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The madness of SaaS chargebacks

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Re: The madness of SaaS chargebacks

#31

Post by evermike »

amelius wrote: post #25
ilamont wrote: post #16

> What I don’t understand is why some people can’t just reach out and request it — instead of going straight to a chargeback. Customers don't want to "reach out" if it means hunting deep in their account settings to find the cancel button, or calling a number which may or may not lead them through an endless phone tree to waste 5 minutes talking with someone on the retention team reading from a script. People don't r…

What I don't understand is why my banking app does not show a "cancel subscription" button with the payment. When I click that button, the recurring payment is automatically canceled, and the SaaS company can check that and know that I unsubscribed. Or something along these lines. There is already a power-asymmetry between consumers and companies. This should not extend to unsubscribing. Here, the consumer should hav…

Neobanks definitely have this feature. For example Revolut. There’s a “Block future payments” button, and once you click it, no more charges from that merchant will go through.

Re: The madness of SaaS chargebacks

#32

Post by amelius »

sambroner wrote: post #28
amelius wrote: post #25

Earlier quoted context omitted.

What I don't understand is why my banking app does not show a "cancel subscription" button with the payment. When I click that button, the recurring payment is automatically canceled, and the SaaS company can check that and know that I unsubscribed. Or something along these lines. There is already a power-asymmetry between consumers and companies. This should not extend to unsubscribing. Here, the consumer should hav…

How would this be tooled? A chargeback, a deep link to the cancel page, an API connection between bank and subscription? Chargeback is easy because it's under the card co's control. Deep link would require knowing the cancel page of every sub, plus handling auth factors. API connection would two way integration, with scoped auth between every bank and every service. Hopefully managed by an SI or aggregator, but the b…

This is another instance where we clearly need a regulator to make things work better for the consumer.

Re: The madness of SaaS chargebacks

#33

Post by pjc50 »

sambroner wrote: post #28
amelius wrote: post #25

Earlier quoted context omitted.

What I don't understand is why my banking app does not show a "cancel subscription" button with the payment. When I click that button, the recurring payment is automatically canceled, and the SaaS company can check that and know that I unsubscribed. Or something along these lines. There is already a power-asymmetry between consumers and companies. This should not extend to unsubscribing. Here, the consumer should hav…

How would this be tooled? A chargeback, a deep link to the cancel page, an API connection between bank and subscription? Chargeback is easy because it's under the card co's control. Deep link would require knowing the cancel page of every sub, plus handling auth factors. API connection would two way integration, with scoped auth between every bank and every service. Hopefully managed by an SI or aggregator, but the b…

Integrations are usually one-way (merchant calls bank API), but it's not beyond the bounds of practicality to keep a handle on whatever UID was assigned to the recurring payment in the first place, then send the merchant "by the way this subscription UID requested user cancellation".

Re: The madness of SaaS chargebacks

#34

Post by mrtksn »

pjc50 wrote: post #29
mrtksn wrote: post #18

Earlier quoted context omitted.

That's the point, I don't subscribe to the idea that %30 is ridiculous if you don't have a full blown department to handle that. Can be argued that Apple should give people that option but for anyone who minds being charged $43.95 for transaction that goes badly will be beter off to pay Apple and have piece of mind as long as their margins allow that.

Would you prefer to be charged $43 for 1 in every 100 $10 transactions, or $3 for every $10 transaction? edit: comment below reminds us that unhappy customers can get you banned entirely https://news.ycombinator.com/item?id=45248686

I would prefer to be charged $3 for every 10$ if I'm not ever going to get involved in this and the money will hit my bank account the first week every month. I would prefer to get charged $43 for 1 in every 100 transaction if I employ people who handle that for me.

So the $43 thingy is more like at least $3000 + (43$ per 1 in 100) and (2$ + %3) per + handling VAT remittence per + handling local laws per(which means you will likely need a few more highly specialized employees or services that you pay hefty cuts approaching Apple).

Taking money from people anywhere in the world in exchange for your product or service is trivial on Apple because they indeed employ a lot of people that deal with this stuff, thus %30 is fair IMHO.

Re: The madness of SaaS chargebacks

#35

Post by amelius »

evermike wrote: post #31
amelius wrote: post #25

Earlier quoted context omitted.

What I don't understand is why my banking app does not show a "cancel subscription" button with the payment. When I click that button, the recurring payment is automatically canceled, and the SaaS company can check that and know that I unsubscribed. Or something along these lines. There is already a power-asymmetry between consumers and companies. This should not extend to unsubscribing. Here, the consumer should hav…

Neobanks definitely have this feature. For example Revolut. There’s a “Block future payments” button, and once you click it, no more charges from that merchant will go through.

Yes, but this is not a correct way to unsubscribe. They might for instance still send a bailiff to collect their money.

What I'm talking about is an official way to unsubscribe. One that the user fully controls, and is free of dark patterns.

Re: The madness of SaaS chargebacks

#36

Post by ToucanLoucan »

pjc50 wrote: post #17
mrtksn wrote: post #13

This is something good about the Apple AppStore, they handle the chargebacks and no ridiculous fees incurs(When a refund request is initiated, they will send you a consumption info request over API to ask for your opinion but ultimately its their decision and its handled by them). That's why I don't have a problem with Apple's cut as they handle something that's actually quite complicated and annoying. Their control…

> no ridiculous fees incurs .. to the user. What do they charge the vendor, or it just the 30% of every transaction (which some might consider ridiculous).

As a customer, your business model isn’t my problem. I’ve had numerous frustrating experiences with cancelling these and similar things. If you make it a chore, even in the slightest way, chargeback. Suck it up.

Life is hard enough and I have enough things to do that actually require energy and focus, and I refuse to spend any of it trying to convince you that don’t need your SaaS product.

Re: The madness of SaaS chargebacks

#37

Post by CamelCaseName »

jddj wrote: post #22
mtmail wrote: post #9

We have very few chargebacks, not even 10 in 10 years and we consider us lucky. Stolen credit card happens more often than chargeback. I don't attribute it to better messaging or easier cancellation options, we do the same as many others, I guess it's just the type of product of customer. Even in HN comments I've seen people saying they use temporary card numbers (valid for one transaction only) or click a button to…

> They must've had bad experience with companies in the past? Ever used a gym, airline, or subscribed to a newspaper? Many businesses are genuinely customer-hostile.

I actually find airlines very customer friendly.

Depending on your country / ticket, you have a 24 hour cooling off period, easy to call phone numbers, self serve web platforms and apps, very well documented processes and procedures.

Most of the worst airlines have some of these things, because if they didn't, they wouldn't be allowed to operate in certain regions (Canada/US, EU)

Re: The madness of SaaS chargebacks

#38

Post by evermike »

foofoo12 wrote: post #23

Add a warning email 24 hours before the transaction. In the subject put "You'll be charged $10 for renewal in 24 hours". > we also provide a simple, self-service way to cancel the subscription It's hard to comment without seeing screenshots and description of the process. When people are cancelling under a perceived threat (will be charged otherwise), any inconvenience will become an extreme one.

Email about an upcoming charge is automatically sent a couple of days in advance, that’s Stripe standard feature. The other question is whether the user actually check their email (or which email they registered with).

As for cancellation, the problem is that even though it’s easy to cancel a subscription, chargebacks usually happen afterwards. It doesn’t matter how simple cancellation is, what matters is that the user first cancel and then still goes and files a chargeback.

Re: The madness of SaaS chargebacks

#39

Post by re-thc »

ilamont wrote: post #16

> What I don’t understand is why some people can’t just reach out and request it — instead of going straight to a chargeback. Customers don't want to "reach out" if it means hunting deep in their account settings to find the cancel button, or calling a number which may or may not lead them through an endless phone tree to waste 5 minutes talking with someone on the retention team reading from a script. People don't r…

> Customers don't want to {blah blah blah}

If this is the way it works and the result are chargebacks it just means things cost more in general (cost of business will be factored in).

It's not a good thing.

Re: The madness of SaaS chargebacks

#40

Post by msh »

evermike wrote: post #2

TL;DR: We run multiple SaaS products on Stripe. Even with clear renewal reminders, invoices and easy cancellations, some users skip refunds and go straight to chargebacks. A $10 payment ended up costing us $43.95 recently. Banks almost always side with the cardholder, and the only reliable “win” I’ve seen is when the customer withdraws the dispute themselves. So here’s my question to the community: What’s really goin…

The bank most likely does not ignore them as such, it’s more that they are superseded by the credit card merchant agreement.
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