How to Protect Your Auto Repair Shop from Chargebacks

|

|

Read time: 3 min

Chargebacks are something that no shop owner wants to deal with.

Your business relies on big-ticket sales, and chargebacks on those sales can squeeze your margins.

When a guest goes through their bank or credit card company to get a refund, whether it’s because they were unhappy with the repair or not, it can leave shop owners in a bind where they might have to eat the cost of the labor, parts, and profit.

There are some cases where business owners can make a case against the chargeback, but it can be a lengthy process and most banks and credit card companies will side with the cardholder who’s making the complaint.

Protecting your business from chargebacks doesn’t start when the payment is processed, nor does it end with being reimbursed for a single chargeback. The best way to protect your business from chargebacks is to establish clear, open communication with your guests and adhere to a consistent and secure payment process.

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

More articles

When thinking about how to run an auto repair shop, we might start by thinking about a well-managed football team. The different players know what they’re responsible for, show up to accomplish their jobs, put their best effort into everything they do, and perform their best as a team. Players have each others’ backs both on the field and off the field. They can think on the fly, and move as a unit toward the end zone.

How do your players work together? When mechanic shops assemble the right team, devise the right strategy, and run the right plays, they can win, too. Service advisors can stay informed about what’s going on with every repair order at any given moment in time, switch easily between tasks even when the shop is busy, and provide excellent customer service. Technicians are able to focus on their work and spend more time turning wrenches. And customers? They’ll get their cars back fast and drive away with a good impression of your shop.

Shop owners who think more deeply about how to manage a mechanic shop are rewarded for their efforts. Well-managed shops see exponential returns. Stellar team performance leads to customer satisfaction and repeat business. The more successful your shop, the more you can invest back into your team, continuing the cycle of success for all involved.

How to Run a Successful Auto Repair Shop (5 Step Guide)

May 22, 2023

Read time: 3 min

read more

If you've been running your shop on paper repair orders, a whiteboard, or a mix of disconnected tools, you've probably wondered about shop management software. You’ve also likely questioned what it does and whether it's worth the cost and the disruption of switching to a digital system. 

This blog post answers both questions directly with a clear explanation of what auto repair shop management software is, how it works in a real shop, and the signs it might be time to look at one.

What Is Auto Repair Shop Management Software?

Auto repair shop management software is a platform that connects the core workflows of your shop — from writing estimates to completing repairs to collecting payment — in one place. Instead of tracking jobs on paper, managing parts in spreadsheets, and texting customers from your personal phone, everything lives in a single system your whole team can access.

At its core, it's a connected digital workflow for every repair, from the moment a car pulls in to the moment it pulls out.

📋 Quick Definition
Shop Management Software (SMS):
Also called a shop management system, is a digital platform that handles the operational and customer-facing workflows of an auto repair shop: repair orders, estimates, digital vehicle inspections, parts ordering, customer communication, invoicing, and reporting. Cloud-based platforms like Tekmetric can be accessed from any device without on-site servers.

A Step-by-Step Guide of What It Does

The easiest way to understand shop management software is to follow a repair from start to finish and see what the platform touches at each step.

1. Customer Arrives: Write-up and Scheduling

When a vehicle comes in, the service adviser opens a new repair order (RO) directly in the software. Customer info, vehicle history, and previous service notes are already there. There’s no need to search through masses of paper, and no digging through filing cabinets.

2. Technician Inspection: Digital vehicle inspection (DVI)

The tech completes a DVI on a tablet or mobile device, adding photos and videos of anything that needs attention. The results are automatically attached to the repair order and can be sent directly to the customer by text before the service adviser even picks up the phone.

This is one of the biggest workflow shifts shop owners find most beneficial. Customers can review inspection results, see pictures of the issue, and approve or decline work from their phone with no callbacks.

💬 From a Tekmetric customer
"The text feature is a huge hit — customers can review inspection results, check estimates, and approve repairs with just a click. The system is really streamlined and everything is integrated, making our workflow way smoother than before."
- Verified Tekmetric Customer, G2 

3. Estimate Building and Approval

Once the DVI is complete, the service adviser builds an estimate inside the same system. Parts prices, labor rates, and canned jobs are already set up so advisers aren't manually pricing every line. The estimate flows directly into the repair order once the customer approves.

4. Parts Ordering

Parts ordering happens inside the platform, too. Service advisers can submit orders to their suppliers directly from the repair order, track delivery status, and receive parts against open jobs without leaving the system.

5. Work is Performed and Technicians Stay on Track

The tech board gives service advisers and managers a real-time view of every job in the shop: what's waiting, what's in progress, and what's ready. Techs can update job status from their own device, which keeps the whole team on the same page without walking back and forth to the front desk.

6. Invoice and Payment

When the job is complete, the repair order becomes an invoice. Payment can be collected at the counter, sent by text, or processed through a payment link — depending on how the shop is set up.

7. Customer History

Every completed repair, every declined service, every inspection — it's all stored in the customer's profile. Next time they come in, the service adviser already knows what was done, what was deferred, and what's coming up. That's how you build trust and bring customers back.

What Does It Replace?

Most shops that switch to a management platform are replacing one or more of the following:

  • Paper repair orders and handwritten estimates
  • Printed or whiteboard job boards
  • Phone calls and personal texts for customer communication
  • Spreadsheets for parts inventory and pricing
  • Separate software tools for inspections, scheduling, and invoicing that don't talk to each other
💬 From a Tekmetric customer
"We were originally running our shop with two systems; one was for digital inspection and the other was our shop management system. ... I was spending $1,000 a month between the software companies and the IT support. And if the internet connection blipped for a split second, my digital inspection went down for about an hour. Now I'm paying a fraction of what I was before. … We saved a bunch of money, and the estimate writing process is much faster because the labor guide is built into the system."
- Stephane Grabina, Excluservice, Tekmetric Customer  

Signs Your Shop Needs a Digital Shop Management System 

You don't need to be a high-volume shop to benefit from management software. Here are the signals that tell you it's worth a closer look:

  • You're writing the same information down in multiple places such as a paper RO, whiteboard, or a text to the customer
  • Technicians are walking to the front desk to ask questions that should already be in the job
  • You can't tell at a glance how many cars are in progress or where each one stands
  • Customers call asking for updates that your team has to scramble to find
  • You're leaving declined work in your head instead of a system and losing follow-up opportunities
  • Your end-of-day reporting comes from memory or a calculator

None of these are signs of a poorly run shop. They're signs of a shop that has outgrown what paper and disconnected tools can do.

Do You Actually Need It?

If your shop is processing more than a handful of cars a day, the answer is yes. 

The goal of shop management software isn't to add another system to manage. It's to replace the friction in your current process — the paper, the callbacks, the manual pricing, the jobs that fall through the cracks — with one workflow your whole team can use.

"It integrates every aspect of running our shop — from scheduling appointments and messaging customers to integrating payments and sending invoices." - Gigi Collier, G2 Review, Tekmetric Customer 

📌 Bottom Line
Auto repair shop management software connects your repair orders, inspections, parts, customer communication, and reporting in one place. It replaces the paper and disconnected tools most shops are running on today and gives you the visibility to run your business with more confidence and less noise.

What to Look For in a Shop Management Platform

Not all platforms are built the same. The best ones don't just digitize each task — they connect them, so information moves from one step to the next without anyone rekeying it.

Repair order and estimate workflow
The platform should make it fast to write up a job, build an estimate, and convert it to a repair order without re-entering anything. Look for built-in labor guides and canned jobs so your team isn't pricing from scratch every time. On Tekmetric, estimates flow straight into the repair order, and labor and parts matrices keep pricing accurate and margins protected.

Digital vehicle inspections (DVI)
DVIs are one of the highest-impact features in any shop management platform. When technicians attach photos and videos and customers approve work from their phones, authorization rates climb and comebacks drop. The lift is measurable: shops on Tekmetric average $612 per repair order, rising to $741 once digital vehicle inspections are in use. Customers approve more work when they can see exactly what their vehicle needs.

Parts ordering and inventory
Look for parts ordering built into the repair order, so your team submits orders without leaving the job or logging into a separate portal. Tekmetric connects to more than 70 integrations, including the parts suppliers most shops already use, and inventory tracking helps prevent shortages while protecting your parts margin.

Customer communication
Two-way texting, digital estimates, and automated follow-ups should be built in, not bolted on through a third-party tool. Every extra place your team has to go to reach a customer is another place things fall through the cracks. Tekmetric keeps it in one platform: text a customer, send an estimate, and follow up on a declined service from the same screen.

Reporting and visibility
A strong platform gives you a live view of what's happening in your shop right now — car count, technician productivity, average repair order — without pulling a report or doing the math. Tekmetric's real-time reporting puts those numbers in front of you as the day unfolds, so you can coach your team and clear bottlenecks while it still matters, instead of finding out next week.

Cloud-based access
Cloud-based platforms don't need an on-site server to maintain or replace, they back up your data automatically, and they let you log in from anywhere — the shop, home, or the road. Shop owners on Tekmetric point to exactly this: no server to buy and swap out every few years, and the freedom to work from any terminal at any location. It matters more than most owners realize until the day they need it.

See How Tekmetric Works

Tekmetric is the shop management platform built for independent auto repair shops. Repair orders, digital inspections, parts ordering, payments, and real-time reporting all run in one system, on any device. There are no servers and no syncing between tools that don't talk to each other and one login for the whole team.

It was built by someone who lived through the problem. Founder and CEO Sunil Patel ran his own shop and built Tekmetric to clear the friction he hit every day. More than 15,000 shops now run on it, connected to more than 70 integrations for the parts suppliers, labor guides, and accounting tools they already use.

What Changes When the Workflow Connects

When inspections go digital, customers see exactly what their vehicle needs — photos, videos, and clear findings in a single message. When they understand the work, they approve more of it. The results track it: Tekmetric shops average $612 per repair order. With digital vehicle inspections in use, that average rises to $741. Add MotoVisuals educational videos, and it reaches around $800. It’s the same honest work, but more of it is approved because customers understand what they're paying for.

That's the pattern across the platform. Faster turnaround from check-in to checkout. More cars through the bays. A customer experience that earns repeat visits. The friction falls away, and shops run on results instead of guesswork.

💬 From a Tekmetric customer
"The amount of information that is available to the front desk, the service adviser, and the technician at a glance is very impressive, and the functionality of it together is great."
— Moises M., Guest Service Representative, G2 Reviews, Tekmetric Customer

The reality is that now is a better time than ever to set your auto repair shop up for success, and even start laying the foundation for multi-shop growth. Especially for shop owners willing to take the time to embrace a new toolset: a modern shop management system.

In our latest Auto Repair Industry Index we took a look at recent industry trends across the country, compiled data from industry resources, and compared it to our Tekmetric data. What we found was really promising!

With a cloud-based SMS, shops can leverage amazing features like Default Inspections and Smart Jobs to not only simplify their workflows and smooth out their operations to run like a well-oiled machine but also set their business up for future growth and success.