Stripe increases prices for US businesses starting June first, 2023
stripe.com
stripe.com
Chargebacks drive me absolutely insane and it's not even my money (it's through a service I provide). These people come and use the service, get goods, etc then issue a chargeback and WIN even though I can lay out a perfect timeline of their actions.
I write/run event payment software and I've had people buy entry or "food tickets", spend/redeem them, then 2-3 days later issue a chargeback. Makes my blood boil and it feels like fighting chargebacks is a complete waste of my time. I don't think I won one (out of a handful from the last event). If I had my way I'd blacklist that person/card and if they tried to come again next year I'd confront them at the gate and tell them they can't enter unless they first pay for last year's chargeback on camera.
These are people who don't even reach out for a refund or with an issue (I know, all support goes through me and a link to file tickets is plastered everywhere on the website and in the app).
Sorry for the rant but this issue makes me irrationally mad.
I believe they are not good enough because the whole point of chargebacks is the claim that someone else made the payment. So the narrative is that you charged their card without their knowledge, then you got the food/drink for yourself.
USPS confirmation is a big factor, especially if the address matches the CC billing address.
That is not correct. There are a number of other legitimate reasons to chargeback.
- somebody else tries many codes, and happens to guess those customer codes
- vendors know the list of codes and abuse them (e.g. redeem at their own booth)
If they had their code stolen or lost their QR code (for people who don't use our app we have plastic cards that have the QR printed on one side) they could always come back to the info tent and we can look up their account and move their food tickets to a new card. That didn't happen.
We had a handful of people come up and say they thought they had more money on their card. In 90% of cases they lost track (I can list off how much they spent, when and where). In very few cases it appears the vendor double-charged them (fat-fingered the "add item" button or similar) so I void those transactions and send them on their way.
That's what really rankles me. Both online and in-person have ample support available that they could have availed themselves of. The Info tent for this most recent event was right by the only entrance/exit, they couldn't miss it if they had a legitimate issue.
In our case though, we've gotten quite good at writing these dispute letters and win more than 50% of them. Not perfect but ok. At least, it was until this pricing change which will cost us.
In my last job, the finance team basically didn't bother investigating or challenging chargebacks. The solution was to employ anti-fraud ML services (we used Ravelin) to prevent transactions that were at high risk of chargeback.
It was surprisingly effective, but expensive. Sadly, still cheaper than the potential cost of the chargebacks.
I have recourse for users, it's stupid-easy to reach out and I have "If you need help", "If you have a problem", etc links everywhere along with top-level "Contact Us" menu links.
These are people who came to a food festival, paid to get in, then bought food tickets, spent the food tickets (they are digital, I can track them), then issued a chargeback. They didn't come to the info tent (I know, I was there), they didn't file a ticket, they didn't reach out to the festival via social media, they just issued a chargeback.
Customers absolutely should have recourse but that's not what happened here, what happened here was fraud by assholes.
Doesn't that mean the legal system - which should be the civilised way to resolve disputes - needs fixing?
It's strange that some cultures delegate the power to make serious decisions about other people's property and finances to unaccountable, unregulated commercial entities.
Companies, especially online ones, have a way of offering no real customer support and a lot of these app based ones take a few dollars even if they offer a “refund.”
That generalisation is completely unfounded. There are millions of businesses in the world. Some of them are run by charlatans who would sell their first born child for a dollar more profit. Others are run by normal people who also have bills to pay.
So I’m sorry you hate them but allowing the companies to always be taken as right is the exact opposite of what we should be doing.
No, because the exact opposite of that is allowing the customers to always be taken as right and that is a free pass for fraudsters. There are customers who would sell their first born child to save a dollar too.
Is there a legal system resolution that wouldn't wind up costing the participants, especially the payer, more than it's worth to handle it that way. For many people, just taking a day off work to attend court is more than they can afford.
Ideally the parties submit their own version of events and if the facts are not in dispute then a judge or similar official can rule on the case without anyone ever needing to appear in person. The fees can be minimal but enough to deter frivolous actions. There can be a policy where the loser pays those fees by default so if one party will clearly win then there is an incentive for the other to settle immediately without going through the whole process.
If the facts are in dispute then you can move to providing evidence and if necessary to each side making a full case at some kind of trial. By the time you're appearing in person that will probably incur a higher cost even if the system is designed to minimise overheads. That means it's only worth going that far if there is enough on the line to justify the effort. But isn't that reasonable for something that will take a significant amount of both parties' time and the court's resources to decide and if the facts are in dispute and neither party has clear evidence that immediately resolves the matter? Again you can keep the fees low but not completely negligible and have a presumption that the loser will pay to incentivise settling early in most cases.
So, of course, I did a chargeback and never used Grubhub again.
This is one of the dumbest comments I've ever read. You're taking a premise you have no evidence for (UBER and GH have good customer service) and using faulty logic (assuming there are only two possible explanations) to make a conclusion that fits your wrong world view (that my literal direct experience must be incorrect).
We don’t eat the cost but we have to build it into the prices for other consumers to pay.
Meanwhile guess who ends up paying and wins? Consumers end up paying higher prices, spending larger volumes, and credit card companies pocket the fees from increased transactions and even dispute processing! The credit card companies literally have zero incentive to not side with the customer as it will decrease transaction volumes. So called consumer protections really protect financial institutions by allowing them to force businesses to build fraud costs silently back into the sales process.
The whole system is designed to pat the customer on the back with one hand while the other reaches to steal from their back pocket.
Why do you think America took soooo long to implement anti fraud chip cards? Because anti fraud tech reduced transaction volumes and thus profits! Credit card companies are making bank from fraud—both legit and friendly and disguising pro-fraud policies as “pro-consumer” legislation.
What’s crazy was that credit card companies touted 0-fraud liability on cards while having literally garbage anti-fraud tech… because merchants actually had to pay for the fraud.
My business has some services which are expensive and ephemeral (phone calls, custom work, etc.) and sometimes we get chargebacks on those. But, we tend to win a little over 50% of our disputes... with very extensive letters.
Curious if you already tried to add more detail to the dispute letters? Do you ever collect ID from a customer?
I also used to work on Facebook's event ticketing product (nearly 10yrs ago) and credit card fraud was a huge risk because ephemeral events frequented by younger people is a great vector to spend stolen cards. Much harder today with chip/tap but curious if you've tried doing 3DS liability transfers?
And then since it costs the credit card money to determine what _really_ happened, they're further incentivized to err on the side of the person who is going to be paying them.
And then add to that the fact that there's very little negative (to the credit card company) to clawing back the money from the seller. For the vast majority of companies, "I just won't accept Visa" anymore isn't realistic if they want to stay in business.
It seems like every factor pushes them in the direction of "just assume the payer is right".
AFAIK, that's the idea. The card processor is making a payment on the customer's behalf, and has very little space to disagree with him and send the money anyway. But that doesn't mean that the customer is correct, it only means that the processor is not the police, or the judicial system.
what's the median value? you can sell the outstanding debt to a collections agency, or even try collect it yourself.
Someone mentioned above that banks don’t give a damn because they’re insured. Maybe online businesses need fraud insurance too, especially with chargebacks on the rise.
The process would also be a lot easier and fairer if we could see the claims the disputer is making so that we can provide the exact evidence rather than the current black box of the process forcing us to guess at the evidence we have to submit…
This is one area where PayPal wins a bit over Stripe because their dispute process shows a message history where all you need to do is see the customer’s message, refute it, and you can even contest a dispute result afterwards if new evidence arises.
secondly are you using 3DS?
finally, any money you lose in chargeback fees or administrative work, take it to small claims and sue the pants off any asshole that tries to steal from you.
what are they claiming when they charge back a live event that they admit attending?
1. Reason: "Duplicate", they spent $40 to get into the festival (4x$10) then spent $40 to purchase food tickets (which they used) - I explained the situation, showed they clearly bought entry then bought food tickets and used them, I lost the dispute
2. Reason: "General", they bought 2 weekend passes and 3 day passes ($60 total) - I explained the situation, they updated the dispute to only be for $40, I maintained they bought the tickets and used them, I lost the dispute
3. Reason: "Duplicate", they spent $20 on food tickets after spending $20 to get into the festival - Once again I explained the situation and showed they bought entry, then bought food tickets shortly after entering the festival. This one actually went in our favor but under the new rules we'd still be out $15 since Stripe won't return the dispute fee even if we win.
I had actually forgotten that we did win one after those other two, which were legitimate, were lost.
All of the chargebacks happened from in-person payments, we didn't have a single chargeback from online purchases. All in-person payments were given an option to get an email receipt, all 3 of these chargebacks declined to get a receipt.
The two duplicates I can almost forgive, they bought entry then food tickets for the same amount (though again, all they had to do was reach out and I would have responded in <15min, often less than 5), but instead they just issued chargebacks.
However this all gets way grosser under Stripe's new policy. Not only do I have to put together the information to dispute it but we will be out $15 no matter what. Our transaction average is somewhere around $40 so right off the bat almost 40% is lost with zero recourse and then we have to fight to keep from losing 140%.
Instead of being an advocate for their customers to the financial institutions, Stripe is siding with them and we all have to fend for ourselves.
Obviously, consumer protection mechanisms are needed and around for a good reason, but something happened during the pandemic. People don't care anymore. Look it up, chargeback fraud has massively increased since 2020.
I doubt Stripe is big enough to fight their partners on something like this anyway though.
Merchants could opt in to the database by agreeing to share chargeback data. If someone on the list tried to sign up, the merchant could either block the sign up or present an alternative/safer payment method (e.g., direct deposit).
All that being said, no idea if it'd be worth it for merchants.
"Hello,
We’re letting you know about Stripe pricing changes for international card transactions, disputes, and sales tax, starting June 1, 2023. We also want to share ways we can help you reduce costs and grow revenue.
International card transactions
"Over the past few years, card networks have increased the total fees that Stripe pays for card processing. Because of these costs, starting June 1, Stripe’s additional fee for international card transactions will change from 1.0% to 1.5%. There’s no change to our standard 2.9% + $0.30 pricing for US card transactions.
[...]
Disputes
Whether you win or lose a dispute, card networks charge Stripe a fee in either case. To cover these costs, starting June 1, Stripe will no longer return the $15 dispute fee for successfully contested disputes. The dispute fee itself is not changing."
Thoughts?
Your org owes now stripe $1500. Rinse, repeat.
However,the process sucks. These days if a customer wants they can essentially get whatever they buy for free. I've gone down the rabbit hole several times leading up to arbitration and given up. In most cases it is a few hundred $ so it just isn't worth the fight. I 'win' the first round most of the time, the issue becomes if there is a second dispute for the same transaction, that is when it becomes nearly impossible to win without more compelling evidence.