Comment by MostlyStable
5 days ago
It's important to remember that a chargeback should be considered the nuclear option, and, when using it, one should be comfortable with the possibility that one might never do business with this company again, since it could result in being blacklisted (even if one is, in fact, in the right). I'm not saying not to do it, but one should keep in mind the potential repercussions.
If a business attempts to steal from me I instantly charge back and the onus is on them to prove that I owe them money. I do this all the time and have never been blacklisted.
Some companies like Activision clearly state in their terms that chargeback means you will be permanently banned, no exceptions. You'll lose your account and access to all digital "purchases" forever.
They don't need to prove anything to stop doing business with you.
In the US.
And that's only because when Activision makes a digital "sale" they have no legal obligation to follow through and give you what they promised.
2 replies →
I have a few customers like that. They sign up, forget about it, then they see it on their statement and issue a chargeback. Not only do they get their $20 back (that they very willingly signed up for), but I have to pay another $35 to Stripe for the privilege of having a forgetful customer who couldn't even be bothered to email me for a refund.
> I have to pay another $35 to Stripe for the privilege of having a forgetful customer who couldn't even be bothered to email me for a refund.
I've seen some businesses send a pre-billing email telling customers that they'll be charged on a certain date, so that customers have time to cancel if they want.
Cloudflare does that for domain renewals, sending out emails 30 and 60 days before.
Of course, there are also some businesses that hope that customers forget that they're subscribed, so that there's breakage.
12 replies →
With some of the large companies, blacklisted is a real concern.
eBay is one known example.
I've heard the same for Amazon (forget if it was retail or AWS).
It's cheaper to lose your business than to have a proper human review every complaint.
I've charged back amazon over retail issues that they did not deem worthy of providing me a human to interact with.
It whined about it for a bit on their site but eventually just gave up. Works normal again.
Yeah that kind of seems like antiquated fear-mongering. Next they should call the BBB and leave a strongly-worded review!
You joke but I got bbb involved with a scammy business insurance company that is easy to sign up for but you can't cancel or stop renewal or change billing info. Company has an infinite hold line and never responds to anything. Filed a complaint on BBB and it was responded to next business day.
wait, int the BBB just boomer yelp?
1 reply →
I don't think it's helpful to think about this as the company "trying to steal from you". There is no intention here. It's just something that got lost in a bad IT system. You gain nothing from issuing a chargeback. You imperceptibly nudge some statistic and a "banned for life" flag might automatically get flipped in a database. There's no righteous comeuppance here.
You try to contact support, pester them a bit, call someone if possible, and eventually, you may get your money back. If you don't, then you issue the chargeback.
> There is no intention here.
You don’t think it’s funny how the mechanism for taking the money is never broken?
Work with a large company who won’t pay your 30 or 45 day invoice for 90 days before you broadly decide this.
3 replies →
waiting for month for a refund (and having lost access to the pro plan immediately but no immediate refund) is definite grounds for chargeback.
there is no human on the other end of the chain, and I bet that chargebacks are how they issue refunds (ie relying on the "nuclear" option as the standard practice of how refunds fundamentally works at their company.
ie "don't need to answer emails about refunds, because if they really wanted their money back, they'd issue a chargeback" as part of the regular procedure.
a lot of companies do this, and it's a common way of minimizing customer support budgets.
Unless you're big cheese, too many disputes can get a company cut off. Disputes aren't free to mediate, there's a cost to handle each one.
Visa/MC can block a company, happens for lots of reasons.
The more people use chargebacks to get around black hole customer service the better, because it is difficult for companies to blacklist everyone. If they don't want to pay the mediation fee, they should provide customer service in the first place.
3 replies →
This is, yes you were robbed, but what if you want to partner with the bandit later?
They'll just rob you in your future interactions too.
But what if the robber becomes a monopoly and you have to partner with them in the future? Who's gonna save you? Government?
Then you get to enjoy mandatory robbery.
So the Anthropic company would blacklist you for taking your money back by force that they owe you?
Ok sounds like evil should be labeled and not tolerated as anything else.
More like, you don't sue a vendor and then expect the relationship to go back to status quo ante.
A chargeback is essentially binding arbitration and it can be existentially costly for small businesses, especially those unable effectively to advocate for themselves in a fairly complex and little-known process. Excess chargeback initiations - even of failed chargebacks - will also get acquirer accounts closed, meaning the business formerly a client of that acquirer can now no longer accept credit cards. (Modern acquirers like Stripe also do this, because the card issuers and payment networks will eventually cut them off if they don't: Stripe is not "too big to fail" according to Visa, which is why you may not sell sex or porn via Stripe.)
Anthropic doesn't need to care, of course. No one is going to fire them as a customer over excess chargebacks, and a hundred such fees are still cheaper than one hire. Anthropic has a burn rate. Chargebacks impinge much more heavily on businesses that need to earn money selling goods or services. It's important not to confuse one with the other.
> More like, you don't sue a vendor and then expect the relationship to go back to status quo ante.
Depends on the specific relationship between the parties and the nature of the lawsuit.
If I sue Walmart, the only grocer in my town, for mislabelling the weight of their ground beef, we (as a society/government) probably shouldn't allow Walmart to retaliate by banning me from their stores.
1 reply →
I always wondered about this. Do companies tie the credit card to an identity to block or do they just block the cc number?
If the latter, seems like a small friction point for a consumer. Given how often cc numbers change and how many an (American) consumer has, this won’t block anything unless you are charging back more than once every few months.
It's up to the company, but since many companies don't want to keep card numbers around (and some processors don't let you see the card number anyway), they're probably more likely to block on identity. Maybe flag the IP address of the transaction for "additional screening" on all future transactions, etc.
IPs are notoriously unreliable for identity pinning, particularly in this age of CGNAT.
If they can’t or don’t want cc numbers (makes sense considering how painful PCI guidelines are anyway) does that mean they need to rely on more tools from the processors or user accounts maintained by the merchant themselves?
CC numbers are also bound to get recycled eventually as cards expire and/or get replaced... even if you block a card, it might have a new owner 6 months or so later.
3 replies →
Except the banks have "helpfully" provided a service to merchants to tell them, "this card has expired, here is the new number to charge" (or expiry/CVV).
I remember getting into an argument with a bank teller about me wanting to block/dispute transactions and how they kept approving transactions. "But you have an agreement with the gym..." That's between me and the gym, not for you to facilitate on their behalf.
Obnoxiously that doesn't cover all the edge cases for consumers. Payments from my watch recently started failing with a generic "declined" error. After calling my bank I worked out that my credit card had been replaced some months ago in advance of a recent expiry - I updated my phone wallet at the time, but my watch's wallet didn't give any indication that it was trying to use an expired card.
It's also important to remember that chargebacks aren't under our control. As cardholders, we can't issue them directly.
All we can do is submit a dispute to the bank. The bank will then investigate (however they do that), and eventually act (in whatever way they choose -- which may include a chargeback).
It may seem pedantic, but it's an important detail. Chargebacks are ugly. They constitute red flags on merchant accounts, and with enough of those red flags their own rates are affected (or worse).
Nobody wants chargebacks. Banks don't want them (they take time, and therefore money, to deal with). Vendors certainly don't want them. And consumers don't want them, either -- they just want to be made financially whole, however that happens.
---
I had a problem once with a local record store where I got charged twice for one purchase. I loved that store very much (I grew up buying my music there), and at no point did I think that they would ever deliberately rip anyone off. But somehow after repeated phone calls and at least one visit, nobody I talked was able to either fix the problem or hand it over to someone who could.
So, in desperation: I called the bank and asked for help. I told them what had happened, and what I'd tried to do to resolve it, and they told me I could file a dispute and they would investigate. So that's what I did.
The next afternoon, I got a phone call from the store's very apologetic bookkeeper. He informed me that he'd received a call from my bank, and that he'd fixed the problem by refunding both of the charges, asked if that made me satisfied, apologized profusely again, and thanked me for my business.
That was a little bit above-and-beyond on the humbleness scale, but whatever. My problem was more than fixed and my fondness for the business was completely restored.
---
Anyway, back to the point about being pedantic with nomenclature: All I did was file a dispute, all the bank did was make a phone call to the right person, and all the vendor did was fix the problem.
No chargeback took place.
The fact that the record store could have easily handled your issue, but chose not to (and chose to not empower any of their employees to) until a bank got involved, should give a clue about what kind of company they actually were.
Yeah, good point.
I'll just forget about the fact that I'd spent thousands of dollars there over the course of decades, and they knew what I liked and would order inventory hoping that I'd buy it, and hold onto some of the tchotchke when it was time to take down some release date posters and put up new, just in case I wanted to take some, and I still kept giving them money until they eventually closed their doors forever because the owner was old and the building got ruined in a flood.
You're right. None of that was important. I'll just focus on that one incident when the kid at the counter of a record store couldn't figure out a financial problem on their own. That's all I need to know about the place. Those fuckin' scumbags!
Thank you very much. Your insight is very rewarding to me.