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Stripe Chargeback Protection

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Re: Stripe Chargeback Protection

#21

Post by nulbyte »

flibble wrote: post #11
shedside wrote: post #4

Don't know if anyone from Stripe is listening here but: it'd be amazing to be able to deploy chargeback protection selectively, as a Radar rule. So that for example we could say: charges from the US are protected (and subject to the extra fee) while charges from the UK are not.

That’s exactly what we’d like. 95% of our transactions come from trusted customers which have ~0% chance of a chargeback. We’d like to apply this check and insurance on only the transactions that we are not sure about. Requiring it to be all or nothing makes the feature useless (not cost effective) for merchants with a low fraud rates.

It may not be cost effective for you, but your proposal doesn't seem cost effective for Stripe, either.

Re: Stripe Chargeback Protection

#22

Post by scarface74 »

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…

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.

Re: Stripe Chargeback Protection

#23

Post by jasonkester »

tonyedgecombe wrote: post #19
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 lots of people aren't comfortable asking for their money back. They are, however, plenty comfortable asking their bank to ask for their money back. I think you are being generous in your interpretation. I don't get many chargebacks but looking at the ones I've had there has been a lot of deceit and fraudulent behaviour.

Do you mean it's your customers who are being deceitful by charging back a service after they've used it (as mine do). Or do you mean that you have customers using stolen credit cards to pay for your service and that the chargebacks are happening when the card owner discovers as much?

I haven't seen any evidence of that second case happening with my users (apart from one incident where card thieves discovered my "update your credit card" workflow and used it to sanitize numbers for a few days before I fixed the loophole). But the first one happens all the time.

It'd be adorable in a way, as I'm sure the people doing it think they're totally getting away with something. If, that is, it didn't jeopardize my ability to continue charging credit cards in the future.

Re: Stripe Chargeback Protection

#24

Post by eeke »

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 happy proactively refunding customers you could do so without incurring the dispute fee (though TC40s and the MasterCard equivalent can still count towards monitoring programs). Let me know if you're interested (eeke@stripe.com).

This gets you most of what you want. The subtleties:

1) The credit card ecosystem wants to discourage chargebacks as a routine mechanism for canceling, and so there will still be a fee assessed by the networks and hence by us.

2) The credit card networks have thresholds for how many chargebacks a customer can be doing while making responsible use of their rails, and if one routinely exceeds that, they will give a very serious warning to change business practices and, if one’s numbers do not improve, they will terminate one’s access to the rails. We have substantial experience with B2B SaaS businesses and it is _extraordinarily_ unlikely that a B2B SaaS business comes close to those thresholds, even after accounting for unfortunate user behavior.

Re: Stripe Chargeback Protection

#25

Post by ysavir »

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…

Stripe can do refunds through their API, so there's nothing stopping you from building this feature into your own business, on your own site, with your own branding and wording, etc.

I would look at Steam's refund flow for inspiration.

Re: Stripe Chargeback Protection

#26

Post by shoo_pl »

flibble wrote: post #11
shedside wrote: post #4

Don't know if anyone from Stripe is listening here but: it'd be amazing to be able to deploy chargeback protection selectively, as a Radar rule. So that for example we could say: charges from the US are protected (and subject to the extra fee) while charges from the UK are not.

That’s exactly what we’d like. 95% of our transactions come from trusted customers which have ~0% chance of a chargeback. We’d like to apply this check and insurance on only the transactions that we are not sure about. Requiring it to be all or nothing makes the feature useless (not cost effective) for merchants with a low fraud rates.

Is it not the point? If stripe allowed you to do that - insure only dangerous transactions - then it could not be 0.4% but rather a few %.

The entire point behind insurance is to have enough volume so that the small % when they need to pay up won't affect the business.

Re: Stripe Chargeback Protection

#27

Post by pancho111203 »

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.

Completely unrelated, but please add an alternative fee structure more appropriate for microtransactions. Stripe has a vast amount of useful features from which my business could benefit, but its cost is prohibitive as all our transactions are for low amounts (1$ or less), which make your 30cent fee a 30% of the total.

We are forced to use credit cards directly and Paypal, as both offer a much lower fixed fee (sometimes 0) in exchange for higher %.

Re: Stripe Chargeback Protection

#28

Post by lagadu »

flibble wrote: post #11
shedside wrote: post #4

Don't know if anyone from Stripe is listening here but: it'd be amazing to be able to deploy chargeback protection selectively, as a Radar rule. So that for example we could say: charges from the US are protected (and subject to the extra fee) while charges from the UK are not.

That’s exactly what we’d like. 95% of our transactions come from trusted customers which have ~0% chance of a chargeback. We’d like to apply this check and insurance on only the transactions that we are not sure about. Requiring it to be all or nothing makes the feature useless (not cost effective) for merchants with a low fraud rates.

That's how insurance works: it relies on the majority of activity being fine and only a minority of it actually needing insurance. If you could select only the transactions with high risk to be insured, they'd have to charge a lot more than 0.4%.

Re: Stripe Chargeback Protection

#29

Post by jasonkester »

scarface74 wrote: post #22
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…

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, I'd fight those chargebacks for sure. (Though it'd be a lot harder for one of my deadbeat customers to plausibly claim that he'd "forgot that I mowed his lawn").

Re: Stripe Chargeback Protection

#30

Post by wayoutthere »

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…

Unless you have an easily visible telephone support number, I’m issuing a chargeback. It simply takes less of my time and idgaf about your business model.
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