In France to my knowledge we don’t have a right to chargebacks, the only case when we can be reimbursed is when a fraudulent use of our card is made and we then declare a credit card number theft and the card is blocked. How is the situation in other European countries?
Stripe Chargeback Protection
201–210 of 219 posts
Re: Stripe Chargeback Protection
#202How 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.
Yep, that is true.
In the physical product's case, you are out the $15 + $50 (or whatever your product cost you to make and ship).
Re: Stripe Chargeback Protection
#203But 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'm in a similar boat.
Re: Stripe Chargeback Protection
#204In France to my knowledge we don’t have a right to chargebacks, the only case when we can be reimbursed is when a fraudulent use of our card is made and we then declare a credit card number theft and the card is blocked. How is the situation in other European countries?
I run an ecommerce website in France, and I use Stripe (french account), and I get a couple of chargebacks per year. Usually, it's the customer who gets his CC stolen, blocks it and declares all the transactions in the timeframe as fraudulent.
FWIW, I have had 10 chargebacks and lost the dispute for each of them even with the delivery address matching the CC name and the proof of delivery... But I will pass on this protection, the price is way too high for us.
Re: Stripe Chargeback Protection
#205Earlier quoted context omitted.
But I doubt that I could order $5000 worth of furniture, have it delivered, dispute the charges and then the vendor just shrugs. But, I’ve never disputed charges outside of obviously being double charged. Most of the time, I’ll speak with vendor.
Unfortunately, this is exactly what happens with identity theft. Imagine if someone stole your credit card number, ordered $5000 worth of furniture with it, had it delivered, and then you discovered the unauthorized purchases on your account and disputed the charge. The vendor has no choice but to just eat it. It's unfortunate, but it happens, and the only way to mitigate it is to raise prices to offset this kind of…
That sucks. I didn’t think about it from the merchants side.
Re: Stripe Chargeback Protection
#206Earlier quoted context omitted.
I guess I'm out of touch on what it is like for physical products. I only sell digital products but the dispute rate is over an order of magnitude less than 1 in 250.
I sell a physical product on a Shopify store. Charge-backs cost me $8000 out of >$3,000,000 revenue (14 orders out of 11362). At least one of them (totaling $2000) I should have known was fraudulent because I even asked for photo ID confirmation and received a scan of a print-out which I didn't check well enough. I simply started to require PayPal for international customers instead of Stripe checkout and that reduce…
Thanks for sharing real numbers.
So you would have paid $12,000 to Stripe for charge back insurance, which is double what you really paid (well, it's not double since you really paid 8k, but from the sounds of it that 2k loss could have likely been prevented with a more careful background check which makes it a 6k loss).
Question: would you pay that extra $4,000 to $6,000 to never have to deal with charge backs again?
Re: Stripe Chargeback Protection
#207Earlier quoted context omitted.
Thanks for your comment. We want our products to substantially decrease the barriers to international commerce, and they’re used by both businesses which are just getting started up to multinational companies with extremely sophisticated understanding of their payments needs. Auth rates are a deep topic, and one we’re experimenting on constantly. The topic of whether a particular business will get better auth rates g…
Thank you for your many detailed replies here! This idea that parent brought up is one I've heard before: Stripe declines payments that a local gateway service would have accepted, for reasons unrelated to fraud protection. That's always made me scratch my head because my (admittedly primitive) understanding is that you're eventually hitting some API at the bank which accepts or declines the charge. Why would it matt…
We switched from stripe to local payment gateways in some countries because some banks automatically convert any charge by stripe to USD making it more expensive for the end client and refusing in some cases the charge, when in local gateways everything goes through in the local currency.
Additionaly stripe charges their 2.5% to 3% + 2% conversion fee making it impossible some business models that are low margin.
Re: Stripe Chargeback Protection
#208Earlier quoted context omitted.
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?
I'll answer your question, but I should say up-front that my businesses mostly deal with relatively low-value transactions, so although action is always considered in these cases, usually we decide it's not worth pursuing. On the occasions that it's been deemed worthwhile and we have started the recovery process, we have never reached the stage of formal court proceedings. Generally once someone realises that their actions were not acceptable and we really are willing to go further if necessary, that tends to resolve things quickly. So I suppose the honest answer is yes, we did get our money and sometimes a bit more than the original amount owed due to interest/penalties/etc, but I don't know how effective our intended next steps would really have been other than where we've had positive legal advice.
Re: Stripe Chargeback Protection
#209But 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'll happily refund every penny you ever paid us if you simply ask IANACFO, but I think your balance sheet for this business is going to be pretty wack. To guarantee this, you need to keep a pool for refunds (edit: and with your specific guarantee, isn't it all revenue ever?). If you don't, that can be a real issue with the business. This happened at Groupon: https://www.cfo.com/management-accounting/2012/04/group…
That article explicitly mentions "big ticket deals" at "higher price points" as the problem there. Many SaaS businesses charge each customer pretty small amounts and get very few chargebacks. The time it takes to fight a chargeback, even if illegitimate, isn't worth the amount of the charge itself, to say nothing of the opportunity cost of getting more customers who want to pay.
Re: Stripe Chargeback Protection
#210I 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.
You’re right that wasn’t very clear. If the subscription is started using Stripe Checkout and charged at sign up, the initial payment is protected by Chargeback Protection. Trials that are charged at a later time and future recurring payments are not protected. We want to broaden the scope of use cases for Chargeback Protection over time.