Dealing with threats, refunds and chargebacks

One precarious phenomenon of the specialty of cosmetic surgery is the patient who demands a refund. If your unhappy patient’s result is, in your eyes, still within the standard of care, you have a number of options. You can try to resolve the issue on your own, or you can turn the matter over to your malpractice insurance carrier to manage, bearing in mind that it may go on your record. If you stonewall, you’re virtually guaranteed at least a negative review, and potentially a lawsuit. It has become more common for irate patients to threaten clinics about posting a bad review if they do not get their way. Succumbing to any kind of extortion is ill-advised. If you give in to unreasonable demands, and word gets out in your community, it can open up a Pandora’s box.

Any clinic that receives a substantial number of credit card payments faces the threat of chargebacks; when a customer or patient tries to reverse a purchase they made from you to get their money back. Unfortunately, credit card companies have made it so easy that they have left this policy open to widespread abuse. Chargebacks can arise from many issues, including poor customer service, a feeling that the cardholder has been overcharged, and blatant attempts at fraud.

Read your merchant account policies very carefully on this issue and act quickly. For example, American Express clearly states; ‘Merchants have 20 days to respond to an inquiry and 20 days after the date of the chargeback to request a chargeback reversal.’ American Express further encourages merchants to be clear with supporting documents; ‘Submitting supporting documents helps build your defense against a dispute. But without a proper description of what each document is, they may not help your case. Take the extra few minutes to add a description to every supporting document you submit.’¹

One way to protect your clinic is through superior customer service to try to repel refund-related chargebacks. Customers who feel they have been taken care of with respect and expediency are less likely to request refunds in the first place. But even when a refund is requested, a kind and courteous employee may be able to diffuse the situation.

Practitioners are well advised not to agree to monetary refunds of any kind without the benefit of legal representation of one form or another. For example, tread carefully if asked to pay another doctor’s fee to correct a treatment you have performed, agreeing to refund any amount of the original fee paid, or offering additional services to mitigate the patient’s disappointment. These actions can be interpreted as offering the patient consideration and/or an admission of negligence. In some instances, you may be tempted to return the fee if the patient signs a general release holding the practitioner and the clinic harmless, but you should consider this option only through a solicitor.

Conclusions

The greatest prescription for disaster is to neglect unhappy patients and let them slip through the cracks. You can distill a potential lawsuit if the patient is unhappy with the treatment outcome, yet is satisfied that the practitioner and his/her staff showed a genuine interest and cared about the patient. Most cosmetic procedures can be revised and improved, but once the relationship and communication between patient and the office has broken down, it cannot be sutured together again.

One final thought; it is far better to have fewer happy patients, than many unhappy ones.