Stripe Chargeback Protection • Hacker News Board

Re: Stripe Chargeback Protection

#101

Post by globile » Mon, Jun 03, 2019, 2:24 PM UTC

NotPaidToPost wrote: post #89

csa wrote: post #64

Earlier quoted context omitted.

> However I'd gladly pay a few thousands per year for it 0.4% on $2.5m is $10k a year. I realize "ten" is a bit more than "a few", but is Stripe's price point materially that far off from where you want it to be? Said another way, I imagine that there are at least a few problems smaller than chargeback protection at your company that you throw $10k or more at just to make that problem go away... right? If so, this ma…

What he's saying is that currently doing nothing costs him less than what paying 0.4% to 'insure' transactions would, so why bother with insurance? Ultimately established companies know how much chargebacks cost them and thus whether this product is worth it (= costs less).

Another thing to take into account is that if you're not using Stripe Checkout now, you will have to migrate to it, and since Dynamic 3DS will be used to filter and "secure" potential fraud, you will probably see a decrease in conversion rate.

Re: Stripe Chargeback Protection

#102

Post by so_tired » Mon, Jun 03, 2019, 2:27 PM UTC

eeke wrote: post #17

tomglynch wrote: post #3

What will Stripe do to prevent this being abused?

(I work at Stripe on Radar.) We see Chargeback Protection mostly as a way to prevent our users from burning too much founder attention doing chargeback management. Managing abusive use of the credit card rails, both by fraudulent businesses and by people attempting to defraud legitimate businesses, is something that we have substantial experience with. We have had years to tune our machine learning models; this both…

> prevent our users from burning too much founder attention doing chargeback management

Yikes. Yes. Thank you. I wish i had this 2 months ago.

Re: Stripe Chargeback Protection

#103

Post by URSpider94 » Mon, Jun 03, 2019, 2:27 PM UTC

ascar wrote: post #85

eeke wrote: post #44

Earlier quoted context omitted.

Card issuers are often able to detect that a transaction is fraudulent before it is disputed, and when this happens, they will send us a notification. These notifications are commonly called TC40s (Visa) or SAFE reports (MasterCard). On average ~60% of early fraud warnings end up being disputed, and most disputes have an early fraud warning (though there’s a wide range depending on your business). If you refund these…

You are proposing he should also proactively refund the other ~40% of valid purchases to avoid the ~60% that end up in disputes? Did I get that right? If yes, that doesn't sound like a viable idea.

If it’s a SaaS business, that may very well be a viable approach. The cost of dealing with a dispute on the 60% of claims could be significantly more than the profit on the 40% that won’t be disputed. Additionally, the customers only get back the money for the disputed transactions, not perpetual future access to the software (as they would if it were a physical good, or a shrink-wrapped disc).

Re: Stripe Chargeback Protection

#104

Post by eeke » Mon, Jun 03, 2019, 2:29 PM UTC

andrewbarba wrote: post #75

This appears to require the new Checkout product in order to enable it. What happens if we have a percentage of sales coming from a native iOS or Android app? Are we not allowed to enable protection? Or would just the web transactions be covered?

(PM for Chargeback Protection.) Yep, Chargeback Protection only works with the new Checkout so we’ll only protect any transactions that are processed through the new Checkout. You can keep your existing integration for iOS and Android, but those charges will not be protected.

Re: Stripe Chargeback Protection

#105

Post by eeke » Mon, Jun 03, 2019, 2:34 PM UTC

zenexer wrote: post #50

eeke wrote: post #44

Earlier quoted context omitted.

Card issuers are often able to detect that a transaction is fraudulent before it is disputed, and when this happens, they will send us a notification. These notifications are commonly called TC40s (Visa) or SAFE reports (MasterCard). On average ~60% of early fraud warnings end up being disputed, and most disputes have an early fraud warning (though there’s a wide range depending on your business). If you refund these…

That’s pretty cool. Is this something Stripe customers have to pay an additional fee to access, or is it included? Another question: what’s the percentage of false negatives?

It’s included! And, in fact, we just launched the API publicly.

https://stripe.com/docs/disputes#early-fraud-warnings https://stripe.com/docs/api/radar/early_fraud_warnings

As for the percentage of false negatives, it really depends on your business. We definitely recommend looking at your own early fraud warning and disputes history to determine what makes the most sense for you.

Re: Stripe Chargeback Protection

#106

Post by Gluten » Mon, Jun 03, 2019, 2:35 PM UTC

Used to run an online game, where lots of fraud was going on. People would buy ingame coins or whatever, move them elsewhere and then chargeback. Full protection at just 0.4% would have been a dream for me if I still operated that game.

Re: Stripe Chargeback Protection

#107

Post by URSpider94 » Mon, Jun 03, 2019, 2:38 PM UTC

Liron wrote: post #92

tacosx wrote: post #37

The chargeback is one of the few tools consumers still have with real power. Sure fraud is still a problem, but it's a really uncomfortable proposition to start making chargebacks an abstracted cost sink for the corporations. Of course the fact that this is an upsell line item means only big businesses will pay for it, the smallest businesses owned by the people just starting out will be the only ones who actually su…

But this product isn't taking away consumer protection via chargebacks, nor hurting small businesses in any way.

I think the Parent is upset that businesses will no longer be inconvenienced and pained by a chargeback.

Re: Stripe Chargeback Protection

#108

Post by ijidak » Mon, Jun 03, 2019, 2:38 PM UTC

This is huge! Our business sales registrations to educational events for a specific industry. We use Stripe to process.

We have a strict non-refundable policy on ticket deposits because, otherwise, we can't determine how many seats are left for each event and we lose the revenue on that empty seat.

We often get unscrupulous customers who claim they don't recognize the charge because they decided not to attend in the 11th hour!

We also have the rare individual who completes the entire 3-day training and then claims they never got the service!

Because it's in-person training, it's hard to prove they received the service. For example, there are no postal records we might show as proof that we shipped a physical item and it was received.

Now, we have them sign a document affirming they got the training prior to receiving their certificates.

But, still, Chargebacks are stressful, because they create revenue and profit uncertainty for each event.

The dollar value of our fraud rate is about .3-.7% per event. But we always fear the outlier event, where that number spikes. For example, we set aside 2% of revenue from our most recent event (which is thousands of dollars now tied up) to prepare for any unanticipated spike in chargebacks.

And... the stress and frustration of fraudulent chargebacks is a non-zero intangible cost.

I will gladly pay .4% to get revenue certainty!

At this time we don't use checkout though. So will need to look into what we need to do to change to that.

I believe we're using Stripe Elements. (I'm the business owner and a programmer, but I didn't code our original stripe integration.)

Will be looking at this today!!!

Thank you so much for your work on this feature! This is a real game changer for businesses like mine!

Re: Stripe Chargeback Protection

#109

Post by wbl » Mon, Jun 03, 2019, 2:39 PM UTC

Spooky23 wrote: post #51

jasonkester wrote: post #10

But this isn't the product I want. I don't want to ever fight chargebacks. Because my policy is to never take money from people who don't want to give it to me. I want to automatically refund every chargeback attempt without it affecting my ability to charge credit cards. One of my businesses targets consumers, who have this amazing ability to "forget to cancel" or to have "cancelled 3 months ago, but for some reason…

Keep in mind that making it easy to terminate subscriptions eliminates most of those chargebacks. It’s one of the reasons that I use Apple whenever possible to handle recurring subscriptions. It takes about 10m to file a dispute with American Express. If figuring out how to cancel a subscription takes longer, I’m cutting my losses at 10m and heading to Amex.com. Perhaps industry standards around subscription manageme…

There is no legitimate retention management. If I want to cancel I've made clear what I want to do. Making it take longer then a few minutes is a waste of all our time.

Re: Stripe Chargeback Protection

#110

Post by manuelhuez » Mon, Jun 03, 2019, 2:39 PM UTC

jasonkester wrote: post #10

But this isn't the product I want. I don't want to ever fight chargebacks. Because my policy is to never take money from people who don't want to give it to me. I want to automatically refund every chargeback attempt without it affecting my ability to charge credit cards. One of my businesses targets consumers, who have this amazing ability to "forget to cancel" or to have "cancelled 3 months ago, but for some reason…

I don't think that's something available on Stripe, but there are a few tools available in the payments processing ecosystem that allows you to do just that: "notifications of fraud" and "requests for information".

Basically, the first is a notification triggered during the chargeback initialization process on the bank, but before the chargeback is actually processed. So when you receive the notification, you can still issue refunds, cancelling out the incoming chargeback.

The second is similar, but is at an even earlier step of the chargeback process where the user simply asks its bank some information about a line on their statement they don't recognize.