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Stripe Chargeback Protection

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Re: Stripe Chargeback Protection

#131

Post by the_shalashaska »

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…

But, this is the product I want, because I sell high end used luxury watches, and chargebacks are the biggest PITA and one of the hindrances to profitable growth in that sector.

Losing out on a large chunk of a $15k transaction because the buyer thinks the condition of the watch is "not as described" (where in reality, they know this is an easy way to scrape a huge discount on their purchase because the criteria is so subjective and petty) makes life very difficult. Sure, 95% of my customers are great, but that 5% really deals material damage when you are talking about high cost physical goods.

This product offering is interesting, and is worth investigating and weighing its cost against my average annual losses from chargebacks. In your case, you are offering SaaS so your marginal cost must be negligible. Different strokes for different folks I guess.

Re: Stripe Chargeback Protection

#132

Post by xpose2000 »

jliptzin wrote: post #118

Has anyone done the math on this? You’re paying an extra 0.4% fees per txn which is a lot. So your dispute loss rate would have to be > 0.4% for this to make sense. That seems pretty high. That probably means your overall dispute rate is above 0.6%. In my experience you can get your dispute rate well below 0.1% (effectively a non-issue) by making sure your support channels are working and not clogged, and you have a…

So, .4% fee for $10,000 in sales amounts to $40. And losing one chargeback dispute costs you $15, plus time and effort to fill it in and submit it. Not to sound cynical, but odds are you will probably lose it anyways because the customer didn't feel like paying anymore.

Am I missing something? The chargeback protection fee doesn't sound terrible

Re: Stripe Chargeback Protection

#133

Post by dexterdog »

jasonkester wrote: post #29
scarface74 wrote: post #22

Earlier quoted context omitted.

Would you feel that way if you were selling physical goods or even services where you had to pay workers - like a lawn business? It sounds like you are selling a near zero marginal cost software business.

I do have server expenses that map directly to processing work done for individual customers, so there is a quantifiable amount of real money lost at times. But at the end of the day, I still don't want somebody's fourteen dollars enough to fight them for it (even if it means I also lose another $5 in real expense and a few more in chargeback fees). But you're absolutely right. If it were physical goods or services,…

Once a chargeback is filed you are losing the fee if you either accept it or don't fight it. My cancellation process is simple, certainly simpler than contacting your bank and identifying yourself and going through the chargeback process. That doesn't stop people from going to their bank for the last 3 months of subscription and calling them fraudulent because they never told us to cancel them. I fight every single chargeback because their always lies by the customer in my case and they involve real money already spent by my company. We win some and lose some.

Re: Stripe Chargeback Protection

#134

Post by fengloincloth »

the_shalashaska wrote: post #131
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…

But, this is the product I want, because I sell high end used luxury watches, and chargebacks are the biggest PITA and one of the hindrances to profitable growth in that sector. Losing out on a large chunk of a $15k transaction because the buyer thinks the condition of the watch is "not as described" (where in reality, they know this is an easy way to scrape a huge discount on their purchase because the criteria is s…

Keep in mind that the protection seems to only covers certain types of disputes: https://support.stripe.com/questions/payments-that-qualify-f...

For instance "product not received" , "product unacceptable", or "subscription canceled" would not be covered.

Re: Stripe Chargeback Protection

#135

Post by jliptzin »

xpose2000 wrote: post #132
jliptzin wrote: post #118

Has anyone done the math on this? You’re paying an extra 0.4% fees per txn which is a lot. So your dispute loss rate would have to be > 0.4% for this to make sense. That seems pretty high. That probably means your overall dispute rate is above 0.6%. In my experience you can get your dispute rate well below 0.1% (effectively a non-issue) by making sure your support channels are working and not clogged, and you have a…

So, .4% fee for $10,000 in sales amounts to $40. And losing one chargeback dispute costs you $15, plus time and effort to fill it in and submit it. Not to sound cynical, but odds are you will probably lose it anyways because the customer didn't feel like paying anymore. Am I missing something? The chargeback protection fee doesn't sound terrible

Yes I do lose most disputes regardless of what the situation is, and I did forget about the $15 fee. I guess it really depends on the type of business, will probably make sense for some, but as a consumer I do see a lot of small businesses out there that should be looking first at how to get their chargeback rate low enough that they don’t need something like this in the first place.

Re: Stripe Chargeback Protection

#136

Post by xpose2000 »

eeke wrote: post #8

I’m the PM on Chargeback Protection. Startups told us they don’t want to deal with the hassle and unpredictability of chargebacks; that’s why we built this. Happy to answer any questions you have.

Any ETA on when chargeback protection will be available for Stripe.js?

Re: Stripe Chargeback Protection

#137

Post by dexterdog »

wayoutthere wrote: post #43
jasonkester wrote: post #35

Earlier quoted context omitted.

Isn't that harder than replying to your last invoice mail with the words "Please refund this and cancel my subscription"? Why involve the telephone?

You’re assuming there is an invoice; many times there is not which is why the chargeback is auto-approved. For better or worse, the chargeback is the only weapon end-users have anymore.

That's utter nonsense. Most reasonable companies will offer you a refund if you simply ask, especially if you haven't used the service or incurred any costs for the company because of your failure to cancel. When you sign up for a monthly service it is not the company's responsibility to make sure you want to continue each month. Some still do, but it is not required.

Re: Stripe Chargeback Protection

#138

Post by slips »

jliptzin wrote: post #120
Gluten wrote: post #106

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.

Stripe are not idiots, if they’re losing a significant amount of money on this offering to a specific merchant, they’re going to close your account.

Is that stated anywhere by Stripe or is it theoretical?

Re: Stripe Chargeback Protection

#139

Post by gist »

eeke wrote: post #24
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…

We can send you a webhook on every dispute being created ( https://stripe.com/docs/webhooks ) and you could use the API to either refund the underlying charge or accept the dispute (and refund the underlying charge). We can also give you access to receiving early fraud warnings from issuers (like Visa TC40s). These are notifications from the issuers that the customer is likely going to dispute a charge. If you're hap…

Is it possible to have the extra fee (.4%) only on some transactions or does it have to be applied to the entire account? For example in what we do we have very large transactions where we know the customer very well and we don't need this. But other transactions are typically small but more importantly they are of a different type where the risk of fraud is much higher and the protection is warranted. Just wondering other than getting setup for two different accounts (which may not even be possible) how this situation would be handled. I do understand the idea of wanting the .4% not applied selectively however it would be good if there was a way to specify the transaction class in some way to account for this situation.

Re: Stripe Chargeback Protection

#140

Post by Meekro »

ijidak wrote: post #108

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…

Have you looked into 3D secure? Stripe already offers it[1], no fees, and it mitigates liability quite a bit. Lots of business owners here probably can't use it because they do recurring billing, but it sounds like it'd be perfect for you.

"Should a 3D Secure payment be disputed as fraudulent by the cardholder, the liability shifts from you to the card issuer. These types of disputes are handled internally, do not appear in the Dashboard, and do not result in funds being withdrawn from your Stripe account."

[1] https://stripe.com/docs/payments/3d-secure

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