Comment by JumpCrisscross | Hacker News Reader

Comment by JumpCrisscross | Hacker News Reader

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> What specific "lies" did Mozilla engage in?

I was pitched on privacy. Whether I and others believe we were lied to are subjective judgements.

> you'll have a hard time charging back

No, I won’t and you likely wouldn’t either unless you’re constantly claiming chargebacks.

> They'll hear "donation", "I authorized this charge", and deny the chargeback

Six figures (and counting) already approved by Amex for a series of donations a friend made over a year ago!

> AFAIK chargebacks are basically adjudicated via arbitration by visa or an independent arbitrator

Depends on the card association. But usually, “the issuing bank makes the final decision on whether to accept the chargeback” [1]. The merchant has recourse per their merchant agreement. But the money comes out of their pockets first. And given it’s a donation, there is an almost zero chance that Mozilla will win.

[1] https://www.clearlypayments.com/blog/chargeback-statistics-i...

> “the issuing bank makes the final decision on whether to accept the chargeback”

That is incorrect, at least for the chargeback types you brought up in this thread and most in-person payments.

You seem to have a flawed understanding of how the chargeback process actually works, presumably largely due to your bank covering some of your past chargebacks out of their pocket to retain you as a customer or because they're contractually or legally required to. Just because you got your money back doesn't mean that the merchant was the one paying for it in the end.

> That is incorrect, at least for the chargeback types you brought up in this thread and most in-person payments

Where did you hear this? It’s incorrect, at least for Amex and MasterCard. (I don’t know about Visa.)

The merchant pays. Merchant agreements give the banks the power to forcibly remove funds from the merchant account on initiation of a chargeback. If the merchant doesn’t replenish per their agreement they face fees, restrictions and potentially termination. There is zero chance American Express just picked up the six figures of chargebacks for the folks who put them in today.

> Merchant agreements give the banks the power to forcibly remove funds from the merchant account on initiation of a chargeback.

Yes, and the amount will be booked right back if the chargeback is eventually lost by the issuer/won by the merchant acquirer. If that happens, it's up to the issuer to further claw it back from the cardholder (if permitted by rules and regulations) or write off the loss.

> There is zero chance American Express just picked up the six figures of chargebacks for the folks who put them in today.

Receiving an immediate credit is quite typical (and in some cases required by regulations), but receiving the money back is by no means an indication of having won the chargeback case. The keyword here is "provisional credit":

> When a chargeback is filed, the process to reach a final verdict can extend for weeks or even months. During this waiting period, issuing banks typically provide cardholders with a provisional credit covering the amount in question. If the resolution favors the merchant, this provisional credit can be easily reversed. (from [1])

All of this is usually also mentioned in the cardholder agreement and the "boilerplate" text you receive as part of a provisional credit from the issuing bank. Definitely both worth a read, especially when large amounts are involved.

[1] https://chargebacks911.com/provisional-credit/

> the amount will be booked right back if the chargeback is eventually lost by the issuer/won by the merchant acquirer

Not quite.

The funds (and a fee) are confiscated from the merchant the moment the chargeback is initiated. The issuing bank, at that moment, has the option of providing a credit to the consumer. (After 10 days they have to.)

After a week, if the merchant doesn't object, the funds are released to the issuing bank. That either balances the credit or is paid out to the consumer. If the merchant objects, another timeline starts, but it's ultimately the issuing bank (i.e. the customer's) that makes the final call.

> receiving the money back is by no means an indication of having won the chargeback case

Of course. Now look up how often merchants win chargeback disputes. It's about a fifth of the time. For porn and non-profits that drops to almost nothing.

No, on all of timelines, finality, and who makes the final call. You're making very confident statements about a complicated process you don't seem to know all that much of.

> After a week, if the merchant doesn't object, the funds are released to the issuing bank. [...] it's ultimately the issuing bank (i.e. the customer's) that makes the final call

The funds are moved immediately, but within a given timeframe (depending on the network, but usually much more than a single week), the merchant has the option of clawing them back once again. That's called a "second presentment" (see for example [1] or [2]).

The issuer then has the option to submit a second chargeback if they still believe they are in the right, and depending on the type of chargeback, the acquirer (and by extension merchant) might get one more chance to send yet another response. If they are still disagreeing at the end of these steps, the case can be brought to the network, which then makes a final ruling, but that's very expensive (and the losing party pays), so it's usually avoided.

The money moves from issuer to acquirer and back for all of these steps. Only if the issuer makes the last move, and the acquirer does not challenge it, is the chargeback considered "won". All of that is usually hidden from at least cardholders via the provisional credit mechanism mentioned above.

In any case, your assertion that the issuing bank has the last word is simply not true.

[1] https://developer.mastercard.com/mastercom/documentation/get...

[2] https://chargebacks911.com/second-presentment/

> your assertion that the issuing bank has the last word is simply not true.

Fair enough, I was categorising arbitration as legal escalation, given its binding arbitration and precludes the courts. But yes, the final decider is either a court or arbitration (for MasterCard).

Until escalated to arbitration or the courts, the issuing bank has last word. And in no case is the issuer eating the chargeback, the worst they’re eating is a few hundred dollars of arb fees and service costs.

> Until escalated to arbitration or the courts, the issuing bank has last word.

Again, no. It depends on the type of chargeback (in particular, whether that type implies an "allocation" or a "collaboration" flow [1]) which party, i.e. issuer or acquirer, requests arbitration, and by extension who has the last word in case arbitration does not happen.

[1] https://support.kount.com/hc/en-us/articles/21155079759252-T...

>I was pitched on privacy. Whether I believe I was lied to is a subjective judgement.

The standard for chargebacks isn't "Whether I believe I was lied to".

>Six figures (and counting) already approved by Amex for a series of donations a friend made over a year ago!

Are we talking actual frauds (eg. kickstarters) or "ACLU was more woke than I'd like so I'm going to charge back 2 years worth of donations?"

>Depends on the card association. But first decision maker is the issuer. And as I said, Amex has already cleared chargebacks from donations a friend made over a year ago.

Sounds like Amex just caved and refunded you out of their own funds because you were being a Karen, and you are in fact treating chargebacks as a super-bad review.

>The merchant has recourse per their merchant agreement. But the money comes out of their pockets first. And given it’s a donation, there is an almost zero chance that Mozilla will win.

There's nothing in the merchant agreement that suggests "given it’s a donation, there is an almost zero chance that Mozilla will win".

> standard for chargebacks isn't "Whether I believe I was lied to"

6% of chargebacks are due to dissatisfaction [1].

> Are we talking actual frauds (eg. kickstarters)

I’m talking about Mozilla.

> Sounds like Amex just caved and refunded you out of their own funds

Not how chargebacks work. And Amex isn’t taking a six-figure hit for anyone.

> nothing in the merchant agreement that suggests "given it’s a donation, there is an almost zero chance that Mozilla will win"

If you’re a porn site, casino or non-profit you’re almost never winning a chargeback dispute. (Merchants only win about a fifth of the time in general.)

[1] https://www.clearlypayments.com/blog/chargeback-statistics-i...

>6% of chargebacks are due to dissatisfaction [1].

Note that "dissatisfaction" isn't an actual chargeback reason code[1]. The closest that exist are "Not as Described or Defective Merchandise/Services" and "Misrepresentation", none of which imply it's up to the consumer to decide. Unfortunately since chargebacks are basically arbitration, there isn't really a history of case law to determine what actually counts. I could barely find any information on what the statue (equivalent) is supposed to be.

[1] https://docs.adyen.com/risk-management/understanding-dispute...

> closest that exist are "Not as Described or Defective Merchandise/Services" and "Misrepresentation", none of which imply it's up to the consumer to decide

Issuing bank decides. Consumer advises.

> could barely find any information on what the statue (equivalent) is

There is very little statute governing chargebacks. It’s almost all contractual. Very different from paying with cash, cheque or wire.

> Issuing bank decides.

No; see https://news.ycombinator.com/item?id=43237555 for details.

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