[HN Gopher] Cautionary Tale: Stripe force-closed my 9 year account
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Cautionary Tale: Stripe force-closed my 9 year account
After more than 9 years of using them for my SaaS business, Stripe
has decided to close my account for the following reason:
"""Unfortunately, after conducting a further review of your
account, we've confirmed that your business presents a higher level
of risk than we can currently support, so we won't be able to
accept payments for XYZ LLC moving forward.""" This is after I've
made drastic changes that help reduce chargebacks and asked for a
review. I've faded all posts and complaints here against Stripe
thinking that people _must_ be up to no good. And that it can 't
happen to me...
Author : jjoe
Score : 35 points
Date : 2023-08-02 17:30 UTC (5 hours ago)
| jacquesm wrote:
| > This is after I've made drastic changes that help reduce
| chargebacks
|
| You may not have reduced them enough to be eligible for service
| by Stripe. Chargebacks are a really nasty problem and no business
| is large enough for Stripe to risk their own: they are obliged to
| kick you off if you can't stay under a certain chargeback rate.
| The same goes for any other PSP.
| jjoe wrote:
| > You may not have reduced them enough to be eligible for
| service by Stripe
|
| Not really. I made the changes while my account had payouts and
| payments paused by Stripe. I haven't been given the chance to
| show Stripe we take this seriously.
| jacquesm wrote:
| Well, if you _did_ take it seriously then you would have
| reacted _well_ before Stripe paused your account. I 've had a
| business relationship like yours with another PSP (like
| Stripe) for many years and I was watching the CB rate like a
| hawk to make sure we never even got close to being labeled
| 'high risk'. This can be very hard, especially when customers
| engage in soft fraud, where all of the burden is placed on
| the merchant. There are a ton of things you can do to ensure
| that your rates are as low as they can be but even then it
| might simply not be enough. In your case I hope that you will
| be able to push things down to the point where you can
| continue your business and I also hope that Stripe will be
| able to work with you to determine if and if so under what
| conditions you will be able to work with them. But if Stripe
| can't then you have a much larger problem because every other
| PSP will have the same basic criteria and you'll end up with
| really low repute PSPs if you can't satisfy those. Typically
| those are the property of other parties that are unable to
| get normal processing in line so they make their own
| throwaway PSPs that get blown up in due course.
| jjoe wrote:
| The account has been paused for an obvious reason. I made
| it clear from the get-go: it's due to chargebacks. And yes
| it falls on me.
|
| But if any of my long term clients were to genuinely mend
| their ways about whatever issue that affects the
| relationship, I'd definitely give them a second chance.
| jacquesm wrote:
| Here's to hoping then. Regardless of the outcome:
| consider setting up an entirely different payment route,
| one that does not have the the chargeback possibility and
| verify your customers identity by first having them pay a
| small amount (or even their first invoices) until the
| relationship is established.
|
| If you're B2C then that may be a lot harder.
| porkbeer wrote:
| i may be wromg, but I am just going to say whats on everyones
| mind; Seems a bit sus you want to bash a business without
| persuing legal remedy, publiclly, but not disclosing your own
| business.
| runnerup wrote:
| What legal remedies do you think might be available to a Stripe
| customer who is refused service by Stripe?
| porkbeer wrote:
| Also seems like you have been having issues with them a long
| time, your sub from 2014:
| https://news.ycombinator.com/item?id=7160888
| jjoe wrote:
| That post was from Feb 2014. I signed up with them in May
| 2014 (first payment received) according to my dashboard.
| smca wrote:
| Hey Joe--what's your business's domain? I can't find any details
| via your profile other than cachoid.com which doesn't resolve for
| me.
| jjoe wrote:
| Can I send it to you privately?
| smca wrote:
| Why not publicly? But yes: my username@stripe.com. You
| mention something about reducing chargebacks, was your
| chargeback rate high for a particular reason? If so, you know
| we can't support businesses with excessively high chargeback
| rates. If you exceed the chargeback thresholds set by card
| networks, they can place you in a "dispute monitoring
| program" and the fines imposed on businesses can be very
| high.
| jjoe wrote:
| unixy.net
| jjoe wrote:
| I hear you. This is why I've gotten on top of this. I've
| essentially turned Stripe automation off in my system. So
| each and every customer wishing to go with Stripe for
| payment is fraud-checked and dd'ed.
| brianwawok wrote:
| What kind of chargeback rates were you talking to get in
| trouble? 10%? 5%?
| smca wrote:
| Using Visa monitoring program as an example here, high
| dispute rates thresholds are as follows: 0.75% is an
| early warning, 0.9% is standard and can lead to fines,
| 1.8% is excessive. Dispute counts and other signals are
| also taken into account, not just the rate.
| https://stripe.com/docs/disputes/monitoring-programs#vdmp
| brianwawok wrote:
| That's rough when some percent of users will chargeback
| just out of regret for the purchase without even
| contacting the merchant. As a SaaS app on stripe the
| disputes are virtually unwinnable.
| smca wrote:
| I don't disagree--chargebacks can be abused by end-users,
| especially if you don't make it easy to get a refund or
| your communication is lacking. That being said, Stripe
| doesn't own any part of the process, we're an
| intermediary that communicates evidence and outcomes
| between a cardholder and their bank. The same painful
| fraudulent chargeback patterns exist with any PSP.
|
| So, we make it as easy as possible to submit evidence.
| The cardholder's bank decides whether the chargeback is
| won in favor of the business or not. The card networks
| are aware that "friendly fraud" is increasing too, hence
| the introduction of Compelling Evidence 3.0 (more to come
| on this): https://support.stripe.com/questions/how-does-
| stripe-support....
| brianwawok wrote:
| I do like that a lot (CE3). Seems smart.
|
| Is there a way in the stripe dashboard to see my
| chargeback rate? I think I'm closer to .1% than the .75%
| you said is a problem, but hard to know 100% how you are
| calculating it on recurring revenue.
| smca wrote:
| You can see it on https://dashboard.stripe.com/radar or
| if it's easier I prefer adding a `Dispute activity`
| widget to the Dashboard
| (https://snipboard.io/vEamVF.jpg).
| smca wrote:
| I'm happy to take a look at this for you. I also won't
| share any more details on this post unless you want to
| provide them yourself.
|
| I will reiterate that we'd like to grow with any user we
| have (particularly a long-tenured one!). However, we _can
| 't_ support businesses with excessively high chargeback
| rates, no matter what. Keeping chargebacks at an
| acceptable level is a financial obligation for every
| business: https://stripe.com/docs/disputes/monitoring-
| programs.
| ChrisArchitect wrote:
| Tell HN:
| [deleted]
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(page generated 2023-08-02 23:03 UTC)