount or cashback-like rewards to win your clients.

How can ChargePay help manage entertainment chargebacks?

The amazing team of analysts you’ve put together for chargeback management can bring you more business. Relive them from the daily chores of manual chargeback reporting work with automation. ChargePay uses AI to help you automatically contest, manage, and win chargeback disputes without the burden of manual effort.

Features like AI representments and real-time actions can help you get an incredible win rate, and reclaim your lost revenue. Optimize your entertainment operations to unlock new business avenues. Get features customized to the entertainment industry and your unique business model.

Benefits of choosing ChargePay as your chargeback management partner

  • Recover over 80% of lost revenue with ChargePay's automated chargeback management.
  • Free up valuable team hours and see a 68% increase in saved revenue.
  • Utilize AI-powered automation for seamless chargeback resolution.
  • Boost your reputation with acquirers and issuers, achieving a 3x chargeback win rate.

Join the chargeback-winning team on the streak today. Choose ChargePay!

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El-Mehdi
CEO of ChargePay
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