
Stripe updates policy: free refunds and chargebacks - sas
https://stripe.com/blog/a-pricing-update
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the_bear
This is great. I've never actually had a customer dispute a charge through
Stripe, but if it happened, I wouldn't be able to challenge it before (I only
charge $10 at a time, so it would have been cheaper to just accept it). This
always concerned me because it left the possibility that a customer could go
back and dispute the last year's worth of charges and there's nothing I could
do. This happened once when I used Amazon FPS to process payments, and I was
forced to just let the customer take $120 from me. I know it's not much money,
but it's really discouraging when you do everything you can to be up-front
about billing, (monthly payment notifications, no-question refunds, easy
cancellations) and then you have to accept frivolous chargebacks which is
basically admitting to the bank that you did something wrong.

~~~
jcoby
Just FYI, with most CC processors, chargeback fees are in addition to
reversing the original charge. So you would be out $25 if you were to get a
chargeback. And if you won you would get the $10 back but still loose the $15
chargeback fee putting you at -$5 overall (that's not even including
transaction fees that stack on top of everything).

Most CC companies have a 90 day limit on charges that can be contested. Amex
is the only one that I know of that goes further back (1 year IIRC but it may
be longer).

Stripe has decided to change that and will refund the $15 if you win. It's a
nice change but in my experience the vendor rarely reverses chargebacks.

~~~
dangrossman
I've gotten Visa chargebacks as far back as 7 months after the fact. It was a
surprise when it happened as I had thought 6 months was the limit, since 180
days appears quite often in merchant account agreements as a hold period for
various issues.

~~~
omarchowdhury
Yeah, it's something like 270 days now.

~~~
throwaway64
ah the power to unilaterally change terms, knowing your customers have
essentially zero alternative.

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jtheory
Stripe's old approach was quite direct: the CC companies charge us (and don't
refund) for refunded payments and chargebacks, so we pass those on to you.

Quite reasonable, but the new policy is taking advantage of the fact that they
have the rare ability to fix this broken interface instead of just passing it
on.

Refunded fees for refunds encourage easy refunds to dissatisfied customers.
Offering refunds without crazy hoops to jump through is generally just good
customer service (especially for service-related businesses where you don't
have to worry about lost inventory!) -- it can quickly put a problem into a
realistic context (and customers can realize "well, it's not perfect... but
it's actually still worth keeping"), which makes them less frustrated.

I offer a refund _first_ to a lot of tech support questions (i.e., "this isn't
working on my computer"), and hardly anyone actually wants one, but it
comforts them. Knowing that my fees would be lost make it less pleasant for me
to offer... this is psychological pain (the actual cost is minimal), but I
always appreciated PayPal's policy for this reason.

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1123581321
Are customer standards increasing to accommodate this? Will it attract the
wrong kind of customers, resulting in a need to change standards in the
future?

Besides those questions I see this policy as assuring new ecommerce
application builders who aren't used to the risk of chargebacks and refunds. I
really appreciate it.

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marcrosoft
THANK YOU! We moved from Paypal to Stripe this year for the lower rates and
better interface but were bummed to find out that refund fees weren't returned
as they are in Paypal and other payment services.

This change makes Stripe a total win.

~~~
pc86
Don't get me wrong, I love Stripe and despise PayPal, but Stripe is definitely
not cheaper. It is at best the same price, but with high volume of sales is a
decent amount _more_ expensive than PayPal.

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robryan
The tough bit is still getting a chargeback in your favor as a merchant.

Refunded fees are nice, don't want to know how much money we have lost due to
half fee refunds on PayPal.

~~~
cristinacordova
We launched much improved dispute management recently as well, enabling you to
better handle chargebacks: <https://stripe.com/blog/better-dispute-management>

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TamDenholm
Its rare to see an updated policy that isnt filled with dread let alone
something that makes your customers happier.

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newobj
The idea of a flat charge back fee is weird[1]. If I think about a store where
I sell things for $1, it means if I exceed a 7% chargeback rate, my business
is no longer profitable. Is that really all there is to it?

Edit: [1] Not weird as in weird on Stripe's part, but weird as from the
perspective of someone who does not sell online, just seems like this one-
size-fits-all approach probably makes a lot of low-margin selling really hard.

~~~
sachingulaya
7% chargeback rate?

Out of ~2500 orders I've had one chargeback and it was our fault for not
processing the customer's refund sooner. I'm not open to disclose what we sell
but I can promise you that I have some very angry customers.

Maybe you're confusing refunds with chargebacks?

~~~
Osiris
I've experienced a lot of chargebacks, unfortunately. For some reason some
gang of people from Vietnam keeps using my site to verify stolen credit cards
work. Originally this all happened through a third-party service which I had
no control over (I couldn't preemptively block suspicious transactions). I
switched to Swipe and eventually saw the same fraudulent transactions coming
through (one was 50 charges with the same card with a minute of each other).

Sick of it all I finally got minFraud setup and working with Braintree as the
payment processor. So now, I use Braintree to authorize the card, then do a
fraud check through minFraud. If the fraud level is low enough, I submit the
payment for settlement, otherwise I void it.

Since putting minFraud in place I haven't had any chargebacks.

~~~
line
Why not do the minFraud check before auth? Won't that save you some auth fees?

minFraud is a very cost effective service. We have them as one of the
solutions in our platform.

~~~
Osiris
There's no fee for an authorization. That's just the check if the card is
valid. The fee comes from submitting the charge for settlement.

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alinajaf
I will continue to beat this drum whenever Stripe post anything about
anything: Please launch in the UK soon.

~~~
frustratedmike
Yes, I hope they launch in the UK so I can start beating the drum for
Australia.

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ChrisNorstrom
I'll have to rethink my Paypal vs. Stripe decision.

I'm actually setting up a store right now and I'm going with Paypal just
because it's so much easier and cheaper.

With Paypal:

\- After a sale I can buy and print out USPS labels and postage in 2 clicks
and send the tracking and shipping info to my buyer in 1 click.

\- I don't have to pay to integrate it into my site or buy a module ($27), the
Paypal module is already included, and with Paypal I don't need SSL encryption
(which can cost $50+ / year / domain).

 _1 way Stripe can remedy this is to make free Stripe Payment modules for
major e-commerce stores._

I want to move to Stripe eventually because they don't try to get my users to
sign up for a paypal account by hiding the credit card payment form beneath
the paypal login and registration form. And I don't like Paypal's "side with
the buyer even if they're a scammer" policy, not to mention the whole "your
account funds have been frozen for 180 days while we investigate".

5 years from now I really hope Stripe branches out to cover a lot more than
just credit card processing. Once they master that area I'd really love to see
them become a small business e-commerce solutions provider. I'm sticking with
Paypal until I get screwed over and have my funds frozen because in the short
term, I'm saving so much more time and every dollar counts.

Hey Stripe, one day if you work on a store for small businesses I'd love to
chat. The current options (WP E-commerce, shopify, magento, ebay, Amazon,
etc...) are a pain in the ass (I've tried them all) and no one, ==> NO.ONE.
<== , has made a proper packaging backend and USPS shipping calculator that
doesn't screw either the buyer or the seller. Ebay comes close but even they
fail terribly at package dimension calculation for multiple quantities
ordered.

~~~
xal
I'm CEO of Shopify. What's wrong with our USPS Calculator?

~~~
ROFISH
Many many many things, least of which is that it's not programmable. We can't
set items that can go in flat rate boxes. We can't have "Free Shipping*"
shipping, which is free shipping in the US and the equivalent discount in
other countries, and other programmable shipping rates.

~~~
xal
For that you don't even need their rate APIs. All your rates are flatrates
which you can simply set?

APIs for building your own shipping system are actually coming some time next
year but as you said, it's all about free shipping.

~~~
BallinBige
Why does Shopify charge a % off each transaction... when they are not the
payment proccessor or gateway or issuing bank or aggregator??

~~~
xal
we don't. It's capped at $169 a month which is nothing given what Shopify
does. There is a transaction charge on the lower plans but this may change.

~~~
BallinBige
Hi Xal, I'm on your site right now and it says you charge a transaction fee.
<http://imgur.com/eXbZp> \- So essentially I'm getting dinged ~2.9% from
Stripe and another 2% + software fees from Shopify... effective transaction
fee ~5%.

Cant wait till internet tax + state tax takes effect. :)

~~~
dandelany
His point is that you make it seem like there is no choice but to pay a fee.
As your own screenshot shows, this is not the case, the premium plan offered
for $179/mo charges no transaction fee. The cheaper ones do because, duh, they
have to pay their bills one way or the other. The exercise is left to the
reader as to which plan makes the most sense economically for your company
based on the amount of business you're doing. But you're guaranteed to never
be paying more than $179/mo in transaction fees unless you suck at picking the
right plan (and I assume they're easy to switch between).

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latchkey
WePay has had free refunds since the start. I'm also still on their 3.5% flat
rate which is better for my business which generally has <$50 items for sale.

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adambenayoun
I'm a very very happy Stripe customer for some time now. We're operating a
marketplace and Stripe made it really easy for us to charge our customers'
credit cards.

Until then we had to rely on PayPal and that was quite a pain in the ass. The
only thing that was really positive with using PayPal as our CC processor is
that they always reimbursed you the fees in case you wanted to refund the
payment.

We have a 14 day money back guarantee - what it means is that you can request
your money back if you have a valid reason and we'll refund you. Since we want
to really delight our customers (much like Amazon does) we always accept
refund requests and that means we had to cover the costs of the fees paid to
stripe. Granted this isn't much compared to our overall gross revenues but I
can see how in certain cases for certain individual (selling high value
products) that could mean losses.

What I'd like to see tho and I haven't seen it yet - is the ability to get the
chargeback refunded in case I decide not to fight it. I know this usually
involve some work on both sides, however I think this should be automated and
the chargeback lifted if I decide to make Stripe's life easier.

I also understand this could be potentially abused by potentially allowing
every "fraud" attempts to pass and not fighting back the chargeback would mean
you don't have some skin in the game and not motivated to stop these fraud
attempts. Which is why I think these chargebacks should be refunded only if
they don't exceed a certain threshold.

The biggest problem is for marketplace who are selling intangible goods,
whenever we get hit with a chargeback - it doesn't really matter and I usually
don't fight it even if I know the customer really paid for it since I know
they're doomed to fail. So winning a chargeback is out of question anyway,
however I'd love to get my chargebacks covered by Stripe in the event the
chargeback was made by either a legit customer (and for some reason didn't ask
for a refund) or slipped through my fraud prevention tools but I decide not to
fight it back.

If a publisher would see too many of these chargebacks (and thus showing he's
making no effort to prevent fraudulent charges), I think the chargeback
protection should be cancelled and maybe Stripe should charge for these
chargebacks retrospectively.

Anyway - great news Stripe!

~~~
pc86
Sorry, maybe I'm not understanding you correctly, but if you accept a
chargeback why would you get that money back? Isn't that essentially _Stripe_
refunding a customer because that customer says _you_ shouldn't have charged
them in the first place?

~~~
adambenayoun
I'm not asking for my money back but I'm asking for the fee charged for the
chargeback.

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koa
Stripe is awesome, I build a SaaS service where Stripe is the only payment
gateway I support. When convincing my customers(who are all non-tech savvy) to
use Stripe. The biggest push back they bring up is the 7 day wait period for
transfers.

Does anyone know if there is a plan for this 7 day transfer wait period to be
reduced just a bit?

This is the sole reason, why I am eventually planning to integrate with
another option like Braintree even though Stripe has all my use cases well
covered.

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gesman
Some companies just keep doing the damn right thing! Competitors, dodge this!

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Denzel
Sweet! That was one of my main gripes with the old policy: I should not be
charged $15 for a chargeback ruled in my favor. Stripe has finally won me over
fully. Keep up the great work.

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firepoet
You know what I would like to see? Better fees for Micro Payments. Amazon
Payments has exactly the same fees for transactions >= $10 of 2.9% + $0.30
(and has always refunded fees for refunded payments), but adds a much more
reasonable micro payment fee of 5% + $0.05 per transaction < $10.

Check out:

[https://payments.amazon.com/sdui/sdui/helpTab/Checkout-by-
Am...](https://payments.amazon.com/sdui/sdui/helpTab/Checkout-by-
Amazon/Creating-Managing-Your-Account/Amazon-Payments-Fees)

~~~
firepoet
Oh, and the volume discount schedule is MUCH more reasonable on Amazon
Payments (starting at $3k per month vs. Stripe's $1m per year).

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dpeck
Thats great, but I'm a bit doubtful that the chargeback is going to be that
great for any user. Granted the sample size on my side project is small, but
I've never had a chargeback go my way even with logs of ip addresses, email
exchanges, phone numbers, etc.

Absolutely love Stripe though, makes figuring out payment stuff a no brainer.

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tzs
How often can you actually successfully challenge a chargeback for an online
purchase? From what I've seen, the bank usually wants to see a copy of a
receipt signed by the customer. As an online seller of a downloadable product,
we never have anything physical signed by the customer.

~~~
dangrossman
It's really up to whoever reviews the case at the bank. They know there's no
signature for card-not-present transactions, and enough evidence can convince
them to close the chargeback in your favor. I've supplied copies of e-mails
and phone call records from an automated order verification service showing
that the phone # registered to the customer was called and answered after
ordering and had quite a few wins that way.

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tobyjsullivan
And the best game in town just got better. Score!

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sathishmanohar
Nice to see a company updates policy, which actually helps the users. I
haven't seen this kind of policy updates in a long time.

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jordo37
Great job guys - really impressed with where you are and where you are going.

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BUGHUNTER
Does a good stripe-like service exist for Europe today?

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hokua
Hell yeah!! Time to move to stripe.

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negamax
Stripe:Paypal :: Firefox:IE.

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firefox
Stripe FTW!

~~~
oisino
You guys are doing amazing!! Just wish your % cost on transactions was
competitive with some of the big guys.. At a certain processing level I am
forced to work with dinosaurs that take weeks to integrate but in the long run
save me allot of money.. I am sure your high % is temporary cant wait to one
day use your service on all my projects

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melvinram
Super! :)

