How to safeguard your tour business from fraudulent charges

As the travel and experiences industry continues to grow, ensuring the security of your business is more important than ever. Fraudulent charges can lead to more than just financial setbacks — it has the potential to damage your business’s reputation and create operational challenges. 

By implementing proactive fraud prevention strategies and a clear dispute resolution process, you can safeguard your business while ensuring a smooth experience for your customers.

If you’ve observed an uptick in fraudulent transactions, identifying patterns in contact details, booking times, and the sources where customers find your tours can help you mitigate risks before they become larger issues.

Important update for Hawai’i-based clients

If your business is based in Hawai’i, you should have received an email on March 14, 2025, regarding recent fraud trends specific to your region. If you cannot find this email, please reach out to your account manager for assistance.

Understanding fraud in the tour industry

Fraud can take several forms in the tour and activities industry, each requiring a different approach for prevention and resolution.

• True fraud: This occurs when a booking is made using stolen credit card information or automated bots make mass reservations. When the legitimate card owner notices the charge, they may file a dispute, leading to lost revenue for your business.
• Fraudsters posing as resellers: Unauthorized third parties may falsely represent themselves as affiliates or employees of your business, selling tours at an inflated price or under false pretenses. This can happen both in-person near your business or online, such as on social media.
• “Friendly” fraud: In this scenario, a customer disputes a charge with their bank despite having participated in the experience. This can be an honest mistake or a deliberate attempt to get a refund while keeping the service. Either way, it results in lost revenue for your business.

For true fraud and fraudulent resellers, once the cardholder identifies the unauthorized charge, they will likely dispute the payment with their bank. This can lead to financial loss and difficulty reclaiming funds.

Best practices for preventing fraudulent charges

Use fraud detection tools

FareHarbor provides built-in fraud detection tools at no extra cost. These tools leverage machine learning to analyze transactions and block suspicious activity. We continuously update our fraud prevention settings to address evolving threats while ensuring a seamless booking experience for legitimate customers.

Stay informed about fraud trends in your area, particularly cases of unauthorized reselling of your tours. If you notice suspicious activity, please contact FareHarbor for assistance.

Clearly communicate your policies

Preventing fraudulent chargebacks starts with transparency. Ensure your cancellation, refund, and rebooking policies are:

• Prominently displayed on your website and in confirmation emails.
• Acknowledged by customers before completing their booking.
• Supported by online waivers. FareHarbor offers a free waiver solution that integrates with your booking form, which can provide critical evidence in dispute cases.

Consider implementing different cancellation policies based on the type of activity to reduce risk exposure.

Improve customer communication & documentation

Good record-keeping and proactive communication can prevent fraud-related issues.

Send automated confirmation and reminder emails to ensure customers recognize their bookings. Use a digital manifest to track guest check-ins and monitor failed email notifications, as invalid contact details can be a warning sign of fraud.

Monitor transactions for red flags & review bookings

Be vigilant for warning signs in bookings, such as:

• Suspicious email addresses that contain long strings of letters or numbers (e.g., efyknvz[@]outlook.com)
• Mismatched billing, booking, or email names
• Frequently changing contact details (email or phone number)

Verify suspicious bookings before the availability starts

1. Contact your customer before the activity and ask them to verify the last four digits of their credit card number.
2. Require them to show the physical card at check-in or provide a picture copy. The billing name must match the cardholder’s name.
3. Ask where they booked the activity or who booked it for them. If they mention a source that you do not sell through, this is a strong indicator of fraud.
4. At check-in, compare the name on the presented card with the billing and booking names. Any mismatches should be treated as potential fraud.

If a suspicious booking cannot be verified in advance, these details can still be confirmed upon check-in.

Refund payments you suspect are fraudulent before a dispute occurs

If you suspect a fraudulent payment, consider proactively refunding it to avoid a chargeback. If the customer is still interested in participating, require them to rebook using a card they physically possess, with a name that matches an ID of someone present at check-in.

Use secure payment methods

Secure payment methods can help minimize fraud risk. Encouraging customers to use Apple Pay or Google Pay for online bookings provides an added layer of security. 

For in-person payments, prioritizing chip and contactless transactions over manual card entry enhances protection. Using FareHarbor-approved card readers ensures secure transactions and reduces the likelihood of fraudulent activity.

Monitor and respond to disputes proactively

Staying on top of disputes is key to minimizing financial loss. You can:

• Enable email or mobile notifications for disputes in your FareHarbor Dashboard to respond promptly.
• Adjust fraud prevention measures based on dispute trends.
• Ensure that the name appearing on customer bank statements matches your business name. Contact FareHarbor support if any updates are needed.

What to do if you receive a dispute

If a chargeback occurs, take the following steps:

1. Respond quickly: Submit the necessary evidence before the dispute deadline.
2. Provide strong documentation: Include booking confirmations, signed waivers, cancellation policies, and any customer communications. Photos of guest participation can be valuable evidence.
3. Attempt direct resolution: Many disputes stem from misunderstandings. Contacting the customer to clarify the charge may resolve the issue before it escalates.
4. Analyze dispute trends: If disputes become a recurring issue, reassess fraud prevention measures to address vulnerabilities.

Fraud may be an increasing concern, but tour operators can take proactive steps to protect their businesses. By combining technology, clear policies, and staff training, you can reduce the risk of chargebacks and prevent lost revenue. Stay vigilant, trust your instincts, and leverage fraud prevention tools to safeguard your bookings.