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Stripe refunds: fees from the original charge are not returned

stripe.com

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Re: Stripe refunds: fees from the original charge are not returned

#51

Post by octocode »

polemic wrote: post #47
mchusma wrote: post #33

Note: this is different than Braintree and Amazon payments, which either refund in full or simply charge only the $0.30 fee. Stripe is now at or near the most expensive here relative to the competition. The idea that they have been doing customers a favor is not accurate. I have used stripe for years, but they are a company that has continued to make things worse with every update, versus AWS which has my trust they…

> ..don't test production checkout flows.. That's good advice. Payment providers have test gateways and cards for you to test your code against. While it might be a minor convenience for you to have 'fake' cards in their production system, the only thing they have to gain is a potentially serious fraud loophole (at best), or an expensive footgun for you. Don't "test" checkout flows in production unless you're using r…

I used to run a company card for testing Stripe on prod, and then just processed a refund afterward. It was mildly inconvenient, and eventually I just stopped because there was never actually a difference between their staging and prod behaviour.

Re: Stripe refunds: fees from the original charge are not returned

#52

Post by jaxn »

cosmotic wrote: post #9
edwinwee wrote: post #5

Some more context: this has been around for a couple years (for only new Stripe users). Payments are costing more to process. Card network fees have been gradually increasing over the years. Stripe has kept this at bay for its longtime users for as long as we could, even as it's been getting more expensive. But with the water rising across the whole pond, we sadly have to start charging for some of these things.

What portion of the transaction cost goes to stripe and what portion goes to Visa/Mastercard or the card-holder's bank? Which part is the cost that is increasing?

Stripe is Visa.

Visa is one of Stripe's largest shareholders.

Re: Stripe refunds: fees from the original charge are not returned

#53

Post by tomnipotent »

edwinwee wrote: post #5

Some more context: this has been around for a couple years (for only new Stripe users). Payments are costing more to process. Card network fees have been gradually increasing over the years. Stripe has kept this at bay for its longtime users for as long as we could, even as it's been getting more expensive. But with the water rising across the whole pond, we sadly have to start charging for some of these things.

Maybe now you can start charging us properly for debit card transactions, instead of pocketing the difference.

My company is now evaluating options to move off Stripe because of this fiasco and how it was communicated to customers, along with the complete lack of explanation of whether this impacted the % fee or just the flat $ fee.

Re: Stripe refunds: fees from the original charge are not returned

#54

Post by loeg »

cosmotic wrote: post #9
edwinwee wrote: post #5

Some more context: this has been around for a couple years (for only new Stripe users). Payments are costing more to process. Card network fees have been gradually increasing over the years. Stripe has kept this at bay for its longtime users for as long as we could, even as it's been getting more expensive. But with the water rising across the whole pond, we sadly have to start charging for some of these things.

What portion of the transaction cost goes to stripe and what portion goes to Visa/Mastercard or the card-holder's bank? Which part is the cost that is increasing?

I don't know what Stripe's cost to merchants is.

As far as Visa/MC and the banks? The banks get something like 9/10 of that portion off the top; Visa/MC get about 1/10th.

Re: Stripe refunds: fees from the original charge are not returned

#55

Post by zaroth »

intopieces wrote: post #8

Seems reasonable to me. The payment was successful, which is the service Stripe provides. Is this out of step with the industry at large?

It’s not reasonable because the cost which the fee is covering is not the cost to process the transaction.

It’s three things, in order of their share of the total cost;

1) Rewards programs

2) Fraud risk

3) Interest expense

The rewards are negated, because a refunded transaction earns no points. The fraud risk is zero, because the merchant has returned the funds. This leaves only a portion of the interest expense, assuming the transaction balance was even paid into the merchant account at that point, but then the refund acts to reduce the card balance so that might even cancel out too.

Basically it’s justifiable to hold into the flat fee (e.g. $0.20) but to hold onto the 3% is an absolute scam.

Re: Stripe refunds: fees from the original charge are not returned

#56

Post by exhilaration »

mchusma wrote: post #33

Note: this is different than Braintree and Amazon payments, which either refund in full or simply charge only the $0.30 fee. Stripe is now at or near the most expensive here relative to the competition. The idea that they have been doing customers a favor is not accurate. I have used stripe for years, but they are a company that has continued to make things worse with every update, versus AWS which has my trust they…

We use Adyen (we deal with international customers) and they've got the same rule - no test cards in production. I've never heard of a payment provider allowing test cards in prod.

Re: Stripe refunds: fees from the original charge are not returned

#57

Post by jaxn »

edwinwee wrote: post #5

Some more context: this has been around for a couple years (for only new Stripe users). Payments are costing more to process. Card network fees have been gradually increasing over the years. Stripe has kept this at bay for its longtime users for as long as we could, even as it's been getting more expensive. But with the water rising across the whole pond, we sadly have to start charging for some of these things.

Are processing fees really going up? As a longtime brick-and-mortar retailer, I am used to fees going up and then changing to a new processor to get competitive rates again. You just go back and forth between the different providers every few years. They give you a lower rate and then slowly raise the rates because they know it's a pita to switch.

As a SaaS founders, I use Stripe because it was easy to get reliable subscriptions up and running. I have no returns, so this particular policy doesn't impact me. However I know that I am still overpaying for convenience and it will likely be time to make a change this year or next.

Maybe when Stripe will drop rates once they start experiencing the same churn other processors deal with.

Re: Stripe refunds: fees from the original charge are not returned

#58

Post by randall »

senordevnyc wrote: post #10
edwinwee wrote: post #5

Some more context: this has been around for a couple years (for only new Stripe users). Payments are costing more to process. Card network fees have been gradually increasing over the years. Stripe has kept this at bay for its longtime users for as long as we could, even as it's been getting more expensive. But with the water rising across the whole pond, we sadly have to start charging for some of these things.

Hmm, so when refunds are processed, Stripe still always has to pay the interchange fees?

As far as I know, this is true.

Re: Stripe refunds: fees from the original charge are not returned

#59

Post by koolba »

tomnipotent wrote: post #53
edwinwee wrote: post #5

Some more context: this has been around for a couple years (for only new Stripe users). Payments are costing more to process. Card network fees have been gradually increasing over the years. Stripe has kept this at bay for its longtime users for as long as we could, even as it's been getting more expensive. But with the water rising across the whole pond, we sadly have to start charging for some of these things.

Maybe now you can start charging us properly for debit card transactions, instead of pocketing the difference. My company is now evaluating options to move off Stripe because of this fiasco and how it was communicated to customers, along with the complete lack of explanation of whether this impacted the % fee or just the flat $ fee.

Is that even possible? I though debit cards entered using purely digits (vs pin) have to be run through the credit card network.

Is there a provider who provides debit card online processing?

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