
Tell HN: Stripe brought my business to a dead stop - southbaybox
I&#x27;m posting this as a warning to other small business who might be thinking of using Stripe to process payments. I own a small boxing gym &amp; we signed up with Stripe based on recommendation of someone I know. At first everything was great - easy on-boarding process, clean interface, etc.. We have been working w&#x2F; them for 4 months &amp; have several hundred payments without a single chargeback.<p>Then out of the blue I received this email:<p>[b]&quot;Our systems recently identified charges that appear to be unauthorized by the customer, meaning that the owner of the card or bank account did not consent to these payments. This unfortunately means that we will no longer be able to accept payments for<p>Refunds on card payments will be issued in 5–7 business days, although they may take longer to appear on the cardholder&#x27;s statement. Please refer to your dashboard for a list of the charges to be refunded[1].&quot;[&#x2F;b]<p>I have NO idea what payments they could possibly be referring to &amp; support doesn&#x27;t respond to my numerous messages. They won&#x27;t tell me which payments are being refunded (dashboard link they provided just sends me to the list of ALL our payments).<p>Worst of all, when I attempted to process a refund for a customer who had been injured &amp; was unable to continue training, I get an error message stating I am unable to process refunds! Am I supposed to tell my customer that my payment process won&#x27;t refund his money? FYI - The payment I am attempting to refund HAS NOT been paid out yet - the money is sitting in my stripe account - but they refuse to refund it or even dignify me with a response.<p>I can&#x27;t express how disappointed I am in Stripe&#x27;s total lack of communication and indifference both it&#x27;s customer&#x27;s and our customers. Big, BIG mistake I made in choosing them as our payment processor - just warning you guys before you make the same mistake
======
vector_spaces
My dad had a similar experience with his non-technical business. Basically
there was a lien on his account, he cleared it up with the other party, but
Stripe continued to hold his balance hostage. Customer support forms and
process led to more black holes or repetitive automated responses. He didn't
have access to his funds for several weeks. I was able to get him a direct
contact at Stripe thru my network.

Horrible experience. I'll still use Stripe for the convenience and hoping that
they improve the situation with these kinds of potentially life shattering
account locks and provide more humane customer service

~~~
Aeolun
If you have a direct contact at Stripe, suddenly you can do things, and things
become possible.

------
southbaybox
Wow - I didn't expect this many responses - seems like I'm not the only one
who's experienced the same issue. Quick answer to some of the comments here:

\- We DO NOT have ridiculous membership commitments w/ auto-renew. Our
membership is month to month (unless you've prepaid for 6 or 12 mos). \- It's
been approx a week since I received the email suspending my account. At first,
I tried to contact support by chat or phone, but it seems that when they
suspend an acct, they block your ability to contact support by any method
except by email...of which I sent approximately 8 with no response. I realize
it hasn't been that long, but we're a small operation - I can't afford
(literally...cannot financially afford it) to let this drag on for weeks or
months w/o a resolution of some sort.

Quick update - After sending an email to Edwin@stripe, I got a response within
the hour. Thank You Edwin. This was the reply:

"Unfortunately, we will only be able to accept payments for xx for a bit
longer. Stripe can only support users with a low risk of customer disputes.
After reviewing your business and account information, we've found that your
business presents a higher level of risk than we're able to work with.

As noted above, your service will not end immediately—we understand that
moving away from Stripe can take time. To help with the transition, we are
able to provide you five additional days (beginning today) to switch to a new
provider. Because of the elevated dispute risk here, your account balance will
be placed on reserve for the next 90 days, the industry-standard period during
which most payments are disputed. During this time, the reserved funds will
help cover any disputes or refunds on your account. The remaining balance will
transfer to your bank account at the end of this period[1]."

Not really telling me anything new - we're not a "high-risk" industry
(according to Stripe's list) and have not had any disputes or chargebacks AT
ALL. Be that as it may... But I still CAN'T REFUND PAYMENTS TO CUSTOMERS!
<sigh>

~~~
whamlastxmas
Stripe really sucks for this and it's discouraged me from using them in the
future. That said, small gyms are likely a high risk business for charge backs
because despite how well you run yours, many of them are predatory or scammy
or generally just awful.

------
edwinwee
I work at Stripe. Could you forward that email to me at edwin@stripe.com and I
can investigate what happened? I'm really sorry for the trouble.

~~~
andrewstuart
This should not be the outcome.

It should not be necessary for someone to come to an online forum and complain
to get the customer support issue resolved.

Stripe customer support organisation should actually resolve customer issues.

Tech companies go on and on and on and ON about "culture", but one thing I can
tell you truly needs to be built into culture is customer support. For
example, everyone knows Google's culture of customer support - it's "avoid all
human contact, send all support queries to a machine".

I think tech companies are super bad at customer support because the founders
have rarely worked front line in customer support so they don't know how to
build an organisation around great customer support thus it is not part of the
culture/company DNA.

Seriously, Hacker News should have a "tech support" link at the top where
people can post tech support queries for companies who can't manage to respond
to and keep their customers supported and happy.

~~~
save_ferris
> I think tech companies are bad at customer service because the founders have
> rarely worked front line

Customer service rep turned engineer here. I think this true, but I also think
that so many founders just don’t care about customer service. Investors are
far more interested in new customer acquisition than retention, so naturally
more resources are going toward customer acquisition.

Customer service is an afterthought cost center that barely pays and
experiences high churn in 90% of the companies I’ve worked for in my career.

~~~
vector_spaces
Yeah, plus customer service is one of those highly manual and error-prone
business processes that are nearly impossible to (properly) automate which are
so annoying to Silicon Valley.

In my experience the Silicon Valley approach to it is to optimize your product
for the 98% of customers who won't need anything more hands on from you, throw
some automation (in the form of documentation, chat bots, and phone menus) at
the remaining 2%, and don't worry too much about anyone who falls through the
cracks past that.

Which can lead to a great experience most of the time unless you're one of
those unlucky leftovers, in which case the ground falls out from beneath you
into a labrynthine Kafkaesque hell proportional in brutality to the size of
the company and the extent to which you depend on it.

------
bprater
Folks have been complaining about Paypal in the same way. You buy yourself
some safety as a company if you separate your payment gateway from your
merchant accounts.

For instance, Authorize.net allows you to bolt on a merchant account, but
retains the tokenization of the customers digits. So if one merchant account
was restricted, a quick phone call to Authorize.net would allow you to switch
over to another ready-to-use merchant account. And you could continue billing
via existing subscriptions.

This is similar to the conversation about domain name hosting. Do you allow
your name host to also be your web host? Or do you diversify to hedge against
getting locked out?

~~~
continuations
Who do you recommend for payment gateway and for merchant accounts?

------
sudhirj
So before Stripe goes the way of Paypal, there seems to be something that can
be done about this. I'm assuming Stripe has enough funds to hire for customer
support, and given that businesses are Stripe's main customers, isn't there a
thorough human review that happens before banning a business?

Plenty of customers sign agreements without understanding what charges they
will incur, and gyms are notorious for this. But Stripe cannot simply shut
down a business without hearing both sides of the story.

If there was a human review in this case, then no amount of HN publicity
should revert the decision. If it does, that would expose the review process
as being heavily flawed.

------
lixtra
Do you mind to add a little more timing information? How many hours/days have
passed since you got the email and since your first answer to stripe?

~~~
the_watcher
Agreed, this information is extremely relevant to anyone looking to use this
story in a decision. I'd also point out that within minutes, a Stripe employee
chimed in here with an offer to help.

~~~
vira28
Talk this with a grain of salt: (not just for this case or company) Employees
offering help after a case reached the first page of HN is worth nothing.

~~~
the_watcher
From what I can tell, it was the _first response_. Stripe employees also
actively chime in on HN threads both positive and negative.

~~~
mynameisvlad
It doesn't matter if it was the first or last response. A person shouldn't
have to post on HN to get proper support. Actually good support would have
resulted in this post not needing to be made.

~~~
sjs382
You're adding a lot of bias, unconscious or otherwise.

"have to" and "need" are strong words that I don't think you're in a position
to use here.

Maybe didn't "have to" and they were just panicking. Maybe this post didn't
"need" to be made.

~~~
mynameisvlad
I'm not in a position to use specific words to form my opinion? Did we get
teleported to a dictatorship that I didn't know about? I can use whatever
words I want to say what I want to say, and I _know_ you're not in a position
to stop me here.

Good customer service means that the issue is dealt within the standard
support pipeline. That clearly failed, based on the wording of the post,
especially mentioning that they received no response from support on the
matter.

The fact that OP got support once they called Stripe out on social media,
while great for OP, is not something to be admired because it means many
people are also likely falling through the cracks and just giving up instead
of reaching out on other channels.

------
tempsy
Hasn't a common criticism of Stripe always been lack of good customer support?
IIRC there are dozens of threads similar to this one on here. This seems to be
another example of that, not necessarily a new revelation.

~~~
sandstrom
We’re using stripe and are overall happy. But their customer support is pretty
bad. Lots of canned replies and ping-pong back and forth until you get someone
to actually read your question.

~~~
tempsy
It's always fine until you have an actual problem...

The issue with Stripe's ethos is that it wants to stay really lean, which
usually means not scaling customer support. If the entire company is 2000, how
many full time support staff do they have? How has the headcount grown with #
merchants onboarded?

This isn't specific to Stripe, by the way. I think Google has the same culture
around support. My Google Pay account has been in a permanently screwed up
state for years and have never been able to reach someone to resolve it. They
just care about operational efficiency above all else.

On the other hand, I actually think Square has a very mature and responsive
support staff. I have gotten what would probably be considered low priority
issues resolved in less than an hour through various channels.

------
spamizbad
I hope this gets addressed. It would really suck if Stripe becomes nothing
more than Paypal with a better API.

~~~
vira28
and in the meantime Braintree (Paypal) will become better than Stripe with a
good support.

------
grippy174
That sucks. But how do we know that you aren't a fraudster? You haven't told
us the name or URL of your business.

There's a lot of incentive for fraudsters to put pressure on payment
processors with fake stories on social media. Their hope is that the processor
re-enables their account so they can continue charging stolen credit card
numbers.

------
Mathnerd314
As far as refunds go is there anything stopping you from giving out cash? Not
to be snarky or anything but the lesson I've taken from these sort of posts is
to always have multiple payment systems set up, like Wikileaks:
[https://shop.wikileaks.org/donate](https://shop.wikileaks.org/donate).

Stripe is really trendy but this site isn't so fond of them:
[https://www.cardpaymentoptions.com/credit-card-
processors/st...](https://www.cardpaymentoptions.com/credit-card-
processors/stripe/). There are hundreds of other providers to choose from. I'm
not sure I'd trust the site's recommendations directly, always do your own
research too, but it's a useful starting point.

------
chaz6
Perhaps one solution to this problem, which is popular in the UK, is set up
child companies to do things like payment processing. If your provider blocks
one company, you can simply set up with another subsidiary. Rinse and repeat.

------
nojvek
It’s the same case as Google and AirBnB. It’s too expensive to have support at
that scale so they skip it.

There is always a risk to go with a big player when you’re small. They don’t
give a shit about you. You barely move the metric.

When you go with a small player, the risk is they may die.

Only a few companies have been able to do support at scale. Amazon comes to
mind being last focused on customer. Microsoft may be second in hand holding
their enterprise customers.

~~~
tzs
There are players between the small players and Stripe, which can get you
decent support with a decent chance they will stay around.

I've extensively used both Merchant e-Solutions and Authorize.Net, both of
which have been around a lot longer than Stripe, and not had trouble getting
support from either. (Also, Authorize.Net is actually owned by Visa, which is
certainly not small).

------
ptxds
This is worrying. We are planning to move to stripe hence I have a few
questions. Were you experiencing any other issues before they did these, for
example, there is a high number of refunds, fees charged etc..? Typically you
are allowed by law to dispute chargebacks.

I learned from previous experience, never have a single payment processor
ever. The best rule of thumb pay the higher fee but diversify.

~~~
tzs
> Typically you are allowed by law to dispute chargebacks.

One caveat. For online businesses it is very hard to dispute most chargebacks.
The card company typically wants you to FAX back a copy of a receipt or
invoice for the charge bearing the customer's signature. That's fine for
businesses like the OP's, which deals with customers in person, but for most
of us who deal with customers via an online shopping cart...nope.

> I learned from previous experience, never have a single payment processor
> ever.

Note that if you are handling recurring payments then in order to have the
flexibility to switch processors you need to either handle credit card storage
yourself, or make sure whatever processor vaulting service you use provides a
way to export the raw numbers in case you want to switch processors, or use
Spreedly or something similar.

We do our own storage where I work. PCI compliance is a bit of work, but it is
not as bad as most people think. (If you transaction volume is high enough to
not be allowed to the the Self-Assessment Questionnaire, then it is probably
as bad as most people think).

Every time it is time to renew the reserved instances at our hosting service
that are involved in card storage and would no longer be needed if we used a
vault at a processor or a service like Spreedly, we've taken a look at the
number of cards we have stored and the transaction volume to figure out the
vaulting costs, and so far it has come out cheaper to continue doing it
ourselves.

Another issue with using a vaulting service is how to handle expiration dates.
The expiration date printed on the card is the date after which the physical
card is not supposed to be accepted, not the date that the number itself
expires. If you have the card on file for authorized recurring payments, you
can continue to charge the account after the physical card expires. But most
gateways will reject a transaction at the gateway if the date you supply is in
the past. Most gateways have some way to tell them you want to go ahead and
try to charge the card even though the expiration date of the physical card is
past. You want to make sure that when using such a card from the vault, you
can still tell the gateway to try it.

Also make sure that vault works with the card updater services. Visa,
MasterCard, and Discover (not sure about AmEx) provide a service whereby a
merchant can provide a list of cards the merchant has on file, and the card
company will tell them which are still good as is, which have new expire dates
but the same number (and give the new date), which have both a new number and
date (and give those to you), and which have had their underlying accounts
closed.

You have to be able to give the updater service full credit card numbers, so
if your cards are in a vault service, you'll have to have the vault service do
the updater querying for you.

------
simonblack
Way, way back I had similar sorts of problems with PayPal.

I was an early adopter of internet commerce but I got my fingers burned
several times when companies made unilateral decisions against me and provided
no simple means of contact between me and them.

I now refuse to use any super-duper payment system that does not have my bank
as a buffer between me and them.

Call me a Luddite if you like. But I feel happier.

------
Ididntdothis
I have heard the same about Paypal. They shut you down without an attempt to
clarify or any kind of explanation. I think that's a warning about a lot of
tech-driven companies. They are great for most people but when something goes
wrong you are SOL because they have saved money by having insufficient
customer service.

------
effingwewt
I just want to point out that from my perspective the fact that this was
flagged, and Stripe magically replied to the post here as opposed to getting
back to them through customer service, on top of the fact they just took on so
much investor money- this just screams Paypal 2.0

~~~
dang
It was flagged by users, but I've taken the flags off. We are careful to
moderate HN less, not more, when the story is about a YC startup:
[https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...](https://hn.algolia.com/?dateRange=all&page=0&prefix=false&query=by%3Adang%20moderate%20less%20"not%20more"%20yc&sort=byDate&type=comment)

That said, people should remember that there are two sides to every story and
account for the fact that the other side isn't available here. That makes me
think there's more going on than meets the eye, especially since the financial
space is regulated and there may be legal or institutional constraints on what
they're able to say. If the issue were simply a failure to do good service,
they would be smart enough to say so and correct it; it would be in their
interest to do so and that's what they've done in the past. So there's
probably additional complexity and we don't know what it is.

------
t0ughcritic
Agreed it’s utter bullshit how they deal with customers getting their banks to
refund them and charge us a fee for it. When most times banks have an
incentive to side with their customer

------
kelvin0
Oh my, I also was about to propose Stripe to a local boxing gym myself. This
gym is also a 'not for profit' company, of which I'm a volunteer (unpaid).

Guess I'll scratch that plan!

------
paulddraper
Weird. You'd at least think you'd get a phone call about something so serious.

Instead it's the ol' support over Hacker News I guess.

~~~
sigstoat
> Weird. You'd at least think you'd get a phone call about something so
> serious.

right? how many accounts are they shutting down every day that somebody can't
pick up a phone?

------
supercarson
Thanks for the article. Could anybody reading this suggest a reliable payment
gateway and merchant service .. thanks!

~~~
privateSFacct
You might want to specify if you will be doing a high risk business such as

* a fitness studio

* recurring memberships

* any type of discount or free trial period.

From stripe's ban list:

"offering substantial rebates or special incentives as an inducement to
purchase products or services;"

From a high risk provider:

"The main reason for the high risk tag is use of the recurring billing model
for memberships. Customers usually give one-time permission up front for the
business to charge them monthly until the customer cancels the membership. If
customers skip over or forget about the terms of the authorization form they
sign, these recurring charges might come as a surprise, leading them to
initiate a chargeback against the business. This is a very common scenario for
free trial models that lead into recurring billing. After a free trial, the
start of an auto payment plan might catch the customer off guard.

There’s also the possibility of “friendly fraud”—when a customer abuses the
chargeback system just to get their money back. Maybe they stopped using the
membership and forgot to cancel. In any case, this can also lead to a
chargeback against the business."

[https://www.bankcardusa.com/health-fitness-merchant-
accounts...](https://www.bankcardusa.com/health-fitness-merchant-accounts/)

If you are going to be doing a business model that is not high risk - none of
those items above are a yes - I would reach out to stripe and get things
cleared up.

~~~
alam2000
How about software SaaS which is charging monthly?

~~~
privateSFacct
Depends on

1) how easy is service to cancel. Put your cancellation link online not behind
a business hours automated phone tree.

2) how trial periods work. Send customer email 3 days in advance to notify
them that billing will begin if they don't take action and amount of bill with
an easy way to cancel if desired.

Some SAAS I think is always high risk, SEO tools, email marketing, adult
services related etc? Someone probably has a better high risk SAAS list.
Basically, can someone uses a stolen card, or even their own card and signup
for this service, spend $10K blasting emails to people, then claim
unauthorized?

------
bojanstef
Actual life hack: Don't email support. Email legal.

~~~
onetimemanytime
I have heard that is some cases it is worse...they assume you'll sue them so
they'll avoid you

~~~
bojanstef
Imagine it from their perspective. There's a higher chance of actually getting
sued if you just ignore them.

------
sarcasmatwork
Following.. I have stripe integrated into one of my apps and so far I really
like it. No probs in the many years working with this company. I'm happy to
see someone from stripe is reaching out.

