4 ms·

How do you handle the part of chargebacks that currently validly apply to authorized non-fraudulent transactions, like services/product not delivered or not as

How do you handle the part of chargebacks that currently validly apply to authorized non-fraudulent transactions, like services/product not delivered or not as described, or accidental double charges from vendors like random taxi drivers with whom you don't have a way to arrange a refund?

anonzzzies 2y ago
mediation/arbitration It already works like that here (eu) for debit cards (which most people have; very few have credit cards although they don't know the difference). Double charges from taxi drivers is not possible as it's tapping or dipping your card and you are there for that (we are assuming some system that prevents someone stealing your card like biometrics or whatnot); products not as delivered is responsibility for the seller to refund/replace and in other cases you go through a process of mediation. I had it once in my life, which is now 50 years. It sounds like Americans willy-nilly chargeback whatever because they can (fries were not hot or cold enough): seems not very good for the fees. Most people who travel have creditcards here and the most ones I know have no idea they can chargeback or ever needed it.
- jkaplowitz 2y ago
  > Double charges from taxi drivers is not possible as it's tapping or dipping your card and you are there for that (we are assuming some system that prevents someone stealing your card like biometrics or whatnot) You'd be surprised - at least in the public transit context with iOS Express Mode, double Apple Pay taps by transit systems have absolutely been recorded plenty of times. I admit I haven't heard about this in the taxi situation, but unless the technical problem is specific to Express Mode and not general to tap-to-pay, I don't know why it wouldn't ever happen. > products not as delivered is responsibility for the seller to refund/replace and in other cases you go through a process of mediation. This assumes the seller is willing to do their job or go through the process of mediation, and/or that the buyer has sufficient legal insurance or available cash to cover the up-front cost of lawyers plus any related expenses plus the possible attorney's fees of the other side if the court decides against them. Even in the EU, this is far from always true, especially for low-price purchases or when dealing with foreign online merchants who are more likely to ignore EU lawsuits or mediation attempts than to cooperate. Of course, trying to resolve things with the seller is always the right first step, and that's the usual approach even in the US. It's just great to be able to have the leverage of the chargeback option as extra incentive for the merchant to be reasonable. (By the way - the chargeback right is not unconditional even when the reason claimed is one of the allowed reasons. The merchant can dispute it and can sometimes win depending on the circumstances, the evidence, and the bank.) > It sounds like Americans willy-nilly chargeback whatever because they can (fries were not hot or cold enough) To be honest, no, the idea that chargebacks are something Americans rush to do is a stereotype and not true. They're pretty rare when neither the buyer nor the seller is doing something shady, but having the option to charge back is pretty important in order to make US single-factor (no-pin / no app-based verification / no meaningful signature verification) credit cards secure enough for customers to rely on, especially for online purchases from random small merchants who can't be relied upon. And "fries were not hot or cold enough" would pretty much never be a valid reason for a chargeback, since usually a specific temperature isn't promised before purchase. > seems not very good for the fees It definitely affects the fees, but honestly, a bigger impact is that the US does not cap what fees credit card issuers can charge the merchants, so the fees are much higher than the typical EU consumer card regardless of chargebacks. Some of that is of course kept by the banks as profit, but much of it is returned to customers as reward points, cash back, or other perks. It's among the reasons why I continue to use my US credit card as my primary form of payment even here in Germany. Zero foreign transaction or currency conversion fees, great perks. (This card does require a decent US credit history and has an annual transaction fee, but I get enough value out of it to outweigh that fee.) How many chargebacks have I done in my entire life for a reason other than actual fraudulent / unauthorized transactions? Probably under 5, maybe 1-2 at most. Plus most of the fraudulent transactions were noticed proactively by the bank rather than me having to bring it up to them. Because it's a true credit card and not a debit card, I never had to pay for those fraudulent transactions.
  - anonzzzies 2y ago
    > To be honest, no, the idea that chargebacks are common in the US is a stereotype and not true. The thing is, even here on HN (where I expect, maybe not warranted, the level to be higher), people seem to absolutely proud and entitled to chargeback whatever for whatever reason. Those are almost 100% Americans (I check) and that is where I got the idea; this sentiment is much higher on tiktok, youtube, reddit etc. I even saw some shorts of people screwing merchants with chargeback like it is some batch of honour.
    - Nextgrid 2y ago
      There's nothing wrong with using a right the card networks explicitly provide you. Even here on HN I see a huge tendency to play fast and loose with access to customer money, and corporation-on-consumer fraud has been normalized and is treated as no big deal. Chargebacks are a normal and expected reaction to that. I'm sure chargeback abuse is a thing, but in aggregate, I'd argue people are still not doing enough chargebacks, because businesses are still engaging in unethical (& potentially illegal) practices of billing customers for services not rendered, or unclear pricing, or dark patterns. Dark patterns with regards to payment should be a big no-no, and the fact they're still around suggests this behavior isn't being punished enough. So we should in fact have more chargebacks, until the situation becomes that it's more profitable to play fair and legal than try dirty tricks. Unlimited, no-confirmation access to pull money just based on a static card number is a bug to begin with - ideally every money movement would be authorized on the spot or preauthorized in advance up to a limit. But assuming we do have this bug, it seems like merchants are happily abusing it - "free" trials that are impossible to cancel, unexpected charges buried in 50 pages of T&C, etc. Chargeback is a completely normal reaction to this and I recommend it to everyone. The heuristic I use is simple: did I expect this charge, and would I have agreed to pay for it had I been asked for upfront? If not, the merchant gets a quick email, and if they're not cooperating, taking unreasonable time to action it or are outright unreachable they're eating a chargeback and it'll be up to them & their processor to argue it further. They are welcome to put their processor/acquirer person on hold for hours (like they would do me if I were to play their game) and see how that works out for them.
- Nextgrid 2y ago
  Keep in mind that card disputes are a thing even for debit cards. Credit cards may have higher protections by law that force the lender to eat the disputed amount regardless of the dispute's outcome, but the actual process of disputing a transaction is applicable to all cards - I've successfully done chargebacks on debit cards here in the UK.
  - anonzzzies 2y ago
    I have done so too, but it is less automatic than on (some?) credit cards it seems. Lengthy processes and such.
Nextgrid 2y ago
My point is that this would become optional and the cardholder chooses whether to opt-in (and pay an extra fee) at the time of payment. If the cardholder doesn't opt-in then the payment is as good as cash (with the same recourse available as if you paid cash). This could allow low/no-fee transactions for low-stakes situations where the chargeback protection wasn't going to be used anyway.
- jkaplowitz 2y ago
  Ah, you're proposing to remove US credit card customers' statutory right to those chargebacks except if they opt into a surcharge on a per-transaction basis.
  - Nextgrid 2y ago
    Yes, essentially moving the transaction fee the merchant pays to the consumer. This means they can choose whether they want the additional protections those fees currently pay for.

anonzzzies 2y ago

mediation/arbitration It already works like that here (eu) for debit cards (which most people have; very few have credit cards although they don't know the difference). Double charges from taxi drivers is not possible as it's tapping or dipping your card and you are there for that (we are assuming some system that prevents someone stealing your card like biometrics or whatnot); products not as delivered is responsibility for the seller to refund/replace and in other cases you go through a process of mediation. I had it once in my life, which is now 50 years. It sounds like Americans willy-nilly chargeback whatever because they can (fries were not hot or cold enough): seems not very good for the fees. Most people who travel have creditcards here and the most ones I know have no idea they can chargeback or ever needed it.

jkaplowitz 2y ago
> Double charges from taxi drivers is not possible as it's tapping or dipping your card and you are there for that (we are assuming some system that prevents someone stealing your card like biometrics or whatnot) You'd be surprised - at least in the public transit context with iOS Express Mode, double Apple Pay taps by transit systems have absolutely been recorded plenty of times. I admit I haven't heard about this in the taxi situation, but unless the technical problem is specific to Express Mode and not general to tap-to-pay, I don't know why it wouldn't ever happen. > products not as delivered is responsibility for the seller to refund/replace and in other cases you go through a process of mediation. This assumes the seller is willing to do their job or go through the process of mediation, and/or that the buyer has sufficient legal insurance or available cash to cover the up-front cost of lawyers plus any related expenses plus the possible attorney's fees of the other side if the court decides against them. Even in the EU, this is far from always true, especially for low-price purchases or when dealing with foreign online merchants who are more likely to ignore EU lawsuits or mediation attempts than to cooperate. Of course, trying to resolve things with the seller is always the right first step, and that's the usual approach even in the US. It's just great to be able to have the leverage of the chargeback option as extra incentive for the merchant to be reasonable. (By the way - the chargeback right is not unconditional even when the reason claimed is one of the allowed reasons. The merchant can dispute it and can sometimes win depending on the circumstances, the evidence, and the bank.) > It sounds like Americans willy-nilly chargeback whatever because they can (fries were not hot or cold enough) To be honest, no, the idea that chargebacks are something Americans rush to do is a stereotype and not true. They're pretty rare when neither the buyer nor the seller is doing something shady, but having the option to charge back is pretty important in order to make US single-factor (no-pin / no app-based verification / no meaningful signature verification) credit cards secure enough for customers to rely on, especially for online purchases from random small merchants who can't be relied upon. And "fries were not hot or cold enough" would pretty much never be a valid reason for a chargeback, since usually a specific temperature isn't promised before purchase. > seems not very good for the fees It definitely affects the fees, but honestly, a bigger impact is that the US does not cap what fees credit card issuers can charge the merchants, so the fees are much higher than the typical EU consumer card regardless of chargebacks. Some of that is of course kept by the banks as profit, but much of it is returned to customers as reward points, cash back, or other perks. It's among the reasons why I continue to use my US credit card as my primary form of payment even here in Germany. Zero foreign transaction or currency conversion fees, great perks. (This card does require a decent US credit history and has an annual transaction fee, but I get enough value out of it to outweigh that fee.) How many chargebacks have I done in my entire life for a reason other than actual fraudulent / unauthorized transactions? Probably under 5, maybe 1-2 at most. Plus most of the fraudulent transactions were noticed proactively by the bank rather than me having to bring it up to them. Because it's a true credit card and not a debit card, I never had to pay for those fraudulent transactions.
- anonzzzies 2y ago
  > To be honest, no, the idea that chargebacks are common in the US is a stereotype and not true. The thing is, even here on HN (where I expect, maybe not warranted, the level to be higher), people seem to absolutely proud and entitled to chargeback whatever for whatever reason. Those are almost 100% Americans (I check) and that is where I got the idea; this sentiment is much higher on tiktok, youtube, reddit etc. I even saw some shorts of people screwing merchants with chargeback like it is some batch of honour.
  - Nextgrid 2y ago
    There's nothing wrong with using a right the card networks explicitly provide you. Even here on HN I see a huge tendency to play fast and loose with access to customer money, and corporation-on-consumer fraud has been normalized and is treated as no big deal. Chargebacks are a normal and expected reaction to that. I'm sure chargeback abuse is a thing, but in aggregate, I'd argue people are still not doing enough chargebacks, because businesses are still engaging in unethical (& potentially illegal) practices of billing customers for services not rendered, or unclear pricing, or dark patterns. Dark patterns with regards to payment should be a big no-no, and the fact they're still around suggests this behavior isn't being punished enough. So we should in fact have more chargebacks, until the situation becomes that it's more profitable to play fair and legal than try dirty tricks. Unlimited, no-confirmation access to pull money just based on a static card number is a bug to begin with - ideally every money movement would be authorized on the spot or preauthorized in advance up to a limit. But assuming we do have this bug, it seems like merchants are happily abusing it - "free" trials that are impossible to cancel, unexpected charges buried in 50 pages of T&C, etc. Chargeback is a completely normal reaction to this and I recommend it to everyone. The heuristic I use is simple: did I expect this charge, and would I have agreed to pay for it had I been asked for upfront? If not, the merchant gets a quick email, and if they're not cooperating, taking unreasonable time to action it or are outright unreachable they're eating a chargeback and it'll be up to them & their processor to argue it further. They are welcome to put their processor/acquirer person on hold for hours (like they would do me if I were to play their game) and see how that works out for them.
Nextgrid 2y ago
Keep in mind that card disputes are a thing even for debit cards. Credit cards may have higher protections by law that force the lender to eat the disputed amount regardless of the dispute's outcome, but the actual process of disputing a transaction is applicable to all cards - I've successfully done chargebacks on debit cards here in the UK.
- anonzzzies 2y ago
  I have done so too, but it is less automatic than on (some?) credit cards it seems. Lengthy processes and such.

Nextgrid 2y ago

My point is that this would become optional and the cardholder chooses whether to opt-in (and pay an extra fee) at the time of payment. If the cardholder doesn't opt-in then the payment is as good as cash (with the same recourse available as if you paid cash). This could allow low/no-fee transactions for low-stakes situations where the chargeback protection wasn't going to be used anyway.

jkaplowitz 2y ago
Ah, you're proposing to remove US credit card customers' statutory right to those chargebacks except if they opt into a surcharge on a per-transaction basis.
- Nextgrid 2y ago
  Yes, essentially moving the transaction fee the merchant pays to the consumer. This means they can choose whether they want the additional protections those fees currently pay for.