Is trying to overturn chargebacks a COMPLETE waste of time for entrepreneurs?
1) According to Stripe, it doesn't matter if you win or lose the dispute -- the mere fact that a dispute was filed counts against your account standing in either outcome:
"Accepting disputes: You can accept a dispute, effectively agreeing that the cardholder’s reason for the dispute is valid. Accepting a dispute isn’t considered an admission of wrongdoing and is sometimes the most appropriate response. The customer has already received their refund through the dispute process—–if you agree with the refund, it’s best to accept the dispute. Take this action if you don’t intend to respond and submit evidence. Although accepting disputes doesn’t negatively affect your business any further, it’s not a viable alternative to an effective refund or returns policy. *Dispute activity is calculated based on the disputes received, not won or lost*, so dispute prevention is critical... *Remember, the card networks don’t consider how many disputes you win or lose, only how many you receive—a withdrawn dispute still counts as a dispute.*"
2) Taking the time to meticulously prepare and compile all of the evidence required to adequately respond to a dispute will likely require hours of work -- hours that could better be spent building and improving your business, AND taking action to prevent future chargebacks by improving your business systems. Depending on the dollar amount and your effectiveness as an entrepreneur, you can likely make way more money with those hours spent productively on your business than you could earn back by winning the dispute.
3) Even in the best of circumstances, you have maybe a 50/50 chance of winning the dispute. I again quote Stripe on this point:
"The following table shows the expected win percentage for each ranking. Even in the most favorable cases, it’s very difficult to overturn a disputed payment."
|Dispute Win Likelihood Ranking|Chance of Winning the Dispute| |:-|:-| |5 dots|60%| |4 dots|40%| |3 dots|25%| |2 dots|15%| |1 dots|5%|
4) My biggest argument AGAINST a blanket policy of just, accepting all disputes would have been: "By doing so, it's a de facto admission of wrongdoing, and not 'fighting against the claims' would make your account look worse, and sketchy, so you'd be more likely to get banned by your payment provider." However the quote from Stripe in point 1 seems to indicate... it doesn't really work that way. Since your dispute SUBMISSION rate (not your dispute win vs. loss ratio) is what fundamentally matters and will compromise your account standing.
I'm a big advocate of streamlining processes as much as possible, and reducing the cognitive load spent on things that don't really matter much, and that take up tons of time and mental energy. Carefully compiling reams of evidence, like a courtroom lawyer, to challenge a very rare dispute, seems like a prime candidate for something that would take a ton of time, be unlikely to end in your favor anyway, and make zero actual impact on your account standing -- since the filing of the dispute ITSELF is what compromises your payment provider account standing. So WHAT'S THE POINT?
Assuming your dispute rate is low, the money lost likely isn't going to have any ruinous impact. Plus if the rare dispute has the potential to sink your business, you're fucked anyway as far as I'm concerned. So, aside from the "moral victory" of standing up against what you believe is a phony dispute... from a practical standpoint? I think the best move, whenever you get a dispute, is to simply accept it, move on, and focus your time and energy on continuing to grow your business, improve your customer service, and do anything/everything to reduce the number of disputes you receive in the future.
What are your thoughts on this?