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VC-Backed Hospitality Giant Soda Stays Crushes 50/50 Chargeback Attempts

Disclaimer: The following is a legal news article written for educational and informational purposes only. It is not intended to provide legal advice or to create an attorney-client relationship with our firm OHIO LAW FIRM. Please consult with a licensed attorney in your jurisdiction for advice specific to your situation.

Soda Stays Successfully Sues 50 Chargeback Attempts and Receives Treble Damages

Forbes Magazine 2023 (Soda Stays)

In the world of short-term rentals, chargebacks can be a major headache for hosts. When a guest disputes a charge on their credit card, the host can be left with lost income, chargeback fees, and the burden of proving that the charge was valid. However, one short-term rental host, Soda Stays, recently made headlines by fighting back against chargebacks and winning big in court.

Soda Stays is a short-term rental company that operates properties in several major cities. Over the past year, the company has been hit with a wave of chargeback attempts from guests who claimed that they did not receive the services they paid for. Rather than simply accepting the chargebacks and moving on, Soda Stays decided to fight back by taking the guests to civil court.

In each of the 50 cases that Soda Stays brought to court, the company was able to provide evidence that the guests had received the services they paid for. This evidence included check-in and check-out logs, photos of the properties before and after the guests’ stays, and correspondence between the guests and the company. As a result, the court ruled in favor of Soda Stays and awarded treble damages to the company.

Treble damages, also known as triple damages, are a type of damages that are awarded in certain cases to punish the defendant for their wrongful conduct. In this case, the court found that the guests had engaged in fraudulent chargebacks, and therefore awarded treble damages to Soda Stays. This means that the company received three times the amount of the original charge, plus any court costs and legal fees.

But Soda Stays didn’t stop there. In addition to receiving treble damages, the company placed a notice on all 50 guests’ credit reports, warning future lenders and creditors of the guests’ fraudulent behavior. For guests who couldn’t pay the treble damages, Soda Stays also garnished their wages in order to collect the amount owed.

This approach may seem harsh, but it sends a strong message to guests that fraudulent chargebacks will not be tolerated. By taking a stand against chargebacks and pursuing legal action when necessary, Soda Stays has shown that hosts can fight back against fraudulent behavior and protect their businesses.

Of course, not every short-term rental host has the resources or legal expertise to fight chargebacks in court. However, this case serves as a reminder that hosts can take steps to protect themselves from chargeback fraud. By keeping meticulous records, responding promptly to guest complaints, and working with payment processors to dispute invalid chargebacks, hosts can reduce the risk of losing income to chargebacks.

In conclusion, the case of Soda Stays serves as a cautionary tale for guests who might consider filing fraudulent chargebacks. By pursuing legal action and receiving treble damages, Soda Stays has sent a message to guests that fraudulent chargebacks will not be tolerated, and that hosts have the right to protect their businesses. For hosts, this case serves as a reminder that chargebacks are a risk of doing business, but that with the right preparation and strategy, hosts can minimize their losses and protect their bottom line.

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