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The madness of SaaS chargebacks

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Re: The madness of SaaS chargebacks

#91

Post by lixtra »

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.

The requested feature is more like list-unsubscribe headers for mailing lists[1]. Instead of categorizing the mail as spam (blocking) you send a clean unsubscribe back to the sender.

[1] https://www.twilio.com/en-us/blog/insights/list-unsubscribe

Re: The madness of SaaS chargebacks

#92

Post by [deleted] »

bwb wrote: post #90
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…

I love love love this comment. Banks are barely running on a modern stack, let alone doing anything userful within banking, and you want them to build an api to cancel an outside service? :)? Love this so much, most HN comment ever :)

[deleted]

Re: The madness of SaaS chargebacks

#93

Post by singleshot_ »

JumpCrisscross wrote: post #70
evermike wrote: post #47

Earlier quoted context omitted.

As I mentioned in the article, this is extremely rare for us, but it has happened a couple of times. And that’s where I start having questions and frustration about the process itself. I’ve shared examples in the article.

> this is extremely rare for us, but it has happened a couple of times Put punitive terms into your SLA. (Though check with a lawyer about adhering to your merchant agreement.) Charging back doesn’t cancel a contract. If you want to be vindictive, you could sell the debt to a collector.

Restatement (Second) Contracts sec. 356 would seem directed squarely at this bad idea.

Re: The madness of SaaS chargebacks

#94

Post by greyb »

papa_bear wrote: post #89
greyb wrote: post #86

Earlier quoted context omitted.

>Perhaps this is a question you should be asking yourself. Is your cancellation system working? There was a billing session created the day after the initial charge, are you sure there wasn't an attempt to cancel the that the system failed to register and log due to an error? This happened to me once with a meal planning app (Eat This Much). I did validly cancel and get a cancellation email, but Stripe had errored ou…

I remember this! Sorry again for the frustration >_ We do get a fair number of disputes like the author where customers will cancel after getting billed, and then dispute it, even though we always give refunds to people who email and ask for one. It also feels like there's been a significant up-tick in recent months of disputes like these, maybe a reflection of the current economic climate. Hard to blame the customer…

Haha, I'm amused you remember. I went back in my emails and it happened back in 2018. I was a not-so-eloquent college student back then. I appreciated that you both handled it with grace and kindness - sorry if I sounded irate at the time, and hope you're doing well these days. :)

Re: The madness of SaaS chargebacks

#95

Post by porridgeraisin »

ta1243 wrote: post #78
re-thc wrote: post #68

Earlier quoted context omitted.

> Make it easier to unsubscribe than doing a chargeback. Your competitors who do that will have a lower cost and be able to undercut you and you'll go out of business. How do you know people aren't already doing so? It's not about the competitors but the industry in general. Have you not read the post I was replying to? I quote: > People don't remember they signed up. > They can't remember how to log in from a differ…

Send an email saying "you're about to be charged, click here to cancel your membership"

Exactly. This is what I want all my subscriptions to do.

In UPI (I know I know...) there is an autopay system. Your single UPI app has a single page with all your subscriptions. You can cancel or do whatever there and it's all handled in one place. My openai, streaming services, youtube premium, amazon prime, everything is on there. It gives me notifications before a charge is about to occur. No dark patterns.

This is the standard I expect.

Since credit cards don't provide a centralised thing like that, it's up to the SaaS provider to give the equivalent experience.

Cancelling should be _exactly_ as easy as signing up. If that means your MAU doesn't increase as fast, maybe you have a shit product. Case in point: amazon prime can have cancel buttons littered all across every page and I'm still not gonna cancel it.

Here's the simplest implementation: Few days before and on the day of charging, some infobox on the app's most attention-requiring screen, and an email telling me I'm gonna be charged. In all those communications, the main CTA should be a cancel button, that without further ado, let's me confirm and cancel the thing.

Anything even one step more complicated is a dark pattern.

Someone downthread mentioned - what if they want to change their subscription level instead of cancelling? In that case, two CTAs: change plan, and cancel. Both equally sized and right next to each other with good color contrast - important! None of that greyed out cancel button bullshit.

Re: The madness of SaaS chargebacks

#96

Post by joshstrange »

I run a business that handles food festival entry/payments and I loathe chargebacks. It's not even my money, it's the festival that loses out but I hate them with a fiery passion. It's not even that much money, we are talking less than 0.05% of total payments (if not lower) but it makes my blood boil.

Why? Because it's 100% fraud. I've personally reviewed every case most of them are filed under "duplicate charge". When I review their account I see something like this:

- Loaded $10 on account

- Spent $3

- Spent $5

- Loaded $10 more

- Spent $6

- Spent $6

And they decide to dispute the second $10. Even when I can show exact timestamps of all their purchases/reloads the banks don't care. They don't care they they got the product and are scamming the festival. They just don't care.

And before "I can see how someone can make that mistake when they see 2x$10" sure... but then why not reach out to support (buttons are on every page to reach out directly to me through a form and I respond in As shown here, when someone charges back on a $10 you _immediately_ lose $15. No matter what, $15 is gone, so now you are $25 in the hole (plus Stripe fees) before you even get started. At _best_ you can recoup $10 but history has shown that the chances of winning are next to 0 and at best you end the day with -$5.

But wait! There's more! Stripe added _another_ fee of $15 if you try and counter which you will get back only if you win the dispute (which you won't).

So, if you charge someone $10 and they do a chargeback that you fight and lose you are out $40+ ("+" because of the Stripe fees on the original payment). It's just absurd. If you don't fight it you are out $25+ and if you fight it and win you _only_ lose $5.

Winning never felt so shitty...

Re: The madness of SaaS chargebacks

#99

Post by agwa »

evermike wrote: post #57
daft_pink wrote: post #53

This is essentially why everyone is willing to refund these type of payments when customers reach out.

Sure, and that’s the right approach. We also issue refunds, but for that, the customer needs to write to us and ask.

I would suggest not requiring customers to write you for a refund. My company automatically refunds the most recent payment if the subscription is canceled within 7 days of renewal. The invoice email that we send when the subscription renews tells the customer how to get a refund. Chargebacks still happen (rarely), but if your company had this policy it would have prevented the first chargeback you mention.

Re: The madness of SaaS chargebacks

#100

Post by greyb »

parliament32 wrote: post #72
evermike wrote: post #15

Earlier quoted context omitted.

I know for sure that if users start filing complaints against you with Apple, they can simply ban your account entirely and for long. Some companies never recover from that and end up shutting down.

AMEX was/is the old-school equivalent of this. They would unapologetically ban merchants from accepting AMEX (forever!) after even a handful of complaints/chargebacks. This is also a key part of why you see some shops/restaurants with the "no AMEX" signs on their terminals -- don't be fooled by the "AMEX is too expensive to accept" red-herring, the actual difference for AMEX vs Visa/MC is ~1%[1], really not enough to…

Anecdotal, but every small business owner I've talked to have said it's because of the 1% difference in fees, even with OptBlue.

I've only had 1 business owner ever say it was due to chargebacks, a small tea shop in a Chinatown in Canada. They also don't take Mastercard for the same reason.

This is also why American Express launched the Cobalt card in Canada, which had a 5x multiplier for eats, drinks and groceries, and pushed it so hard for years on social media and bus shelters, despite eventually starting to disincentivize it (it was a loss leader/upgrade feeder product for Amex). They wanted to win merchants back with a new generation of hip, social media savvy Amex customers.

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