Reducing Chargeback Risk in the Hire Industry

Chargebacks (also called disputes) are a reality for any business accepting card payments. In the hire industry, they are especially relevant because payments often happen at multiple stages—pre-payments, deposits, bonds, and post-hire adjustments (e.g. damages or cleaning fees).

While chargebacks can’t be completely avoided, businesses can reduce the risk of frivolous or unwarranted disputes and strengthen their position when contesting them.

Card networks (Visa, Mastercard, Amex, eftpos) allow customers to challenge charges in several categories. According to Pin Payments, disputes most commonly fall into:

• Not as described – customer claims they didn’t receive what was promised.

• Not recognised – customer doesn’t recognise the charge on their bank statement.

• Fraud – cardholder claims they didn’t authorise the purchase (e.g. stolen card).

• Admin error – duplicate billing, wrong amount, or missing refund.

In hire, these often map to:

• Surprise post-hire charges (damage, cleaning, late returns).

• Misunderstood bond handling (expecting a refund vs. retention).

• Stored card charges made without the customer being “present.”

Risk Profile:

• Generally low-risk if clearly invoiced, receipted, and linked to a booking.

• Customers usually accept these as part of confirming a hire.

• Risk increases if cancellation/refund policies are unclear.

Defensive Measures:

• Clearly outline whether deposits are refundable or non-refundable.

• Reference signed hire terms on the deposit invoice or email confirmation.

Risk Profile:

• Can be processed as either:

  • Upfront charge (higher risk if customer expects refund later).

  • Pre-authorisation/hold (preferred: card is only charged if needed).

• Disputes often arise when customers feel unfairly treated in whether bonds are refunded or retained.

Defensive Measures:

• Where possible, use pre-authorisations rather than charging and refunding.

• Make bond terms very clear (refund conditions, possible deductions).

• Tie bond handling explicitly to signed hire agreements.

Risk Profile:

• Highest chargeback risk in hire.

• Customers often dispute these, claiming they never authorised the charge or that the charge is unfair.

• Even tokenised “stored card” charges can be disputed as “unauthorised.”

Defensive Measures:

• Always capture a digital signature against Terms & Conditions before or at dispatch.

• Ensure terms explicitly state that additional charges may apply for damages, cleaning, late returns, etc.

• Take time-stamped photos at dispatch and return.

• Provide itemised invoices for post-hire charges and email them to the customer immediately.

• Use clear, customer-friendly language: “By signing, you authorise us to charge your card for additional costs in line with these terms.”

Risk Profile:

• Similar to deposits: relatively low-risk if the customer understands the total and has documentation.

• Risk increases if later surcharges (e.g. excess usage) are added without clear pre-warning.

Defensive Measures:

• Ensure the hire contract or quote is explicit about what’s included and what may be billed later.

• Where possible, get pre-hire agreement in writing or digitally signed.

Even with best practices, disputes can still occur. In Pin Payments’ words:

“A dispute occurs when a cardholder questions the validity of a transaction and contacts their card issuing bank to demand a refund. Disputes may arise for reasons including ‘not as described,’ ‘not recognised,’ ‘fraud,’ or ‘admin error’.”

How to Respond Effectively (via Pin Payments dashboard):

1. Act quickly – respond before the scheme deadline.

2. Provide clear evidence:

   • Signed hire agreement / T&Cs.

   • Digital signature authorising extra charges.

   • Pre- and post-hire photos or inspection reports.

   • Invoices, receipts, or communication logs.

3. Explain the context – clearly link the charge to the hire contract and show how the customer agreed to it.

The more documentation you can provide, the stronger your case if the dispute escalates.

• In-person EFTPOS with PIN – lowest risk, strongest defence.

• Tap/contactless – convenient but slightly more disputable.

• Online gateway (Pin Payments) – higher exposure to disputes, but adds flexibility (tokenisation, automated billing, post-hire charging).

Hire businesses must weigh customer convenience vs. chargeback risk. By combining secure payment methods with clear agreements and proactive communication, they can enjoy the benefits of online payments without exposing themselves unnecessarily.

This guide is provided as general information only to help our customers understand chargebacks in the hire industry context. We are not a payment provider or financial institution, and we cannot provide legal, financial, or compliance advice. For specific advice about chargebacks, disputes, or payment processing, please consult your payment provider (e.g. Pin Payments) or seek independent professional guidance.

For hire businesses, the strongest protection against unwarranted chargebacks comes from documenting customer consent (digital signatures), handling bonds transparently, issuing timely invoices, and using the Pin Payments dispute process effectively.