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We are a small business that provides a service. In business more than 30 years. We never win our disputes dispite providing mountains of evidence. At this point we dont even respond to them we simply file a lawsuit and add all our court fees on top. We have won 100% of our cases. 100% while presenting literally the same evidence we would in the dispute process. Banks and the credit card processors are accesories to fraud plain and simple. Either a class action lawsuit needs to happen or legistation does.

If this was my money they were charging back I'm probably steal this idea. They amount isn't even that much (like less than $200 total for hundreds of thousands coming in) but it's the principal of the thing and it just makes me mad that people are so selfish and scamming small companies.

To clarify, do you file a lawsuit against the financial institution or the individuals who requested chargebacks?

Ironically, we are in the business of providing people court documents which they have to sign / notarize, and we still get this kind of chargeback behavior.

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.

They absolutely are accessories, but mostly by inaction. They probably have insurance that covers them so it's generally just not worth it to get involved - just approve for the claimant and move on.

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.

How much is your transaction size to be able to make a law suit worth it?

My wife and all her friends just say 'put in a chargeback' if they are unhappy with anything. I can't blame them, given the lack of customer support for many online shops but it hits too close to home. I've been dealing with chargebacks in our business for over 10 years. It's only gotten more popular. The processors now refer to it as 'friendly fraud'. Now we don't even fight chargebacks, we just hook into the visa RDR network or Ethoca's dispute mgmt tool, autorefund and move on. If anyone has a solution, I'll gladly pay handsomely. We spend hundreds of thousands a year on chargebacks.

> I'll gladly pay handsomely. We spend hundreds of thousands a year on chargebacks

what's the median value? you can sell the outstanding debt to a collections agency, or even try collect it yourself.

$50-100. We run analytics on the chargeback code / bank bin and see which is likely to win or deny. The whole area is just a tax on helpless business owners. We have 30 day return windows, 24-7 customer service via phone / email. Some people just wanna buy stuff online and get it for free. Price of doing business i suppose but it still pisses me off.

Same thing with my business. The messed up part is if a new business owner is starting off and doing everything by the book, a chargeback early-on can get him banned from Stripe/PayPal.

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.

I'm surprised to hear that - I run an ecommerce business and have had a handful of chargebacks (same situation, no contact at all prior to them initiating the chargeback). I send in the order info and delivery confirmation from USPS, and I've won every single time.

My software is event payment software (pay to get into the event, buy "food/drink tickets" to spend at vendors), we don't ship anything, it's all done in-person (or people buy on their phones). I guess date and times of in-person transactions (and when they spent the tickets) aren't good enough for Stripe. That's all I have, we don't have cameras or anything like that, it's mainly used for outdoor events. I assume the USPS confirmation is big factor. I'm glad to hear it's not so crappy for everyone though and people DO win.

> I guess date and times of in-person transactions (and when they spent the tickets) aren't good enough for Stripe.

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.

> the whole point of chargebacks is the claim that someone else made the payment

That is not correct. There are a number of other legitimate reasons to chargeback.

Out of curiosity, are these events related in any way to gambling or er, other types of adult entertainment?

Absolutely not. I know a lot of “Stripe horror stories” are shady once you dig deeper but this is software for food festivals. Sometimes they also sell alcohol but that’s the only “adult” aspect.

Is it possible that codes are enumerable?

By codes do you mean credit cards? All our chargebacks happened on in-person dip/tap payments. We didn't get a single chargeback from our online portion of sales.

I mean voucher codes. Two potential issues:

- 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)

No, each user has their own random code that is paired with a UUID generated for their account. Both are needed to spend food tickets/entry passes/etc from these accounts. They are combined into a string and encoded as a QR Code.

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.

Chargebacks are the only recourse consumers have a lot of times. 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.” 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.

I don't disagree and I feel like you didn't read my comment at all.

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.

I was working on a service to allow local haunts to do online ticketing without them having to give up a huge chunk of their already small profits. I gave up after talking to a few haunts that said they already had a big problem with chargebacks. Turns out people are just terrible.

I did read your comment and you gave a lot of anecdotal reasons why charge backs screw you over despite you doing such a good job and never deserving it. Doesn’t change the fact that charge backs are an inherent good and as someone who has charged back it isn’t like you just press a button. You have to give dates, names and reasons + wait for them to determine. It’s also a prerequisite to have reached out to the seller and gotten nowhere.

Chargebacks are the only recourse consumers have a lot of times.

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.

> Doesn't that mean the legal system - which should be the civilised way to resolve disputes - needs fixing?

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.

There are some legal procedures that can be done online, by email. Something like this could totally be setup to take place digitally.

Small claims procedures exist in many places for exactly this reason.

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.

I have a story I'm fond of telling-- I ordered a pizza from GitHub for pickup. The restaurant was literally closed when I arrived. GitHub customer service instantly "resolved" the issue by ruling in their own favor (I even showed them pictures of the restaurant with chains on the door).

So, of course, I did a chargeback and never used Grubhub again.

My experience with Uber and Grubhub et al is that even they generally tend to side on the consumer, especially for small value transactions like a food order. So either you’re being an unreliable narrator or Grubhub in particular has gone off a cliff. But given that Grubhub is subject to USA chargeback policies still I’m not sure why they would invite a chargeback like that for your case.

> So either you’re being an unreliable narrator or Grubhub in particular has gone off a cliff.

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).

Something like 90% of our disputes are friendly fraud and the other 10% isn’t because we don’t provide customer support… it’s because they don’t even bother contacting support because the dispute process is so encouraged now.

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.

TBH, last time I did a chargeback, I did not contact support first. That's because I could see a clear way to get my money back via a chargeback (dispute transaction button in the online bank). There was no such button on the company's website.

Honestly I wish Amazon had such a button. I hate paying for things.

Amazon has that option for nearly every purchase.

> 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.

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 I don't understand, is on most if not all my webapps, I offer 100% refund. It is clearly listed, and they don't even have to be logged in, just put in your reciept. It is clear on every single part of the page as well, even the contact form has it. Yet I still get chargebacks

I suspect that some people just see the charge on their CC and can't figure out where it's from or don't remember making it. A few of the folks who have charged back purchases from my business have specifically said this (and offered to withdraw the chargeback) when I reached out to them about it.

This is important - you should check what your business appears on people’s statement as and make sure it’s recognizable. I’ve had business bills come is as completely unrecognizable companies that turn out to be entirely legit after doing some searching.

I think the problem is that, as a general rule, it's much more impactful for a person to have their money taken than it is for a business. If the credit card company has to err in favor of one of the entities, it's less impactful (to the entity) if it's in favor of the buyer.

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".

The chargebacks system is entirely flawed. Recently stripe started displaying the response letters from the credit card companies on why a dispute was lost and the reasoning they put in basically said “merchant provided evidence but customer insisted they were right…”

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.

I completely agree with the irrational anger. It feels so unfair particularly when I put personal effort into providing a service.

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?

It will never cease to amaze me you can pay for things with magical leprechaun money that disappears later.

Not everyone can follow in the footsteps of ProtonVPN, who will let you mail an envelope of cash to a PO box in Switzerland if you want to.

Mullvad does, and they're a hell of a lot more trustworthy than Proton.

That's why cryptocurrency is attractive to some people.

On the other side, I have dealt with several merchants who wrote down my debit/credit card numbers and would charge me after I cancelled (specifically several fitness gyms). So I am very happy that chargebacks are in place.

first of all, call the police - that's criminal.

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.

3DS won't help here. I don't believe the customers there are disputing for "fraud use of my card" here, which is the only thing 3DS helps with.

then how is this person losing so many disputes?

what are they claiming when they charge back a live event that they admit attending?

What sort of reason do they give for these chargebacks?

The 3 most recent ones:

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%.