| 6.5% chargeback rate. This entire blog post reads like other posts of its type from people who don't understand credit card processing or how it all works. "Shortly after sending the above information we discovered that the specific charges flagged as fraudulent were not fraudulent charges. They were, in fact, due to chargebacks related to a recently acquired eCommerce store where fulfillment was lagging heavily during the transition which led to some dissatisfied customers who opted to dispute charges." No, the transactions weren't fraudulent. However, selling something and not delivering is grounds for a chargeback and would be labeled as fraud, and to any reasonable person, would be considered fraud. "Somehow we moved from an issue of fraudulent activity to whether or not we’re allowed to sell specific products." Yes, because with such a high chargeback rate, they are going to reevaluate your entire business. It's called Know Your Customer (KYC), and it's critical. But seriously, 6.5% chargeback rate. Even when I was still working in an industry know to be high risk, I never had a rate that high. "Stripe is quick to put all blame and responsibility on us by claiming that it is not their responsibility to prevent fraud." Because in the end, yes, that's where the fault lies. Don't believe me? Go to a bank and get your own merchant account and see what happens when you just let whatever you want go through your system. Just because it's on a computer doesn't change the fact that you are responsible for the fraud you are swiping through your system. tl;dr: a legit 6.5% chargeback rate. |
It only takes a little bit of reading between the lines to see the author bought a site that sold fraudulent gear, didn’t realise this for a bit and then shut it down.
If stripe hadn’t frozen payouts they would be stuck holding the bag for 44 percent of the total charges in the account.
The new account thing does sound beuracratic but I guess it restarts the KYC process.