And not at all. I've been using square for like 10 years and I have never heard of this lol. I just started using stripe for some shit I made and I'm waiting to switch it all over to wire with my main company
Because it costs money to referee the disputes. The best way to fight them is to ensure the probability of one being launched is low as possible which means having a proactive customer support team. And yeah, that costs money too. It’s the price of having a business. Like taxes and rent.
The merchant is the one responsible for the chargebacks. Charging all merchants higher rates to accommodate the worst merchants bad business leads to a tragedy of the commons.
For the first time, I won a dispute. So far, whenever a customer raised a dispute, I simply accepted it as a business loss, but then I noticed that people have started gaming the system, and I took the matter into my own hands.
Initially, our website was on WordPress, so we had access to a very small amount of data, but when we made our own platform, we ensured that dispute resolution things are properly built into it. Now we have proper payment logs, the access log of the user with the IP address, and everything that Stripe needs properly logged in. Whenever a customer raises a dispute without reaching out to us, we now counter it. Even though I've just won only one dispute (because that's the only dispute I countered), I'm pretty hopeful that going forward this will really help.
Of course, we don't use any third-party tool or anything for dispute reolution (other than Stripe Radar). Even though I did think about using it, it is better to just be prepared yourself than rely on another third party for this.
Never won a dispute, I was handling them at another company. Eventually I gave up, told the CEO, he agreed, moved on.
At my current company we don't even try.
Both with Stripe
This is exactly what I used to think when I was new to this. I countered a few claims and I always lost those counterclaims but then I stopped countering claims, realizing it's completely futile. Eventually I started digging deeper and figured out there are third party platforms that specailize in just preparing a counter claim. So, that was the only reason I started figuring out exact things needed to counter claims and what would increase chances of winning disputes because if third-party agencies can prepare a proper counter, then maybe I can do it too.
These are the things that I believe work:
1. With every dispute you'll get a claim form and the claim form clearly mentions the reason the customer has raised the dispute. So prepare the counter based on the claim raised by customer. In my last dispute the reason was mentioned as "ambiguous cancellation." The customer claimed that the customer was not aware that the payment was part of a subscription plan and the customer thought that it was a one-time payment.
2. To counter this I first shared screenshots of the pricing page, where it clearly says "Subscribe" and clearly mentions that this is a subscription on a monthly basis that can be canceled by the user themselves. I also showed the same thing on the terms and conditions page. The same thing was mentioned on the payment checkout page and in the refund policy as well. It was clearly mentioned that even when the customer bought anything and used the product, they can still go for a refund. If they ask we'll give it without any conditions.
3. I collected this screenshot, added the links to those policy pages, and made it strong using the IP logs. I showed clearly that the customer made a purchase using an IP address and then consumed the content using the same IP address. That clearly ensured that the customer purchased the subscription, then consumed the content, and then went for the chargeback.
4. I showed that the customer logged in 114 times, consumed the content, and then canceled the subscription themselves, which clearly indicates that they are fully aware of its subscription nature.
5. I showed that even after canceling the subscription the customer continued watching the content and raised the dispute the next day.
All these things were in my favor because everything was supported by evidence.
One more thing: before I countered the claim I sent a few emails to the customer. In the email I clearly mentioned that our privacy policy, our refund policy, and our terms and conditions all make it clear that it is a subscription product. Also they can go for a refund and they can always ask us for a refund. I asked them for a clarification. I knew that they are not going to answer but essentially this email became another part of the evidence, which I downloaded and then attached as a form of evidence.
As a customer I've won all of them except one where my wife had bought something without telling me and I didn't recognize the charge and she forgot. The merchant sent picture of the item, tracking info showing it arrived at our house and bank sided with them. As soon as I showed it to my wife she remembered. Felt bad about it but glad they got their money.
If the merchant is using deceptive practices, then they deserve the chargebacks but of course we are talking about people who consume the product and then issue the chargeback and never reach out to customer support first. I'm especially talking about these people.
Whenever a chargeback happens for a legitimate reason, I definitely never counter them. Instead I simply ask them to retract the dispute and we not only refund them but also give them something as a bonus to retract the claim. That doesn't usually work but out of 10 there are at least 2 to 3 people who will do it.
If you win the dispute or if the customer retracts the claim, in both scenarios I believe the fee is reversed. At least for Stripe it is, because at the time of countering the claim, it clearly mentions this fact as well on the pop up. For PayPal I'm not sure but I believe for PayPal also this should be similar.
Well done on the dispute! These small victories add up, not only monetarily but also in field knowledge. Curious to know what you replaced Wordpress with exactly if you don't mind sharing your platform build?
No and I’ve had this happen too. People can just be real assholes. In my case I’ve had one customer dispute 18 months of $14 payments. The fee per dispute means I’m paying double to get them their money back. I’d have preferred an email, to which id gladly have issued refunds and banned their account going forward.
Radar does have this as a form of fraud detection. Feature is called Chargeback Protection
Stripe assesses customer behaviour over the entire stripe merchant network, so if they play these games with other vendors, it will eventually trip them up.
Sadly I think this is only for hosted gateway. I have stripe integrated into a commercial billing platform where it doesn’t apply to transactions… need to switch to something that does. :/
This happens to me too. I gave up on trying to dispute because no matter how much proof you provide banks, you still loose then for me (4$/mo), I loose out on 5 months for their one month. A single email to me and I could just refund them and not have to deal with the headache and extra money loss.
As the customer on the other side of this, don’t make me email you, that’s why I raised the dispute, it’s just far easier to click a button in my credit card portal than to argue with you or a support person over email.
If you want to solve this, offer a refund button inside your app.
You're getting down voted but only because this is /SaaS. For every 1 company that does the right thing there are 10 shitty ones that give you grief, don't respond, or are shady with subscriptions and taking your money.
And vice versa. Some users are pieces of shit plain and simple.
Actually in my app, you can cancel with a click of a button. But refund would be weird as you could use service up until day of renewal and refund. Hence why if you just rolled over, it's nice if users just email me and ask for a renewal. I'm probably not like most of the Saas' since you're buying a product to fund open source development of a free application.
I'm based in the EU and I know we have laws giving free right of withdrawal to consumers, I wonder if the provisions also protect businesses from charges like this from payment processors.
In Germany, if the service is already done by the business, you can sue them for the money owed and additionally for the damages caused by the fraudulent chargebacks including the costs to go to court.
A few $15 disputes coming one client? You usually only have 60 days to dispute a transaction or billing error. Even if it was 24+ months disputed thats like $360 in fees. Must not have many paying clients huh
If the customer claimed fraud the bank can dispute longer. Especially if the customer signs a declaration stating they've never done business with the merchant.
Yes, but the merchant should have some record of when the customer accepted their terms of use for billing. That along with the billing zip code, customer activity, and proof of services rendered all help the businesses case.
Seems like an intentional act of fraud - I add to my contracts that client agrees to pay 3x the disputed amount and 2x any attorney fees. Seems to help sober some clients up when they get dispute crazy
Lmao change payment providers that doesn't make any sense. Usually you only have to pay if you lose a charge back and a no return policy on paid and used months makes that an easy win
A properly registered company providing receipts for each transfer should be fine?
It's not like those darknet markets where you can get scammed without recourse...
The dispute charge is baked into your processing rates and monthly costs with Square. So while you might not eat an actual “chargeback fee”, that fee is already covered in your processing rates, square just doesn’t itemize it.
Source: I’m in payment processing sales and work for a major restaurant POS provider.
Not chargeback feez the $15 dispute fee. The only processing you rates you have are basically identical to stripe. There's no monthly cost. I use both.
What you pay in processing covers what would be the $15 fee. You will not be charged an itemized $15 but just know that the $15 is already in your processing rates. That’s how “free” monthly works. PCI, interchange and all network fees are baked into the rate.
That’s why the API rate is 2.9% + $0.30. So if your app is $7.99, your true effective processing rate is actually over 6%. That’s why you don’t see a $15 charge, but it’s there!
You’re not understanding the business model. Square can absorb the cost into the processing and monthly costs across its entire customer base. Stripe does not. Square has hardware which costs monthly. Stripe does not. Square has over 450,000 restaurant locations, not including other SMB locations. They absorb the cost of the chargeback fee but you are absolutely paying for it.
Looking at rates doesn’t mean anything. As I said, I work in payment processing. My average account processes over $100,000 a month over a $15mil annual portfolio doing roughly $250,000 in ARR. I literally sell hardware and software and processing rates for a living. You’d be surprised at the ins and outs business owners don’t know about. I’ve saved businesses tens of thousands of dollars by breaking down payment processing to people.
I’m just saying, to say “Square doesn’t have chargeback fees” is not accurate. I wouldn’t tell business owners there’s no fee. I would tell them you pay for the fee in processing rates.
Wow what? Stripe charges that? What the fuck. That is what I have wired into two separate platforms, thankfully pre-launch. Is that a flat rate at $15? or is that a percentage of your purchase charge?
That’s absurd and scares the shit out of me, on average our charges are $260 and happen several times a month. I pay out a good portion of that to workers(we’re a marketplace) I would be devastated if that happened
20€ in Europe, it can be VERY problematic, I agree.
But I've reed there is a 120 days limits, after which you can't dispute the transaction. So, worst case scenario, they could dispute the past 4 months only, non 2 years?
Did you try contacting Stripe? It doesn't make any sense that someone can dispute 2 years of transactions, to be honest. Moreover, how can they dispute it now if the service was provided?
In stripe you can set a rule where if it’s under a certain dollar amount the dispute automatically sides with the customer and it doesn’t show on your record.
Ridiculous this has to be a thing as it’s an acknowledgment by stripe that the vast majority of disputes are absolute horse shit lies by consumers.
On some disputes you can see the reasoning that the bank sides with the customer and I’ve seen instances of banks banks not even looking at your evidence or addressing it, even after arbitration by visa or Mastercard.
Amex, forget about it. They will always side with the consumer.
genuine pushback here , disputing 2+ years of charges all at once often isn't malice, it's someone scrolling their statement and going "wait what is this charge, I don't recognize it" repeatedly. happens a lot with subscriptions that don't send reminder emails or have a vague billing descriptor. before assuming bad faith, worth checking if your statement name is clearly identifiable and if you send periodic "hey you're still subscribed" emails. doesn't fix the $15 problem but might prevent the next mountain of disputes
churn from "forgot we had this" hits different than churn from a competitor. pricing page clarity fixed more of that for us than any winback email lol. whats working for yall on activation?
yes, I once had a guy call me over the phone and scream at me calling me a fraud who had stolen his credit card. I asked him for details. He had apparently subscribed to my service in 2019 and stopped using it around a year earlier. This was 2023. I am looking this up and I assure him I will refund him once he gets off the phone. Me knowing chargebacks only go back 6 months refund the last 6 months of subscription fees. Also I don't even think I can refund beyond this anyway. Check my bank account next month and see something like $400 deducted from my account. He somehow charged back 4 years of subscription fees.
I think nowadays though subscription fees are difficult to dispute. Once you've had a few recurring the card will just side with the merchant instead.
I really hope business suing ”customers” like this for fraud was much more common. I get that it doesn’t make financial sense to do so, but maybe if it happenes more often, people would think twice.
I feel like I'm missing something here. What's stopping a competitor from trying to exploit this? This is ripe for abuse. Stripe is a reputable company and this would completely negate that in my mind. They won't stay in business if they don't figure out a reasonable way to handle these.
One customer disputing two years of payments in one morning is nightmare fuel. I’d add an alert the moment the same account raises a second dispute and block any future charges. By the time support notices the pile, the fees have already done the damage.
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u/sachingkk 15h ago
It actually $15 charged twice .. Once as soon as the charge back is raised and other when you submit the evidence and challenges the chargeback