Comment by segmondy
1 day ago
Your last statement is false. A shady merchant never gets to keep the stolen money. The card issuer/bank refunds you immediately because of consumer protection laws. But that charge is immediately charged to the processor. The processor then gets the merchant involved in a dispute process. If the merchant loses the processor charges the merchant. One way they do it is to immediately deduct it from their current processed transactions. If the merchant is no longer processing, they will usually go try to claw it back from their bank account if they have no held reserves, and if they can't get it, they send the merchant to collection. At the end the merchant must eat the cost or the processor. So in your case, the bank didn't eat the cost. OpenAI certainly ate the cost and the chargeback fees.
You are incorrect.
Chase uses a "provisional credit" system, but for small amounts, this credit often becomes permanent almost instantly.
Wells Fargo utilizes an automated system called the Wells Fargo Dispute Manager which is also similar.
Technically, it is Self-Insurance. Banks set aside a portion of their interchange revenue (the fees they charge merchants for every swipe) into a "Provision for Credit Losses." They use this pool of money to "buy" customer satisfaction for small errors rather than paying an employee $30/hour to investigate a $12 dispute.
And yet I’ve dealt with $15 (and I believe less) chargebacks on more than on occasion. Chargebacks that Stripe charges me $15 even if I win the dispute.
The banks don’t seem to care one bit about and evidence you do provide anyway, I just imagine their dispute system is just “sleep(10 days); return DENIED;”
> Your last statement is false. A shady merchant never gets to keep the stolen money.
Or any merchant for that matter. Chargebacks (from bad actors) are one of the most annoying things when you sell online when you’re a honest legit business. Stripe even charges you a penalty fee on top of that.
This makes me feel good. My gym was one of those places that lured you in with a low monthly price then heavily upsell you on personal trainers. The trainers were fine, but they were fairly inexperienced (usually college kids who took a course and then wanted a summer job or something). And once they found something better they'd leave. Nothing against the trainers, but I prefer to have consistency with my coaches.
Anyway, when I canceled my membership, I realized a few months later they were still charging me for training sessions. I chatted with the manager and apparently I had to cancel those separately. They refused to refund me for the sessions I never took. But they had a kind offer of being able to get training without paying for membership.
Well, I wasn't buying it, so I went on Chase and initiated chargebacks for every session charged after I canceled.
I dunno what happened on their end, but I got my money back. The business is still around, so I guess I didn't hurt them that much, but it's good to know that I probably was at least a hindrance.