But this isn't the product I want.<p>I don't want to ever fight chargebacks. Because my policy is to never take money from people who don't want to give it to me. I want to automatically <i>refund</i> every chargeback attempt without it affecting my ability to charge credit cards.<p>One of my businesses targets consumers, who have this amazing ability to "forget to cancel" or to have "cancelled 3 months ago, but for some reason we're still billing them" or to just plain decide that the last six months of charges were fraudulent and that their bank should get them reversed.<p>All of that is fine with me, and in fact every invoice I send out says as much: We'll happily refund every penny you ever paid us if you simply ask. But lots of people aren't comfortable asking for their money back. They are, however, plenty comfortable asking their <i>bank</i> to ask for their money back.<p>I just want a way to streamline that process that doesn't involve me having to handle fighting disputes that I'd prefer to lose. And of course to not have those lost "disputes" count against me.<p>Any ideas on how to do that, Stripe?
How did you arrive at 0.4%? That seems like a lot to pay for insurance.<p>If they take 2.9% normally, 0.4% is about 14% extra in fees for every transaction you make, but disputes on a legitimate product are probably 1 in 5,000 (and Stripe will charge you a $15 flat fee if you lose the dispute which you will if it was related due to credit card fraud).<p>If you sell 5,000 products at $50 that's $250,000 in revenue. Stripe would normally take 2.9% which is $7,250 but now with "fraud production" they would take 3.3% for $8,250. So you've just spent an extra $1,000 out of pocket to save yourself $15 in a dispute fee that Stripe charges you. That's really steep.<p>If you had 66 fraud charges within 5,000x $50 transactions (to break even on fees), I would really look into why you're getting so many disputes. That's astronomically high.
This is huge! Our business sales registrations to educational events for a specific industry. We use Stripe to process.<p>We have a strict non-refundable policy on ticket deposits because, otherwise, we can't determine how many seats are left for each event and we lose the revenue on that empty seat.<p>We often get unscrupulous customers who claim they don't recognize the charge because they decided not to attend in the 11th hour!<p>We also have the rare individual who completes the entire 3-day training and then claims they never got the service!<p>Because it's in-person training, it's hard to prove they received the service. For example, there are no postal records we might show as proof that we shipped a physical item and it was received.<p>Now, we have them sign a document affirming they got the training prior to receiving their certificates.<p>But, still, Chargebacks are stressful, because they create revenue and profit uncertainty for each event.<p>The dollar value of our fraud rate is about .3-.7% per event. But we always fear the outlier event, where that number spikes. For example, we set aside 2% of revenue from our most recent event (which is thousands of dollars now tied up) to prepare for any unanticipated spike in chargebacks.<p>And... the stress and frustration of fraudulent chargebacks is a non-zero intangible cost.<p>I will gladly pay .4% to get revenue certainty!<p>At this time we don't use checkout though. So will need to look into what we need to do to change to that.<p>I believe we're using Stripe Elements. (I'm the business owner and a programmer, but I didn't code our original stripe integration.)<p>Will be looking at this today!!!<p>Thank you so much for your work on this feature! This is a real game changer for businesses like mine!
Things like this are great for the average to small merchant, BUT if you're processing more than, say, 50,000 USD a month, relying heavily on the Stripe ecosystem can take its toll and can cost you big time.<p>- Use Stripe as the only gateway for all your international traffic, and you will see alarming drops in acceptance rates, meaning the chance of successfully charging a Mexican customer in Mexico with a US Stripe account is much lower than if you have a local acquirer. By a lot!<p>- Rely heavily and blindly on Stripe Radar for post-charge suspected fraud alerts charges, and you will be refunding many valid orders.<p>- If you go all in with Stripe Checkout, you are getting a lot of good stuff at a price. If stripe dynamically uses 3DS to sift potential fraud users, you are going to hurt your conversion rates.<p>Been a big fan of Stripe for a long time, but when order volume goes up, and you grow internationally you have to consider other alternatives and/or backup plans, such as smart routing, local merchants, alert networks (ethoca, verifi), pre-checking for pseudo 3DS charges (no auth need, but fully protected, etc)<p>Not taking into account these 3 things, can drop your conversions by big double digit percentages.<p>EDIT: spelling
I’m the PM on Chargeback Protection. Startups told us they don’t want to deal with the hassle and unpredictability of chargebacks; that’s why we built this. Happy to answer any questions you have.
Don't know if anyone from Stripe is listening here but: it'd be amazing to be able to deploy chargeback protection selectively, as a Radar rule. So that for example we could say: charges from the US are protected (and subject to the extra fee) while charges from the UK are not.
Has anyone done the math on this? You’re paying an extra 0.4% fees per txn which is a lot. So your dispute loss rate would have to be > 0.4% for this to make sense. That seems pretty high. That probably means your overall dispute rate is above 0.6%. In my experience you can get your dispute rate well below 0.1% (effectively a non-issue) by making sure your support channels are working and not clogged, and you have a generous refund policy (and of course being honest about pricing and billing, especially for subscriptions).<p>To me this seems like knowing about a small leak in your basement, but instead of fixing it, you buy a basement water damage insurance policy.
Chargeback insurance/protection is not new in the industry. And despite how nice it sounds to not have to worry about chargebacks, I think it's a bad deal for almost everybody.<p>The basic problem is that your incentives are not aligned with Stripe's: you make money when a good sale goes through, but that's when Stripe might lose money (if the transaction ends up being fraudulent). So they have an incentive to block any marginal orders, which means you lose revenue and suffer reputational harm of blocking good users.<p>Then there's the price: companies with a good fraud protection system / process typically keep chargebacks <0.1%. (For large companies, this means using something like Sift or Accertify along with a fraud review team, for smaller businesses it might just mean manually reviewing every order). So you're paying a lot for the convenience.<p>[Disclaimer: Used to work on fraud protection at Sift]
Used to run an online game, where lots of fraud was going on. People would buy ingame coins or whatever, move them elsewhere and then chargeback. Full protection at just 0.4% would have been a dream for me if I still operated that game.
Interesting - I've been following bolt.com, which seems to guarantee zero chargebacks as well. Given Stripe's scale I now wonder why the value add for Bolt over Stripe is supposed to be now.
Genuine question: how can this make financial sense for Stripe?<p>If Stripe charges 0.4% for it... then presumably any business with chargebacks of <0.4% value won't bother to use it (except for rare cases of needing to reduce risk on extreme low volume of high value items), so mostly only businesses with chargebacks of >0.4% value will use it...<p>...so almost by definition the mean cost will be greater than what Stripe is charging, and Stripe will lose money.<p>Since Stripe is full of smart people... what am I missing here? How is this a viable product?
I just have to point out this little page of caveats: <a href="https://support.stripe.com/questions/payments-that-qualify-for-chargeback-protection" rel="nofollow">https://support.stripe.com/questions/payments-that-qualify-f...</a><p>Biggest thing for our company: "The payment must be submitted to Stripe by your customer via Stripe Checkout. This means that recurring charges are not eligible for Chargeback Protection"<p>Meaning this does not protect our B2C subscription company from any recurring charges which is a huge percentage of our charges if not all of them.<p>Also: "The dispute must be one of the following types of reason codes (as identified by the relevant Card Network) listed in Appendix 1 of the Terms of Service:
Visa: 10.4 Other Fraud - Card Absent Environment
Mastercard: 4837 No Cardholder Authorization
Mastercard: 4840 Fraudulent Processing of Transactions
Discover, Diners Club, JCB: UA01 Fraud Card Not Present Transaction
American Express: FR2 Fraud Full Recourse Program
American Express: FR4 Fraud Full Recourse Agreement
American Express: F29 Fraudulent Transaction - Card Not Present
American Express: 4534 Multiple Records of Charge (ROCs); Card Member denies participation in Charge
American Express: 4540 Card Not Present; Card Member denies participation in Charge"<p>Many of our chargebacks fall outside of these chargeback reasons so it would likely not be worth it for us to use this feature, as I'm sure is the case for many other subscription based companies.
It'd be great to see Stripe adopted by donation platforms for livestreaming like Streamlabs and StreamElements, chargebacks remain an awful abuse vector there.
Congratulations!! Love the philosophy around the product and the dynamic treatment of higher risk transactions with Checkout routing to 3DS.<p>It must feel great to be able to support such a "simple" product, as I know there must be a ton of complexity under the hood enabling the simple form factor.
This appears to require the new Checkout product in order to enable it. What happens if we have a percentage of sales coming from a native iOS or Android app? Are we not allowed to enable protection? Or would just the web transactions be covered?
Does this mean Stripe will change its allowed merchants? We sell digital telecom products and Stripe does not accept our business. This would be a product we could use, but can't if they are still rigid about their accepted business.
Gosh, I’d love to use this for accepting cards for our $29k device, but the limit in the US is $25k in protection for the entire year.<p>We offer a hardware product with SAAS after purchase, and we have dozens of customers insist on paying for that hardware with a credit card (albeit we won’t accept one now because of the inherent risks of accepting a card).<p>If the limit was much higher, I’d be sold, and our volume with Stripe could go up by $1m/year.
Would this cover a marketplace scenario? For instance, we use Connect and transfer a purchase balance to our Connect account users after a purchase is made. If we encounter a chargeback, we also have to come up with the full cost of the item sold to cover the loss because the seller has already been paid. I'm wondering if this new service would cover that scenario.
In France to my knowledge we don’t have a right to chargebacks, the only case when we can be reimbursed is when a fraudulent use of our card is made and we then declare a credit card number theft and the card is blocked. How is the situation in other European countries?
Why limit this to Checkout? Checkout seems limited and resides on Stripe's servers. Who wants to be redirected from a secure website to another domain??? Outside of web savvy people, nobody has ever heard of Stripe.com.
hmm if your chargeback rate is 1% or less, this costs more then a 15 dollar chargeback anyways. at 100 AOV at 1% cback that's 40 dollars to cover what would have been 15 dollar chargeback. also if your description photos and tracking are on point there should be no chargeback you can't win, unless your processes are off.<p>Big agreement on the just refund vs chargeback and effect possible merchant rate increase or suspension. Would rather cut into profits a bit then have headaches of upset merchant.
Any plans to offer this without requiring using Checkout specifically? We use Stripe Elements because it enables a more native seamless payment collection UX.
The chargeback is one of the few tools consumers still have with real power. Sure fraud is still a problem, but it's a really uncomfortable proposition to start making chargebacks an abstracted cost sink for the corporations.<p>Of course the fact that this is an upsell line item means only big businesses will pay for it, the smallest businesses owned by the people just starting out will be the only ones who actually suffer punitively from chargebacks.<p>Some things shouldn't be streamlined. Some pain is good. This is a really unfortunate choice by Stripe.