Who is responsible for 'Chargebacks' to Even Hotels, and what is a Chargeback?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
You are responsible for all Chargebacks and adjustments associated with the transactions that you submit for processing.
While we can attempt to reverse a Chargeback to the Issuer, we can only do so only if the Issuer agrees to accept it or the Card Organization requires the Issuer to do so after a formal appeal process.
Sometimes, your customer may be able to successfully chargeback a Card transaction even though you have provided your goods or services and otherwise are legally entitled to payment from your customer.
While you still may be able to pursue claims directly against that customer, neither we nor the Issuer will be responsible for such transactions.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, the franchisee (referred to as "you" or "Hotel") is responsible for all chargebacks associated with transactions they submit for processing. A chargeback occurs when a customer disputes a card transaction, potentially even after the goods or services have been provided. While Even Hotels may attempt to reverse a chargeback, they can only do so if the card issuer agrees or is required to do so by the Card Organization after a formal appeal.
Even if a customer successfully charges back a transaction, the franchisee may still be able to pursue claims directly against the customer. However, neither Even Hotels nor the card issuer will be responsible for these transactions. This means that the franchisee bears the financial risk of chargebacks, even in situations where they have fulfilled their obligations to the customer.
Furthermore, the FDD outlines specific scenarios where the Hotel assumes sole responsibility for chargebacks. For example, if the Hotel disables the CVV (Card Verification Value) prompt for manual transactions or suppresses preferred Card Verification Method (CVM) requirements for chip cards, they acknowledge and agree to bear the liability for any increased interchange charges, merchant services charges, fraud claims, or chargebacks resulting from such actions. FreedomPay, the provider of the Secure Switching service, will not be liable for these chargebacks.
In cases where a consumer disputes a transaction because the preferred CVM was not used, the Hotel may be liable for fraud or chargebacks, even if it was an EMV transaction. The franchisee is also responsible for chargebacks and other amounts arising from fraudulent activity processed through their merchant systems, regardless of any AVS (Address Verification System) response received. This highlights the importance of implementing robust security measures and adhering to card processing protocols to minimize the risk of chargebacks and associated financial losses.