SV: Services Not Provided

This code shows up in all kinds of industries from hotels and restaurants to software subscriptions and professional consulting services. Service-related chargebacks work with subjective expectations and on top of that there are timing complications that make them very hard to stop ahead of time.

Service businesses are in a tough situation here because they can’t just take back a physical item when disputes happen. Records and plain communication remain the main ways to protect against lost revenue and penalty fees.

How It Works

Most customers don’t jump to complaints instantly when they don’t get what they paid for. They’ll usually give you some benefit of the doubt and wait a little while past the expected delivery date or after their appointment time. Once it becomes obvious that the service isn’t going to happen, they contact their bank to dispute the charge.

After receiving the complaint the bank looks at it and figures out if it’s worth going after. If they think the complaint has merit they’ll go ahead and file a chargeback with Discover and the whole process can take anywhere from a few days to a few weeks to get started. Discover will then check if the dispute falls under the “services not provided” category and will send a notification to the merchant about the chargeback.

Either through your payment processor or directly from Discover, you’ll receive the notification. It will talk about why the charge is challenged and will give you a deadline to reply – usually around ten days to get together all your evidence and send it in. It’s your chance to prove that you actually delivered the service or talk about what went wrong.

Common situations include confirmed bookings where the service never happens. A customer might book a hotel room but then can’t check in when they arrive. Or they sign up for a subscription service but never get access to the platform that they paid for. Sometimes it’s just a missed appointment that never got rescheduled.

If a service isn’t going to happen as planned then your best bet is to contact the customer first and let them know.

How it Affects Chargeback Prevention

Service chargebacks can hurt your bottom line in ways that most merchants don’t expect. Every time a customer disputes a service and claims that they never got what they paid for, you lose that revenue instantly. On top of that lost sale, you’re also stuck with the processing fees that add up fast. These disputes happening over and over can land your merchant account in deep trouble.

Prevention shows very promising numbers for anyone who is willing to put in a little effort from the start. Business owners who actually take the time to write up plain service agreements watch their dispute rates drop by almost 50% and plenty of them see even better results than that. Being transparent about what customers can expect from your service gives them way less reasons to get confused or upset later on. You don’t need to hire some expensive lawyer or get all tangled up with tough legal language either. Just spell out what you’ll do, the timeline and how you’ll work with changes along the way.

Communication matters most when services get delayed or run into problems. Whenever one of your projects falls behind schedule for whatever reason, reach out and talk about the situation before the customer starts getting worried. That easy step makes them far less likely to panic and file a chargeback. Most customers just want updates on their order and to know that everything will get back on track.

Your records are your strongest asset when a dispute happens in spite of your best work. Save your emails, service agreements and delivery confirmations. Showing solid proof that you delivered just what you promised usually gets banks to side with you during the dispute process. Service businesses have a particular challenge here because there’s no physical product to point to as evidence. You can’t just accept a return and call everything even so your entire defense strategy needs to be built before any problems actually start.

Example Scenarios

Hotels usually take payment for rooms a few months in advance. That system works great until it doesn’t. Peak season rolls around and management realizes that they’ve sold more rooms than they have. A guest shows up with a confirmed reservation and full payment already processed, only to learn that there’s no room available. They might arrange to put them up at a different property across town, or promise to sort everything out by tomorrow morning. Bad news for the hotel – the guest already paid hard-earned money for a particular room on a particular night and when the service isn’t delivered as promised, you’re looking at a classicSV chargeback situation.

Online course sites run into the same problems when their technology decides to fail at the worst possible time. A customer drops $500 expecting immediate access to the video lessons and downloads that they were promised. Then the platform crashes completely or goes down for scheduled maintenance that drags on for weeks. Students can’t log in to get any of the content that they already paid for. Apologetic emails usually go out with promises to extend everyone’s access period to make up for the downtime. Still that doesn’t fix the actual problem – the service went dark when the customer needed it most.

Home service contractors create SV disputes when they get a little too excited about collecting deposits up front. A homeowner hands over $2,000 as the first payment for bathroom renovation work that’s supposed to start next week. Rescheduling happens once, then again and then a third time over two months and each excuse sounds a little less believable than the last one. Eventually the homeowner figures out that the work probably isn’t going to happen at all and files a chargeback to get the money back.

These merchants could have avoided these messy disputes pretty easily by waiting to run the card until they were actually ready to give you what they promised. Hotels would be quite a bit better off confirming room availability before charging the guests. Course providers need backup systems that keep their content online even when servers break. Contractors should only bill after they finish the job, or at least after they hit the milestones along the way.

Requirements and Timeframes

Getting hit with an SV chargeback means the response window is tight – and you have just ten days to act. Discover sends the notification and the clock starts counting instantly, so you’ll need to pull together your evidence and send your response right away. Missing the deadline means you lose the dispute, end of story.

Discover wants solid proof that you delivered the service as promised. A signed service agreement is usually your strongest piece of evidence. Email threads can help too, especially those messages where the customer thanks you or asks follow-up questions. Time-stamped photos of the finished work can also go a long way if you have them on file.

Records matter quite a bit for merchants who face these disputes. Hang on to the service paperwork for at least thirteen months. Cardholders have up to 120 days after they expected to get the service to open a case, so your paperwork needs to stay organized and accessible the whole time.

SV codes work differently from other dispute types. RG codes cover physical products that never showed up, whereas SV applies only to services. An AA code means that the customer doesn’t remember the transaction at all. SV means they accept that they made the charge but claim you never delivered what you promised.