Part 2 of Stripe shutting me down and kicking me in the teeth

[rhid1985]

My first post was here:

https://www.reddit.com/r/stripe/comments/qlm8xs/account_shutting_down_in_4_days_after_7_months

Last night, we received notice that Stripe is holding onto all of my funds till Feb 2nd due to a large amount of chargebacks. This is an absolute lie.

Our chargebacks for all time is at 0.08% (132 disputes out of 167k transactions.

Last 3 months is 0.06% (51 disputes out of 80,872 transactions).

Last 4 weeks is 0.05% (12 disputes out of 24,433 transactions).

Last 7 days is 0.02% (1 dispute out of 4,727 transactions).

They said their threshold is ONE PERCENT. We're at 1/12th of that at our all time dispute percentage.

Stripe, I am begging you to stop abusing the little guy. You are hurting families. You are hurting real people.

 

[broadlandbeliever]

@rhid1985 We moved away from stripe a few months ago for just this reason. We had -= 1 =- chargeback EVER on a $50 charge and do about $30k/mo in charges total. We've been with them for years. They sent us a nasty gram on the chargeback which we disputed but we were well under the 1%. A few months later they said they would be holding 25% of our money in an escrow for two months due to us not reducing our chargebacks .. which was 1. It had to be some kind of mistake so we reached out, and nope. Fuck that. We dropped them and just went with our bank's payment processor who had the same rates. Jokes on them though, we have dozens of clients with ecommerce and guess who is getting the boot?

I'm pretty sure it's just a money grab from stripe as it's really difficult to move away from them due to credit cards being on file. We were able to and any new eccomerce that gets set up is either authorize net or square. We were a huge stripe fan prior to this and ecommerce aside sent them 100s of people.

Chat started: 2021-07-22 01:56 PM UTC

(01:56:08 PM) (------------): Question on dispute email

(01:56:17 PM) *** Tammy M joined the chat ***

(01:56:36 PM) Tammy M: Hello there, how are you today?

(01:57:04 PM) Tammy M: I see that you have a question on a dispute email, I will be more than happy to help you with this.

(01:59:32 PM) (------------): Hi Tammy, I'm a little upset right now...I got an email stating you guys are going to hold 25% of future payments on our account due to dispute risk. We have only had 1 chargeback in all the years of doing business with you, and it was an existing customer (and still a customer) that had the wrong card on file and instead of contacting us he just filed a dispute. One single "chargeback" for 50 bucks, and we have recurring customers for the last 5+ years with $16,000 charges with zero issues. Im not sure if I can have our account manually reviewed to remove this flag?

(02:04:03 PM) Tammy M: I am sorry that you have to deal with this. I know disputes cause so much unnecessary hassle. However, I will be more than happy to look into this for you.

(02:05:33 PM) (------------): if disputes were due to fraud and we had a bunch of em yes, we aren't in that business, we had ONE dispute from an customer that is still a customer, and yes if you can look into that i'd appreciate it. if they won't remove the flag I will switch our payments to my banks processor

(02:07:48 PM) Tammy M: I really do understand where you are coming from here. Let me see what I can do for you on this. I will be just one moment.

(02:09:10 PM) (------------): Thank you

(02:11:31 PM) Tammy M: Which account is this for?

(02:12:41 PM) (------------): ----------

(02:13:20 PM) Tammy M: Thank you!

(02:13:32 PM) (------------): The legal name in the portal is -----------

(02:16:03 PM) Tammy M: Thank you. I am going to have to send this over to one of our specialist to look at for you. Would you mind if I switch this over to email and have someone contact you back from there?

(02:17:16 PM) (------------): that would be fine, thank you very much

(02:19:32 PM) Tammy M: It is definitely my pleasure! I wish you the best on this. Someone will be contacting you back at ------------

I also hope you have an amazing rest of the day!

Thank you for chatting in.

--------------------------------

Hi there ---,

Thank you so much for reaching back to us, I hope you have a lovely day!

I understand that you are concern regarding us hold 25% of future payments on your account due to dispute risk and I would be more than happy to shed some light on this for you.

Upon further review, I am afraid that this is a routine 60 day reserve to ensure that the your account will have the necessary funds to cover any future disputes or refunds, we're not penalising you in any way, just helping your business in case of any future instances.

It will last for 60 days and at the end of this, any held funds will be returned to your balance and paid out.

I hope that clarifies your concern. Please feel free to write back in case you need further assistance, as we continue to strive in providing excellent care to our users.

All the best,

Vid

 

[scarfo]

@broadlandbeliever what the actual fuck

 

[idontknow]

@scarfo This isn't just a Stripe or even a payment processor issue...Gusto, which my company uses to reimburse independently purchased insurance, has been holding onto insurance premiums instead of dispensing them for 4 months now, and their automated system rejects any reimbursement requests with unhelpful and usually bullshit messages. All these companies make money of off float and it's in their best interests to fuck everyone over and hold onto as much money for as long as they can.

 

[rhid1985]

@broadlandbeliever I loved stripe due to Radar. It doesn't seem like any other processor has a system close. Do you have any experience in the risk management part?

 

[broadlandbeliever]

@rhid1985 Authorize.net has afds, but we dont really worry too much about it as we have contracts for anyone we charge. I'm not involved with our ecommerce clients beyond doing the hardware and coding, but I'll ask for you.

 

[rom837]

@broadlandbeliever We use Authorize.net for our estore and I have had ZERO chargebacks on it since we switched to them about 4 years ago.

I do have one guy doing a chargeback on his order but it was on the card he uses for Paypal, and it can take 75 days for it to work through Paypal to his bank and back to Paypal and back to us. So we are disabling Paypal for large $ amounts, special orders, custom builds.

 

[rhid1985]

@broadlandbeliever Tyvm

 

[picnic_00]

@broadlandbeliever holy bananas!

 

[emotionlesstruth]

@broadlandbeliever That customer is stupid as fuck. I hope you said something

 

[613jono]

@rhid1985 That is total BS. In these situations I take the attitude this is my money, F you, I am getting and getting it as fast as possible.

That is a lot of transactions. I would get quotes from three other merchant processors - in this situation I would actually look for quotes that come in with slightly higher fees than Strip intentionally. Then just start calling Stripe and try and get through to customer retention. Tell them you found a few processors that are not giving you the same rate as Strip but that holding your funds is a problem.

Once you have a direct email or contact at Strip just keep hounding them. Be aggressive and if they don't play then spend $200 and get your lawyer to write them a threatening letter.

I would also encourage you to submit a complaint to the FTC's bureau of consumer protection.

 

[pbev]

@613jono Not sure how this works in the US, but in Norway our equivalent of the Bureau of consumer protection has nothing to say in disputes between businesses, as it is for consumers, not businesses

 

[613jono]

@rhid1985 Reading all these threads: sounds like stripe is trying to improve their financials to go public...

 

[boog]

@613jono I can't say that you're wrong, but how does losing good customers with hundreds of thousands of transactions (which is how Stripe makes money) and a 0.08% chargeback rate improve their financials?

 

[bmh3d]

@rhid1985 With over 200,000 transactions you're hardly a "little guy".

You need a real commercial bank and a real credit card processor.

 

[rhid1985]

@bmh3d Does someone like

https://protecmerchantsolutions.com/

Work? These all seem the same to me and I'm having a hard time finding a correct one.

 

[cassuk11]

@rhid1985 Disclaimer that I worked in seller risk for a merchant processor VERY similar to Stripe. It could be a network rule thing. Meaning, Chargebacks (CBs) are calculated on a volume and dollar basis overall and on a network level. So let's say 1% of Mastercard is charged back, then it is a violation, same with Visa, etc. So if you have that data, separate your CBs by network (Visa, MC, Discover, Amex) and re-calculate your CB rates that way. There is also a $ threshold, I forget the number, but I think it is > $10k over 60 days (also by network)...something like this.

Also, they consider the type of CB (unauth vs merchandise claim). Not sure what kind of business you are in, but if they are mostly merchandise claims (not as described or Item not received), then this points to the merchant as being not-so-great at customer service or have difficult customer service policies to resolve item disputes (like a no returns policy or take too long to ship or take too long to respond to customers or unclear resolution processes, etc), which makes you a "bad player in the payments ecosystem" (not saying you are, just saying how a merchant processor would rate your risk level).

Merchant industry also plays a large role, if you are in an industry that has high return/disputes rates (like clothing or shoes) you probably have more leniency, for example. But if you are in an industry that has very low CB rates and yours are higher than average for your industry type, this is another red flag.

When you switch processors they will ask for your prior merchant statements so be prepared for that and start the process now as it can take some time.

 

[doctrine]

@rhid1985 Hate stripe. We hit 1.1% in disputes on a volume of 700 charges this year. So like 7 or 8 credit card disputes over 700 customers and they hold 25% of our revenue, what crap. Of all the disputes only 1 was valid, the others were people trying to get free service.

They’re sticky, it’s tough to switch. I won’t ever use them again

 

[rhid1985]

@doctrine We went through that with them when we first signed up. They had over 300k of our money held up for 3 months. It was insane.

 

[leslia]

@rhid1985 You asked in your other thread if Square were any better. My perspective is from the UK so regulations are probably quite different.

I stopped using Stripe because Square offered me better deal almost a year ago. I'm pleased with their service at the moment there was a significant hiccup early on.

The sign up process to Square included a customised transaction fee based on the business relying on infrequent large transactions. Almost immediately after we started taking payments they froze our account saying regulations required them to investigate larger payments and they needed me to send exactly the same information they gathered during sign up. They said it could be frozen indefinitely, but typically investigations take a few days to a few weeks before releasing finds. This could have sunk my business. In the end it was resolved in only 2 days.

I complained to them that they already had the info to prevent them from freezing my money. They only responded to say it was automated and it's tough shit. I suspect that's a common feature of the fintech outfits; humans only get involved by exception. I hope you get through to someone who can help.