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Comment by anurag | Hacker News Reader

(I work at Stripe). I agree that our chargeback management tools are far from perfect, and we're working to improve them. We introduced PDF evidence uploads last year (unfortunately too late to help in this case), and we're currently exploring ways to make illegitimate chargebacks a non-issue for all our users. We're also constantly fine-tuning our fraud detection systems which also helps reduce chargebacks across the board.

If you have thoughts on how we can improve this process further, we'd really appreciate hearing from you. Email me at anurag@stripe.com.

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What is Stripe's recommendation for SaaS companies wanting to prevent chargebacks?

For example, I sign up for Basecamp and pay monthly, then x months later I issue a charge back and win. What is your recommendation to prevent situations like that?

The best course of action to prevent chargebacks is to make it ridiculously easy for customers to get in touch with you about refunds and other customer service issues. If the refund process is quicker and easier than issuing a chargeback, your users will be a lot less likely to try the latter.

If you do receive chargebacks, I'd recommend keeping extensive records that you can later upload as a PDF file as part of the dispute process.

Things like:

- IP addresses, logins, usernames and other proof that the customer used the product.

- User correspondence acknowledging the purchase.

- All invoices sent to the user.

- Emails or other documentation displaying cardholder consent for the transaction.

While it isn't always easy to win disputes for SaaS business, submitting comprehensive evidence in your dispute response significantly improves your chances.

Thank you for the advice!

From my understanding 3D secure would go a long way to help protect against chargebacks. Why not make it optional?

https://support.stripe.com/questions/does-stripe-support-3d-...

That would only help if the customer had enrolled in it (since it's completely optional). It just makes it more difficult for customers to contest fraud transactions, so why would anyone enroll?

From my understanding is that it lets the customer's bank see exactly who's making the payment and gives them a chance to deny it. The merchant is then protected from fraudulent chargebacks and these are covered by the bank.

Essentially, they get to perform their own fraud prevention and it's a way of trying to improve confidence in online payments.

I believe the idea that it takes away rights from the customer is a misconception (I also think most of these protections are given by law).

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