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by xpose2000 2567 days ago
So, .4% fee for $10,000 in sales amounts to $40. And losing one chargeback dispute costs you $15, plus time and effort to fill it in and submit it. Not to sound cynical, but odds are you will probably lose it anyways because the customer didn't feel like paying anymore.

Am I missing something? The chargeback protection fee doesn't sound terrible
2 comments
jliptzin 2567 days ago
Yes I do lose most disputes regardless of what the situation is, and I did forget about the $15 fee. I guess it really depends on the type of business, will probably make sense for some, but as a consumer I do see a lot of small businesses out there that should be looking first at how to get their chargeback rate low enough that they don’t need something like this in the first place.
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penagwin 2567 days ago
I believe it's happened before where people have setup bot accounts to buy game licenses from indie developers, just to resell the keys on G2A/Kinguin. However they do it with stolen credit cards, so the indie developers get hit with a 15$ charge PER order. If there's 1,000 keys, that's 15,000$ in chargeback fees.

So it might be reverse, it might be a no brainer to accept this extra protection because like you said, 40$ fee @10,000 isn't that big of a deal, given only 3 chargeback fees are necessary to break even. Unless you can REALLY manage your chargebacks. If your product costs 20$, so 500 people buy it, you only need a .6% chargeback rate before you should've taken the extra protection.

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unreal37 2567 days ago
And as a poster above says, he'd sign up for this for "revenue certainty".

Would you rather make $10,000-$20,000, or make $17,000? For some, they'd take the sure $17K over the possibility of making less and losing money after cost of goods sold are taken into account.

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maratc 2567 days ago
Are you assuming that the cost of the disputed transaction - the goods that were sent to the customer and supposedly not coming back - is $0?

For $10,000 of sales of one's music $40 does not sound terrible. For $10,000 of sales of high-end watches $40 to have the reimbursement is a helluva great deal.

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