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Stripe does refund their fees with a transaction refund. I understand this may be novel for the payment processing industry though.

codegeek 6y ago
No stripe doesn't. They used to but not for a while now. At least not for our SAAS business where we do close to 1M ARR. Am I missing something ? https://stripe.com/docs/refunds https://stripe.com/docs/refunds
- Cerium 6y ago
  Same here, they used to but stopped about a year ago.
  - mattferderer 6y ago
    Ditto. Helping some non-profits, we were really hurt by people typo-ing a $10,000 donation when they meant to only donate $100. We quickly learned from that mistake. We also learned about how credit card thieves test credit cards. We saw hundreds of donation attempts. Stripe had us refund those that went threw, which costed us money in fees. Fortunately we were able to put some quick measures in place to stop them temporarily & then better measures for long term success.
    - 42droids 6y ago
      I am curious what measures did you put in place?
      - slivanes 6y ago
        A common way to prevent that is to authorize only first - settle/charge that payment at a later time when you think it's not a typo.
      - mattferderer 6y ago
        The credit card tests had unique network patterns we could block. We lowered our online donation limit. Above a certain amount it really is more ideal for a check or some other type of transaction. Though we've had a few people offer to just pay the 3% transaction fee on top of the multiple thousand dollar donation. For those we do a bit more manual process. For a cost, Stripe also lets you put some additional rules on what type of payments you'll allow & how much info the person has to verify for the payment to be accepted.
        42droids 6y ago
        Thank you. It all makes sense. Did you end up using Stripe Radar to check for fraudulent payments? It is working well?
        mattferderer 6y ago
        Yes & yes but your mileage may vary depending on your customers/donors. For example, we turned off transactions from several countries. Honestly a basic version of this should be free. I shouldn't have to pay extra to say I only accept cards with a CVC number & expiration filled out.
        42droids 6y ago
        I agree with this. I am a bit frustrated with Stripe for making this a paid service given the cost of payment processing. However, I assume when the fraudulent transactions cause a loss you have to pay for Radar.
        jjeaff 6y ago
        We actually raised our minimum online donation limit to avoid issues with those processors. They apparently look for set your own donation sites so they can try to authorize $1 test payments. We changed to a $10 minimum and they seemed to have stopped.
fasicle 6y ago
Is this true? From their docs [1]: "There are no fees to refund a charge, but the fees from the original charge aren’t returned." [1] https://stripe.com/docs/refunds https://stripe.com/docs/refunds
thoraway1010 6y ago
That's awesome! However, it WILL result in stripe attracting a LOT of the crappy billers (ie, folks who mislead / make customer unhappy etc). If your business is < 1% refunds, no worry if fees stay. A fair number of business have just 1 or 2 refunds PER YEAR. Other business obviously have MUCH higher refund rates (sneaky autobill businesses etc). For these loosing 5% on the refunds matters if they have a lot of refunds, so they'll be very tempted by no costs if you autobill and get caught. They'll just autorenew everyone, autosign up and then be VERY good about refunds to avoid chargebacks. Even if just 30% of customers don't catch a few months you end up with real money. Of course, CUSTOMERS may hate these players, but stripe I guess is focused on what works for the businesses generating lots of refunds.
- ben509 6y ago
  Having a disincentive for merchants to have many refunds makes a lot of sense. The reasonable thing to do is to ramp up the fees based on the number of refunds. You want to push away the crappy billers, but not hammer developers that have the occasional bad release.
astura 6y ago
Not anymore
seancoleman 6y ago
I guess it's been a long time since I've been personally responsible for the financial side of Stripe accounts. I think it was 5 years ago when I used to run a lot of test transactions and refund for net $0, but times change. Sorry to lead anyone astray.
balls187 6y ago
That is not accurate. Stripe does not refund us the fees.

codegeek 6y ago

No stripe doesn't. They used to but not for a while now. At least not for our SAAS business where we do close to 1M ARR. Am I missing something ? https://stripe.com/docs/refunds https://stripe.com/docs/refunds

Cerium 6y ago
Same here, they used to but stopped about a year ago.
- mattferderer 6y ago
  Ditto. Helping some non-profits, we were really hurt by people typo-ing a $10,000 donation when they meant to only donate $100. We quickly learned from that mistake. We also learned about how credit card thieves test credit cards. We saw hundreds of donation attempts. Stripe had us refund those that went threw, which costed us money in fees. Fortunately we were able to put some quick measures in place to stop them temporarily & then better measures for long term success.
  - 42droids 6y ago
    I am curious what measures did you put in place?
    - slivanes 6y ago
      A common way to prevent that is to authorize only first - settle/charge that payment at a later time when you think it's not a typo.
    - mattferderer 6y ago
      The credit card tests had unique network patterns we could block. We lowered our online donation limit. Above a certain amount it really is more ideal for a check or some other type of transaction. Though we've had a few people offer to just pay the 3% transaction fee on top of the multiple thousand dollar donation. For those we do a bit more manual process. For a cost, Stripe also lets you put some additional rules on what type of payments you'll allow & how much info the person has to verify for the payment to be accepted.
      - 42droids 6y ago
        Thank you. It all makes sense. Did you end up using Stripe Radar to check for fraudulent payments? It is working well?
        mattferderer 6y ago
        Yes & yes but your mileage may vary depending on your customers/donors. For example, we turned off transactions from several countries. Honestly a basic version of this should be free. I shouldn't have to pay extra to say I only accept cards with a CVC number & expiration filled out.
        42droids 6y ago
        I agree with this. I am a bit frustrated with Stripe for making this a paid service given the cost of payment processing. However, I assume when the fraudulent transactions cause a loss you have to pay for Radar.
      - jjeaff 6y ago
        We actually raised our minimum online donation limit to avoid issues with those processors. They apparently look for set your own donation sites so they can try to authorize $1 test payments. We changed to a $10 minimum and they seemed to have stopped.

fasicle 6y ago

Is this true? From their docs [1]: "There are no fees to refund a charge, but the fees from the original charge aren’t returned." [1] https://stripe.com/docs/refunds https://stripe.com/docs/refunds

thoraway1010 6y ago

That's awesome! However, it WILL result in stripe attracting a LOT of the crappy billers (ie, folks who mislead / make customer unhappy etc). If your business is < 1% refunds, no worry if fees stay. A fair number of business have just 1 or 2 refunds PER YEAR. Other business obviously have MUCH higher refund rates (sneaky autobill businesses etc). For these loosing 5% on the refunds matters if they have a lot of refunds, so they'll be very tempted by no costs if you autobill and get caught. They'll just autorenew everyone, autosign up and then be VERY good about refunds to avoid chargebacks. Even if just 30% of customers don't catch a few months you end up with real money. Of course, CUSTOMERS may hate these players, but stripe I guess is focused on what works for the businesses generating lots of refunds.

ben509 6y ago
Having a disincentive for merchants to have many refunds makes a lot of sense. The reasonable thing to do is to ramp up the fees based on the number of refunds. You want to push away the crappy billers, but not hammer developers that have the occasional bad release.

astura 6y ago

Not anymore

seancoleman 6y ago

I guess it's been a long time since I've been personally responsible for the financial side of Stripe accounts. I think it was 5 years ago when I used to run a lot of test transactions and refund for net $0, but times change. Sorry to lead anyone astray.

balls187 6y ago

That is not accurate. Stripe does not refund us the fees.