(1) is new, will do that too going forward, makes a lot of sense.
(3) might make sense for subscriptions, doesn't work too well for transactions regretfully.
Hahah yeah, I will (feels a bit cynical but maybe practical) raise all prices by 3-4% to compensate for this cost.
Won't packages increase the risk meaningfully though? It's actually something I've hesitated rolling out because of exactly this risk eg. 5 transactions for 100$ where 1 of them gets a chargeback is a much easier hit to bear than 1 trasaction for 500$ getting the hit?
I guess from a chargeback rate "%" perspective it might be better to have just 1 large chargeback instead of multiple small ones... but then at the same time it also reduces the evidence I can submit to Visa / Mastercard / banks that this person actually made multiple bookings.
We're not something people use day-to-day, I think we're mostly just relevant in the 4-8 weeks someone's preparing for a job interview - so I can imagine people forgetting they used something called "PREPFULLY". After talking to these customers I got the sense they couldn't relate their card transaction to the service itself -- but once I sent an email they immediately remembered what it was. In this context smca's suggestion (4) and (5) could be quite useful - if people either Google Prepfully or if I can remind them of what it was within the transaction description - this could pre-empt a chargeback from those who read it.
Re: those who promised to withdraw - indeed, I don't have any way to know if they did do so. There's one chargeback which I "won" without even submitting evidence, so I think this is probably a clear case of it being withdrawn. There's one which I lost just a few hours ago, which triggered this post.
Re: blacklist - yeah I guess this is one way. Interestingly though, 2 of the customers actually immediately offered to pay again, to compensate for the lost revenue - which was both nice of them, and not aligned with the behavior of a someone dishonest. But it might well be worth it to prevent the risk of hitting the Visa/Mastercard threshold for chargebacks. I have a feeling it would be easy to get around though, if someone has the wrong intent they would probably just use a different email or card. Either way - I'll be pretty regretful about having to do this -- repeat bookers are basically our bread and butter - I discount all candidates' first bookings to super low margins as a conversion tactic (i.e. try out a mock interview to a low price) and even lose money on these sometimes. Which gets compensated by the 60-70% of all these users who end up booking additional sessions at the standard price - which is where Prepfully makes money. But probably not worth the risk of letting someone who has done one chargeback do additional ones.
Re: losses - unfortunately I don't get much information re: why we lost the dispute. Indeed the two things to probably work on are (a) more T&Cs and (b) more logs.
Thanks for the very helpful response! Yep, it's for prepfully.com.
On 1 -- we don't have any subscriptions at the moment - everything is a transaction. We're planning to roll out a subscription/course module at some point next year, so definitely something to incorporate upfront when we do.
On 2 -- we actually send a "you've booked a session" email, 1 email reminder + 1 (opt-in only) whatsapp reminder pre-session, and 1 email 7-days post-session for feedback at the moment. I'm a bit worried about coming across as spammy if we send anything more. However, I don't send a "payment receipt" email at the moment, so that is perhaps something to explore.
On 3 -- all the chargebacks came from quite honest-seeming customers. After talking to them, it did feel like they made an honest mistake. I have a suspicion that some US banks make it incredibly easy to do a chargeback without asking for much evidence (I'm based in the Netherlands, where for instance you need to provide proof that you directly interacted with a merchant), so suggestion (5) in particular might be very relevant here.
On 4 -- super relevant, thanks! If I look at the first result at the moment it's quite misleading (we definitely allow for refunds), whereas what Google has indexed is the piece where we say "we won't issue a refund if you forget to join a session".
On 5 -- good idea too, and very actionable. We don't put anything beyond "PREPFULLY" at the moment. And our transaction IDs are hashes so they don't communicate much information. So maybe even putting something like "interview coaching" -- will have to see what I can fit, could help people remember.
Will also see how we can bolster our T&C. I'm guessing you meant this in context of winning a potential chargeback dispute? I'm not sure if this would actually reduce the total number of chargebacks.
Hi smca - this helps, I was under the impression that Stripe is refunded the fees in scenarios where disputes are won. That seems to have been a misundertanding.
Having said that - I think there was a lot of room for nuance in this rollout, which kinda got shoved up into a one-size-fits-all policy.
I'll give my own business as a reference - I have a 100% chargeback "win" rate; including in cases where Stripe estimated low win success odds. Chargebacks have (so far) come exclusively from bad faith actors.
With this latest iteration - fledgling businesses like mine are massively exposed to competitors making bad-faith bookings and issuing chargebacks against us; which even if we were to successfully defend - would entirely bankrupt us.
Has Stripe explored a mitigation of a scenario such as this?
Following through on the same line of thought - has Stripe considered a more balanced approach where if merchants have a success rate of more than a certain threshold (which by all means can be high) - then they are more "protected" on chargebacks they win? It could be a much better balance in filtering out good vs bad actors on the merchant side.
Potentially also something to pitch to card networks - they will certainly not listen to individual merchants, but if I had to guess - they wouldn't ignore this sort of pitch from Stripe?
And if you were to do so - you would be building loyalty from your "good merchants" by providing a value offering beyond the market; the ones whom are less likely to encounter chargebacks to begin with (and win those they do encounter); since you'll then have a value prop ahead/better than the market. Which just seems like a sound long-game bet.
One person's thoughts etc etc - but the current version of the chargeback fee rollout - while well rationalized, also feels heavy handed and not with the usual finesse/nuance with which I've seen Stripe's usual policy modifications. Thought I'd throw my 2c into the mix.