Chargebacks at hotels and holiday rentals: why they happen and how to defend them with evidence

Updated: 10 November 2026

A chargeback is the reversal of a card payment that the cardholder requests from their bank, and the money comes out of the property's account. At hotels it usually follows a no-show charge, a disputed cancellation or a payment the cardholder says they do not recognise. We read the EU Payment Services Directive, Banco de España, Banca d'Italia Visa's public rules and Mastercard's rules (links at the end). We only state what they say; where we could not confirm something, we say so. This is not legal advice: your contract with your card acquirer and your adviser prevail.

Summary

Unauthorised payment: the cardholder has up to 13 months from the debit date to notify their bank (Article 71 of Directive (EU) 2015/2366, PSD2), which must refund by the end of the following business day at the latest (Article 73), unless it suspects fraud.
Payment initiated by the property where the exact amount was not set when authorised: refund within eight weeks if the amount exceeds what was reasonable (Articles 76 and 77).
Under Visa rules, a dispute over a cancelled guaranteed reservation is processed within 120 calendar days (Dispute Condition 13.7); under Mastercard rules, a no-show dispute also has 120 calendar days (reason code 4853).
The best defence is documentary: an accepted cancellation policy, strong customer authentication (3DS) and a signed registration card.

Why properties receive chargebacks

No-show or cancellation fees the guest believes they did not owe.
A charge the cardholder does not recognise: card used by someone else, booking made by another person, or simply forgotten.
Charges after check-out (minibar, damage) the guest did not expect.
Charging more than disclosed, or charging twice.

What EU law says (PSD2)

Directive (EU) 2015/2366, applied in Spain, Italy, Portugal and Greece:

Article 71: a maximum of 13 months from the debit date to notify an unauthorised or incorrectly executed transaction.
Article 72: the bank must prove the transaction was authenticated; use of the card alone does not prove the cardholder authorised it.
Article 74(2): if the payee or its provider fails to accept strong customer authentication (SCA, for cards 3-D Secure), they must refund the financial damage to the cardholder's bank. In other words, charging remotely without SCA leaves the risk on your side.
Article 75: if the amount is not known in advance (for example a pre-authorisation), funds may only be blocked if the cardholder agreed to the exact amount, and must be released without undue delay once the amount is known.
Articles 76 and 77: if the authorisation did not specify the exact amount and the charge exceeds what the cardholder could reasonably expect, they may request a refund within eight weeks of the debit; the bank replies within ten business days.

What Visa rules say about guaranteed reservations

Visa Core Rules and Visa Product and Service Rules, public edition of 13 April 2024, rule 5.8.8.2 (ID# 0029266) and Dispute Condition 13.7:

Disclose the reservation conditions at the time of booking; for telephone bookings, send a written confirmation with those conditions within 24 hours.
Allow at least 24 hours after the confirmation to cancel without penalty, and hold the room for at least 24 hours after the agreed arrival time.
Process a no-show only if the cardholder did not cancel according to the disclosed and agreed policy.
The cardholder's bank may dispute if they cancelled according to the policy, if the no-show exceeds one day's accommodation, or if they tried to cancel within 24 hours of the confirmation.
Dispute time limit: 120 calendar days (maximum 540). In response, the acquirer provides evidence that the policy was disclosed and that the cardholder received it and did not cancel according to it.

What Mastercard rules say about guaranteed reservations and no-shows

Mastercard Transaction Processing Rules (edition of 9 June 2026), Appendix F, «Guaranteed Reservations» and «Advance Resort Deposit», and Mastercard Chargeback Guide, Merchant Edition (13 May 2025), «No-Show Hotel Charge», reason code 4853 (Cardholder Dispute):

At booking: tell the cardholder the cancellation time and conditions and give them a reservation confirmation number.
Cancellation deadline: the hotel may set it up to 72 hours before the stay; if the booking is made within that window, the default cancellation time is 18:00 hotel local time. Cancellations made in time must be accepted and given a cancellation number.
Hold the room until check-out time on the day following the reservation. If no room is available: do not charge a no-show, offer alternate accommodation of equal or better rating with free transport, and do not charge more than the guaranteed rate.
No-show charge: a cardholder who cancels outside the policy may be billed at most one night of room and tax («one night of room and tax only»). It is authorised before billing, as a merchant-initiated transaction, and you should note that it was a no-show.
Dispute: the cardholder's bank may dispute if they cancelled, used the accommodation, were given alternate accommodation, if the charge differs from the quoted rate (only the difference) or if they were not told a no-show would be charged. Time limit: 120 calendar days from the settlement date.
Hotel defence: documentation that the no-show is valid; for example, that before the reservation date the cardholder was told they would be charged unless they cancelled before 18:00 (merchant's local time) on the reservation date, or told the rate if the amount is disputed.
Advance deposit («Advance Resort Deposit»): explain the terms, confirm rate and location, send the cancellation and refund policies by letter, email or other message, and clearly disclose any no-refund policy.
Not confirmed: we did not read the «Addendum Dispute» section (later charges) or the fraud section; the Chargeback Guide we read is from May 2025 and a later edition may exist. Check with your acquiring bank.

Evidence worth keeping

Accepted cancellation policy: exact wording, date and how it was accepted (tick box, email confirmation). How to write one: /hotel-cancellation-policy-how-to-write-booking-airbnb-google-2026.
Booking confirmation sent to the guest with total price, conditions and policy.
Strong customer authentication (3DS) for remote charges and guarantees: under Article 74(2) PSD2, without it the loss falls on the merchant side. More in our card guarantee and no-show guide: /hotel-card-guarantee-no-show-fee-pay-at-property-2026.
Signed registration card and, where available, signed slips for extra charges: they show the service was provided (good practice; no official source we read sets their exact weight).
Emails or messages with the guest, especially about cancellation.
For Mastercard: the reservation confirmation number, any cancellation numbers you issued and a note that the charge was a no-show (Transaction Processing Rules, Appendix F).
Do not store full card numbers or the CVV to «defend yourself»: you do not need them and it is prohibited.

What to do when a chargeback arrives

Reply within the deadline your acquiring bank gives you: if you do not answer, you usually lose.
Send only evidence related to the dispute reason, organised and legible.
If the guest is right, refund the amount yourself: it avoids the dispute and its cost.
In Spain, Banco de España says to complain first to the bank's Customer Service and then to it (one month for consumers, two for non-consumers). In Italy there is the Arbitro Bancario Finanziario. Banco de Portugal: we could not read its page; not confirmed.

How iQuota helps

We make your property available to AI assistants through a connector, with direct booking, payment at the property and 0% commission. The assistant shows travellers the cancellation policy and payment terms before booking, which leaves a record of what was disclosed. It does not replace your card terminal or your bank, and nobody can guarantee that an AI will recommend a property.

Want an official booking page AI can read and a connector with your real prices, commission-free? The first 30 hotels join free until 30 June 2027.

See the Founding Hotels programme

Frequently asked questions

How long does a guest have to request a chargeback?

If they say they did not authorise the payment, up to 13 months from the debit (Article 71 of Directive 2015/2366). Under Visa rules, a dispute over a cancelled reservation has 120 calendar days.

Can I charge a no-show on Visa?

Yes, if you disclosed the conditions at booking and the cardholder did not cancel according to the disclosed and agreed policy (Visa rule 5.8.8.2). A no-show of more than one day's accommodation can be disputed.

And on Mastercard?

Under Appendix F of Mastercard's Transaction Processing Rules (Guaranteed Reservations), a cardholder who cancels outside the disclosed policy may be billed at most one night of room and tax. If they booked within the cancellation window, the default deadline is 18:00 hotel local time.

Does 3-D Secure help?

Yes: if the merchant or its provider fails to accept strong customer authentication, they must refund the damage to the cardholder's bank (Article 74(2) PSD2).

Sources

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