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Stripe Chargeback Protection

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Re: Stripe Chargeback Protection

#191

Post by pas »

jacquesm wrote: post #161
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…

It's telling for the industry as a whole that the card companies failure to do their work properly still can result in extra charges to the merchant. After all card companies have a tremendous amount of data at their disposal and are apparently able to detect a large percentage of fraud before a dispute is raised and yet do not pre-emptively block the charges or reverse the transaction. I've been on the receiving end…

They optimize this for max profit. Of course. So they found that this is the sweet spot, that generates the maximal volume while keeping fraud to minimum (also keeping users as happy as they can - that is not bothering them with preventative measures, and then of course making it easy to do chargebacks).

Re: Stripe Chargeback Protection

#192

Post by ryanlol »

NKCSS wrote: post #87
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…

Longshot, but you don't happen to be th3j35t3r, do you? The name and description on ExpatSoftware seems so fitting :)

It’s not very polite to suggest that someone might be th3j35t3r.

Re: Stripe Chargeback Protection

#193

Post by maratc »

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

Are you assuming that the cost of the disputed transaction - the goods that were sent to the customer and supposedly not coming back - is $0?

For $10,000 of sales of one's music $40 does not sound terrible. For $10,000 of sales of high-end watches $40 to have the reimbursement is a helluva great deal.

Re: Stripe Chargeback Protection

#194

Post by maratc »

necubi wrote: post #168

Chargeback insurance/protection is not new in the industry. And despite how nice it sounds to not have to worry about chargebacks, I think it's a bad deal for almost everybody. The basic problem is that your incentives are not aligned with Stripe's: you make money when a good sale goes through, but that's when Stripe might lose money (if the transaction ends up being fraudulent). So they have an incentive to block an…

That's why anti-fraud-as-a-service companies only charge the commission when they approve the transaction, while the declines are free. If everything is declined, they are not making any money.

[Disclaimer: Used to work at anti-fraud-as-a-service company, acquired by a payment behemoth long since]

Re: Stripe Chargeback Protection

#195

Post by ceejayoz »

slips wrote: post #138
jliptzin wrote: post #120

Earlier quoted context omitted.

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?

> We may terminate this Agreement or close your Stripe Account at any time for any reason (including, without limitation, for any activity that may create harm or loss to the goodwill of a Payment Method) by providing you Notice.

Re: Stripe Chargeback Protection

#196

Post by maratc »

nickjj wrote: post #156

How did you arrive at 0.4%? That seems like a lot to pay for insurance. If they take 2.9% normally, 0.4% is about 14% extra in fees for every transaction you make, but disputes on a legitimate product are probably 1 in 5,000 (and Stripe will charge you a $15 flat fee if you lose the dispute which you will if it was related due to credit card fraud). If you sell 5,000 products at $50 that's $250,000 in revenue. Stripe…

You must be selling digital products where the marginal cost of what you send to your customer (who disputed the transaction and isn't sending the product back) is $0.

Re: Stripe Chargeback Protection

#197

Post by Havoc »

eeke wrote: post #44
jasonkester wrote: post #31

Earlier quoted context omitted.

How does that work? When I'm notified of a dispute, the first thing I do is go in and refund the charge. I still have to watch the whole dispute resolution process play out and have it be ruled against me. How would I go about stopping it before it starts, as you seem to imply is possible? Edit to add: Does it even make a difference if I go in and refund the disputed payments? It sounds like I get dinged either way a…

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…

60%...wow.

Cool - thanks for answer Q

Re: Stripe Chargeback Protection

#199

Post by Drdrdrq »

Silhouette wrote: post #174
Spooky23 wrote: post #51

Earlier quoted context omitted.

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…

The other side of this is that there are some customers who can't manage to cancel a subscription even when they literally just have to log in, click/tap to go to whatever page handles their personal details, and then push a prominent button to cancel and maybe a second confirmation one to prevent misclicks. The entire process can take less than 10s, yet you'll still get people who email you claiming they can't find…

I think this is fair, but do you ever manage to actually recover the funds?

Re: Stripe Chargeback Protection

#200

Post by tyrree612yyuh »

thom801 wrote: post #190

I just have to point out this little page of caveats: https://support.stripe.com/questions/payments-that-qualify-f... Biggest thing for our company: "The payment must be submitted to Stripe by your customer via Stripe Checkout. This means that recurring charges are not eligible for Chargeback Protection" Meaning this does not protect our B2C subscription company from any recurring charges which is a huge percentage o…

> The payment must be submitted to Stripe by your customer via Stripe Checkout. This means that recurring charges are not eligible for Chargeback Protection

What's going on here? I thought Checkout specifically supported setting up subscriptions:

https://stripe.com/docs/payments/checkout/migration#client-s...

If recurring charges are not covered that's fine I guess but I don't get what it has to do with Checkout.

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