How to Protect Your Auto Repair Shop from Chargebacks

Read time: 3 min

Add as a preferred source on Google

Always Get Your Guests’ Consent Before Doing Work

When your service advisors take guests through the repair order, they should listen carefully to what the client wants; service advisors can never be too careful.

If that means spending some extra time to review the repair order with the guest, it’s time well spent.

A little more time spent on the front-end can save you a lot more time on the back-end. Once the RO is thoroughly reviewed, you can get either written or verbal consent for the work and the cost. It’s worth keeping in mind that it’s easier to document written consent.

Shop Tip: Use the Courtesy Inspection to Guide the Approval Process.

Using a shop management system like Tekmetric where the guest can see the courtesy inspection and click through and select the work they want and the work they want to put on hold can set clearer guidelines for both the guest and the service advisor.

Establish a Transparent Relationship with Your Guests

Providing excellent customer service is good practice for any auto repair shop, but it also goes a long way toward preventing chargebacks.

Let your guests know that you’re committed and dedicated to fixing their problem, even if that means taking their vehicle back into the shop if the guest is not 100% satisfied.

If you make it clear to your guests that they can come back to you about any concerns, they are far less likely to go to their bank or credit card company first. And it’s better to do a little extra work to ease the mind of your guest than it is to give away an entire repair order for free or go through legal hassles.

Shop Tip: Set a Clear and Easy Return Policy.

If your shop doesn’t already have one, consider establishing a clear and easy return policy and make it visible to guests via signage or with messaging on repair orders.

Simple policies such as “If you’re not satisfied, call us, and we’ll make it right” can go a long way in terms of letting guests know they should go straight to you if there’s something wrong.

Use an Address Verification System (AVS)

Sometimes, chargebacks happen because a guest used someone else's card or because of a clerical error. Times like these are when safe-checks built into your payment process come in handy.

If you’re processing payments over the phone, be sure to use an address verification system. An AVS ensures that the cardholder on the other end is who they say they are. Address verifications are crucial to dispute claims with a bank or credit card company when you’re unable to acquire an in-person signature.

Tekmetric’s payment processing platform, Tekmerchant, supports AVS, and we recommend using it to secure all over-the-phone payments.

Keep a Record of All Transactions

In order to protect yourself from any unreasonable chargebacks, keep a record of all approved work, signatures, and work completed, with images if possible.

Shop Tip: Use a Software Management Tool that Automatically Tracks Transactions.

Tekmetric makes record keeping and retrieval easy because it stores all repair orders and completed jobs within the system and allows for easy search of completed work. Technicians and service advisors can even upload images of repair work to track all completed repairs.

Other Best Practices When Processing Payments

Along with AVS, there are several other useful practices that can help your shop avoid chargebacks due to minor payment processing errors:

If you call for authorization, record the authorization code, date, time, credit representative’s name, and transaction dollar amount authorized.
Always enter the exact agreed-upon amount. Do not round up or down. Leave no discrepancies whatsoever on price between you and your guests. If the price must change due to parts, labor, or additional work that was not found during the inspection process, always get documented consent from the guest before adding more work and changing the price.
If a transaction is entered incorrectly, make sure that it is completely voided prior to reprocessing. This will help to avoid duplicate transactions.
When submitting sales receipts to your bank, only submit one copy. Don’t send a copy to two different banks. Multiple copies of sales receipts can result in duplicate billing and chargebacks.
For card-not-present transactions, collect the CVV or CV2 card verification numbers (the three to four-digit security code on the back or front of your guest’s card).

Avoiding Chargebacks Takes a Holistic Approach

Mistakes happen, even at the best shops. Building a relationship with guests is key to avoiding chargebacks.

If your guests trust that you care and something does go sideways, they'll talk to you about it, and you will have an opportunity to work it out.

Auto repair shops also benefit from having solid shop management and payment processing system that make it easy to prevent chargebacks long before the sale.

👉 Ready to grow your automotive business? [Book a personalized Tekmetric Demo Here]

FAQ

As a shop owner, you have the ability to tune into your shop’s performance metrics, employees’ bandwidth, and overall profit margins with a few clicks.

Lucas Underwood and David Roman, hosts of the ASOG podcast, recently sat down with Tekmetric CEO Sunil Patel at the Vision Hi-Tech Training and Expo in Kansas City, Kansas.

Sunil shared some key insights into facing challenges, embracing change, streamlining processes, prioritizing customers, and the power of “always starting with why.”

Note: the following answers have been condensed for clarity.

On Facing Challenges and Handling Stress

ASOG: We spoke with PJ Leslie (Tekmetric’s Business Development Director) recently, and he was talking to us about your ability to take anything that comes your way and overcome it.

PJ shared with us that no matter the circumstance, you’re always able to say, “We’re going to get through this, and we’re going to make something from it.”

You created an amazing thing despite the adversity that you’ve faced. How were you able to do that?

Patel: My wife and I went through some hard times with our daughter, Brianna, about a year ago.

And what I told my wife during that time was, “You know what? I’m ready to face this challenge.

We’re going to find the best doctor we can find and the best solution for her. And Brianna will live life one day at a time.

We’re not going to think about the future, we’re going to live life today.”

Since that day it’s been almost ten months and everything has been great. She’s doing beautifully.

A key component to handling stress is delegation.

You’ve got to let go of some of your responsibilities no matter how unnerving it is. Remind yourself that you can continue to keep your momentum on your shop, business, and goals by delegating.

That’s why you have a team—so you can tackle and conquer each task that comes your way.

On Embracing Change and Switching Gears

ASOG: You’ve gone from being a physician to a police officer to an auto repair shop owner, and now you’re the co-founder and CEO of Tekmetric. What made you want to go from physician to shop owner?

Was there a rock bottom for you? Was there a point where you decided, “I don’t want to be a physician any longer?”

Patel: I was fortunate that I never hit rock bottom. I’ve always tried to live in the moment. And I’m always intrigued by learning new things. With that being said, it took me going from industry to industry to learn the skills that helped form Tekmetric.

Let’s say you set a goal for yourself to go to the gym more often.

Now, if you don’t want to go to the gym, then you will keep training your mind to make sure that gym is just not your thing. It’s not until you have a breakthrough that you are able to change your mindset.

You have to train your reticular activating system (RAS), a network of nerve pathways located in the brain stem that mediates overall behavior, so that going to the gym becomes a positive activity.

Along with reminding yourself that you want to go to the gym, write down when you want to make the change and why.

Let’s say this is your goal, 'In March 2023, I will feel great, I will look great, my clothes will fit me better, and I can hear my family and friends saying ‘You’ve done a fantastic job.'

You have to recognize and reframe each limiting belief that is preventing you from achieving your end goal. An example of a limiting belief would be something along the lines of, "Ah, I’ve had a long day, I can just go to the gym tomorrow.' You have to reframe it to, 'I’ve had a long day, time to finish strong with a trip to the gym.'

You have to be very intentional. You truly have to want to reach the finish line.

This concept goes for shop owners, too. If you’re wanting to expand your shop, you’ll need to change the way you’re running your business. You can do that with shop management software.