Even in HN comments I've seen people saying they use temporary card numbers (valid for one transaction only) or click a button to dispute instead of a single email. That button in the banking interface might be "block future payments" or such. They must've bad experience with companies in the past?
Actively emailing with the customer sometimes helps. It worked for us. Sometimes it didn't. For example if it's a company credit card and the employee left the company. Their accounting team simply doesn't know what our service is for.
At this point the fees are part of "cost of doing business".
https://news.ycombinator.com/item?id=44382686 is an example where a customer was unhappy about merchant charges and seems to contact the banks only, not the merchant.
Ever used a gym, airline, or subscribed to a newspaper? Many businesses are genuinely customer-hostile.
Depending on your country / ticket, you have a 24 hour cooling off period, easy to call phone numbers, self serve web platforms and apps, very well documented processes and procedures.
Most of the worst airlines have some of these things, because if they didn't, they wouldn't be allowed to operate in certain regions (Canada/US, EU)
They finally reached out asking why. I told them we hadn’t even shown our faces there for months. But the following month they charged me again, and again I charged it back. This cycle repeated a couple more times.
The bank would still be the one dealing with chargeback and chargeback related costs, I do not see why Apple would care or get involved.
However, I wonder if the biometric verification of Apple Pay merits a different response to chargebacks where the bank will not simply take the buyer’s side.
.. to the user. What do they charge the vendor, or it just the 30% of every transaction (which some might consider ridiculous).
edit: comment below reminds us that unhappy customers can get you banned entirely https://news.ycombinator.com/item?id=45248686
So the $43 thingy is more like at least $3000 + (43$ per 1 in 100) and (2$ + %3) per + handling VAT remittence per + handling local laws per(which means you will likely need a few more highly specialized employees or services that you pay hefty cuts approaching Apple).
Taking money from people anywhere in the world in exchange for your product or service is trivial on Apple because they indeed employ a lot of people that deal with this stuff, thus %30 is fair IMHO.
Life is hard enough and I have enough things to do that actually require energy and focus, and I refuse to spend any of it trying to convince you that don’t need your SaaS product.
Customers don't want to "reach out" if it means hunting deep in their account settings to find the cancel button, or calling a number which may or may not lead them through an endless phone tree to waste 5 minutes talking with someone on the retention team reading from a script.
People don't remember they signed up.
They can't remember how to log in from a different device to cancel.
It's easier to use their credit card app to dispute the charge.
The company name is different than the product name - even a slight difference may indicate a scam, like all of these highway toll scams using a slightly different domain name.
A worker or family member signed up using someone else's card, and that person has no idea what the charge is for.
People expected one thing from your SaaS product, and got something else that they are not willing to pay for.
They rarely check or read their email.
Your account reminders are going straight to spam.
The communications around the product, pricing, or requirements was lacking.
When I click that button, the recurring payment is automatically canceled, and the SaaS company can check that and know that I unsubscribed. Or something along these lines.
There is already a power-asymmetry between consumers and companies. This should not extend to unsubscribing. Here, the consumer should have all the power.
Chargeback is easy because it's under the card co's control. Deep link would require knowing the cancel page of every sub, plus handling auth factors. API connection would two way integration, with scoped auth between every bank and every service. Hopefully managed by an SI or aggregator, but the business model sounds hard (the bank doesn't mind the chargeback, the SaaS doesn't want the cancelation, so who pays?)
I'd be happy to just have the ability to easily ask the credit card company block further payments with no actual notification to the business besides that the monthly charges stop going through. If you want to be fancy about it, creat a custom industry standard declination reason for that use case.
This already exists. Mastercard (and Visa?) has an API that lets banks notify subscriptions when your card changes to update the card number https://developer.mastercard.com/product/automatic-billing-u...
What I'm talking about is an official way to unsubscribe. One that the user fully controls, and is free of dark patterns.
If this is the way it works and the result are chargebacks it just means things cost more in general (cost of business will be factored in).
It's not a good thing.
I’ve shared examples in the article.
What a world we would be if companies didn't want to bill customers that don't use their product. Imagine if companies automatically paused billing if you stopped using their product? Panacea.
Apple is a hugely greedy company, but it's one thing I like about subscribing to things in there -- I can cancel at any time with minimal effort.
But recently I asked for a refund from a very popular project management system, and it was a nightmare, an absolutely terrible experience. After that, I gained a new level of respect for our own support team ))
> we also provide a simple, self-service way to cancel the subscription
It's hard to comment without seeing screenshots and description of the process. When people are cancelling under a perceived threat (will be charged otherwise), any inconvenience will become an extreme one.
As for cancellation, the problem is that even though it’s easy to cancel a subscription, chargebacks usually happen afterwards. It doesn’t matter how simple cancellation is, what matters is that the user first cancel and then still goes and files a chargeback.
I'm talking about additional email. 24 hours before the transaction. With the subject "You'll be charged $10 for renewal in 24 hours".
This email will hit a lot harder. Most people's inbox is full of transactional email, as per recent post here on HN.
-- sigh unfortunately it's the opposite in 3rd world countries like Indonesia. I've had my cards physically stolen on the airplane. Despite having all the evidence and common sense ("I'm in city X airport and the disputed transactions happened in city Y, you're saying I went there immediately after landing and return to the airport just to queue for immigration, all in an hour?"), none of the banks accepted my chargebacks that I filed few hours after incident.
The banks are Bank Mega (national, private), BNI (state-owned) and DBS.
Is your cancellation mechanism consumer friendly? You don't do proration when people cancel and say you only "meet them halfway" when they go through the effort of requesting a refund in response to this user hostile policy.
There are a lot of very user unfriendly policies and implementations. Sometimes companies that legitimately try to do the right thing get caught in the blowback, but more commonly, companies aren't as user friendly as they like to pretend and have adopted at least some of the pervasive dark patterns.
Your post says about $10 charge, I am not sure how it happened with current flow.
Be very direct about the pricing, and please use your own product so customers are not confused.
In the post I mentioned that we build several products. I didn’t want to list them all, because I always feel a bit awkward about self-promotion. My goal with the post was to spark a dialogue, not to advertise.
RE pricing page: yes, we do state that there’s a minimum of 5 seats. But there are no chargebacks here, since we don’t take a card upfront and we don’t bill in a hidden way. In the worst case, if you missed or didn’t read that detail, you can simply decline and not subscribe after the trial. You’ll see the price in Stripe before giving us your card. And if you prefer, you can stay on the free plan for up to 5 ppl.
This is a dark pattern. You should display the actual minimum monthly charge in text that is at least as large as the price per user.
No, the worst case is the customer gets the $10 price into their head and then doesn't see the actual monthly charge amount when they subscribe. You are now charging the customer 5x what they expected to pay.
> What’s really going on here?
Reality. You need to prove something: that the card holder made the purchase to the standard the banks set and you can't. It's as simple as that.
> Why do banks completely ignore the terms customers agreed to when they subscribed or in cases where they’re clearly making false claims?
Because your agreement with the customer is not the only agreement in play. You accepted these chargebacks and that process when you accepted credit cards.
> And why aren’t customers required to provide any proof at all?
You can't prove a negative. I can't prove I didn't authorize payment. And, because it's online, you can't prove I did. "logs, screens, terms, full context" are not proof. None of that is useful or proof in any way that the card holder made the purchase.
> What actually prevents someone from using a SaaS product, filing chargebacks every time they cancel their subscription, and essentially getting refunded for the last several months of usage?
Credit card number limitations. Why would you accept a payment from the same credit card number again? Also, repeat offenders can be blocked by payment providers. This is the way a lot of online stores work.
> Would love to hear your thoughts.
A few more points...
> "The Madness of SaaS Chargebacks"
It's not SaaS chargebacks. It's just chargebacks.
> The worst part is that it doesn’t matter whether you win or lose a dispute — the very fact that it was filed still counts against your account.
Yes. The reason it counts is because you are problematic, or at least attract problematic customers. This ends up costing the banks money. I'm sorry, but if you had a problematic customer that cost more money than you made from them, you'd probably stop working with them, too.
> Still, we always submit evidence.
Not the evidence that matters. You need evidence that the card holder authorized the payment. I promise you, nothing you submitted proves that.
> Inside the product, we also provide a simple, self-service way to cancel the subscription without any questions asked.
Do you ask for the username and password? Right... and if I didn't sign up for the service to begin with, I didn't agree to the TOS.
Let's also address one more thing:
Facts:
> Charge was processed August 12 (regular billing cycle). > Subscription canceled August 18 (6 days later). > Dispute created August 19. > The claim is false.
Nope. The problem is when the person requested the subscription be cancelled. Not when your system recognized it.
> the customer doesn’t have to prove anything
The problem is when a customer requests you cancel their subscription, and you say you will, and you don't do it until 6 days later.=
The problem is when a customer goes to request to have their subscription cancelled, and your service is broken and doesn't recognize the cancellation and they don't realize it never cancelled until 6 days later.
I can keep going.
Let's try this: prove to me the customer didn't submit a request to cancel the subscription when they said they did.
That's right, you can't prove a negative.
I can keep going on, but you can find lots of information on this and why it is the way it is. If you don't want to deal with this, there are other options that eliminate or reduce the chance of chargebacks. But you won't find those as popular. Because they aren't customer friendly.
evermike•2h ago
A $10 payment ended up costing us $43.95 recently. Banks almost always side with the cardholder, and the only reliable “win” I’ve seen is when the customer withdraws the dispute themselves.
So here’s my question to the community:
What’s really going on here? Why do banks completely ignore the terms customers agreed to when they subscribed, or even in cases where the claims are obviously false? And why aren’t customers required to provide any proof at all?
What actually prevents someone from using a SaaS product, filing chargebacks every time they cancel, and essentially getting refunded for the last several months of usage?
Would love to hear your thoughts.
csomar•2h ago
evermike•1h ago
When I look at some other companies, I often see all kinds of "shady" tricks that clearly boost revenue, but also inevitably increase the number of cases like this.
giveita•1h ago
evermike•1h ago
But this is a slightly different story. With chargebacks, almost every time it was just a customer not wanting to admit fault. What’s strange is that they could have simply written to us and asked for a refund. But I guess they realized they were in the wrong, so instead of contacting us, they went straight to their bank.
giveita•1h ago
evermike•1h ago
giveita•1h ago
whatevaa•1h ago
arcbyte•1h ago
Your SaaS is a dime a dozen to them. They dont care about you. You dont make them any money, especially when the customer is actively trying to stop doing business with you.
blibble•1h ago
they have a banking relationship with their client, and none whatsoever with you
if they decline the chargeback they then take on a load of risk (they might lose their client, they might get reported to the regulator, they might be sued by their client and then stuck with the bill)
but if they just pass it on then you take all the pain
not surprising at all given the structure of how credit card payments work
msh•1h ago
Illniyar•54m ago
Card-not-present (I.E. internet transaction) has a lot more merchant fraud then friendly fraud (what we call these cases) and the incentives for both merchants and banks is to make sure the customer never loses trust in the system. If people were afraid to use their cards on the internet everyone loses.
It doesn't make sense for both the merchants and the banks to arbitrate every 10$ transaction. I doubt your case even reached a human, or if it did they even gave it a minute of thought - you are just someone who does not know the rules to them.
Now if a customer abuses the chargeback mechanism, he'll have is card revoked, probably be blacklisted and his life would be an insane amount of complicated from now on. But you'll never see these cases. Be sure that if someone could abuse the chargeback mechanism to the extent you mentioned, the system would be unusable, the fact you get chargebacks only rarely is a testemant that there is policing going on at the bank side.
It's just not 100%. Like Patio11 says - the optimal amount of fraud is non-zero[1]
If you have a large chargeback (let's say 1000$ and more) you might actually get someone to review it, and there's a slight chance you'll win if the case is good. But the system is not geared for that.
It's geared towards you amortizing the cost of chargeback into your price - and eventually the people who pay it is always the customer, not the merchant.
[1] - https://www.bitsaboutmoney.com/archive/optimal-amount-of-fra...
evermike•50m ago