[cdmoyer]

The OP later clarified that it wasn't a normal transaction. They sold a "cheap company van" using their stripe business account. That seems like a huge liability, since a used car seems extremely likely to cause a chargeback. I don't think dealerships would accept a credit card payment (other than deposit) for this reason.

https://www.reddit.com/r/smallbusiness/comments/wa1zob/dont_...

[SyneRyder]

And one of the comments below that one explains exactly why this is a problem:

"When you sign up for your Stripe account, you had to state what business you were using it for. If you're doing business with your Stripe account that is not related to what you sign up for, then there are reasons why Stripe is now holding your money."

It's listed in Stripe's terms and conditions on Prohibited Items:

"Use of Stripe products to facilitate transactions on behalf of another undisclosed merchant or for products/services that were not disclosed in the merchant's Stripe account application."

https://stripe.com/en-au/legal/restricted-businesses

[notinfuriated]

Makes sense why this would raise a red flag, but it does not explain why Stripe supposedly had extremely shitty customer service where he can't get talk to a person and get this resolved in less than a week or two (let alone 120 days that is actually arbitrarily indefinite).

[x0x0]

I'd bet $20 he's been repeatedly told this, and his definition of "can't talk to a human" is "can't talk to a human that agrees with whatever demands he's making".

From the reddit post, the demand appears to be to not hold the money for 120 days, and there's no reason for Stripe to agree to that. He also appears upset that Stripe reviewed his company docs after he violated his agreement with Stripe by selling a car, rather than the cellphones he told Stripe he sold.

[Crosseye_Jack]

Most 2nd hand car sales in the US are sold "As-is", so the buyer has very little recurse after the fact. The consensus is when it comes to 2nd hand vehicle sales is buyer beware and you should be taking the vehicle to be checked over by another garage before finalising the purchase.

Last car I purchased (granted a) it was brand new b) I'm in the UK) I purchased the car using my debit card (I kept the recept for ages until it faded cause it was novel to me to have such a large card transaction on a small thermal printed receipt :-P)

So I'm just wondering why a 2nd hand vehicle sale would be a huge liability thats all.

[stetrain]

The issue is that the credit card company doesn’t necessarily run through a full legal analysis of the seller’s rights in a transaction when the buyer requests a chargeback.

Of course it may eventually all get settled in the seller’s favor in court, but in the meantime the buyer has their vehicle and their money back and it’s on the seller to track them down and sue.

So people tend to do person-to-person used vehicle purchases in cash-equivalents (cash, cashier’s check, etc) so that there’s no worry about the money disappearing after the buyer drives over the horizon.

[Crosseye_Jack]

But that can be said of any transaction via a card. When ever I've receieved a chargeback (iirc its only happened twice in all my years, but I've been lucky) my payment provider has offered me the ability to dispute the charge back which will send the evidence that the transaction was legitimate back to the bank requesting the chargeback.

At which point you would give the documentation showing that that it was a as-is purchase and a legitimate transaction.

But as I said above, this could happen to any card transaction not just used car sales.

[stetrain]

It's a large transaction (by most people's day-to-day standards) with usually a random person who you have no business or other relationship with, who takes the car and drives off, hopefully to never be seen or heard from again. A private seller doesn't want to be dealing with credit card chargeback disputes weeks after the fact to get the money they thought they already had.

A used car dealership is better positioned to spend time dealing with chargeback disputes than a private seller, but why bother with extra work when you can just put up a sign that says "no credit cards" and never have to deal with it?

[Crosseye_Jack]

But my inital question was Why would stripe deem a used vehicle sale as a huge liability enough to flag the transaction. Not the seller having reservations about using the card system as a means of payment for the sale.

The person having the issue with stripe clearly initally thought accepting payment via card was fine, the purchaser hasn't issued a chargeback as far as we can tell, the transaction itself was flagged by stripe.

EDIT: just to be clear. or atleast try to be more clear. I'm not against Stripe "holding" on to the cash for a while, it was an abnormal transaction on the account for an item not normally sold by the seller (as they used Stripe as a back up method as their primary provider was down).

I was just asking the question why would a used vehicle sale be deemed as a huge liability for a company selling their old company van to process via the card network (not your avg joe selling a car from home who might not want the hassle - cash is king for as-is sales at the end of the day) because the fact it was a used vehicle was the reason the person I was replying to stated as the prob cause.

EDIT2: Allow me to word it like this. If the company wished to sell off old networking gear and/or servers "as-is" because they were no longer needed. The size of the transaction and the items sold would be unusual for the business to be selling which may cause the transaction to be flagged for further inspection/validation/hold on the funds just to be on the safe side (Thats fine, I get that, they were doing transactions outside their normal operations and tripped some safeguards).

But I just don't see why the item(s) themselves (the network gear/servers) alone would be such a liability to justify the hold, servers and network gear get sold as-is online all the time, so why would a used vehicle be any different? The person I initally replied to was saying that because "a used car seems extremely likely to cause a chargeback". I just don't get the "extremely likely to cause a chargeback" part.

[flak48]

I'd guess that a manual review for the automatically detected out-of-policy transaction wouldn't be prioritized if it's been flagged as a transaction outside the seller's line of business that they mentioned in their agreement with Stripe when onboarding.

I kind of agree - I don't see why manually reviewing a transaction that probably violates their agreement with Stripe should be prioritized by Stripe - even if the transaction would eventually emerge as legit (not fraudulent and not chargeback-able). Because such a manual review would entail a cost to Stripe that is being forced upon Stripe by the seller's actions.

[Crosseye_Jack]

I'm not questioning the idea that the transaction was outside the sellers normal line of business (and tbf to Stripe, would imo be a valid reason to be extra careful with the transaction and may be justifcation for account termination, even if account termination seems a bit harsh for a first time "offensive" imo, but hey, thats ToS for you), just the idea that "used car seems extremely likely to cause a chargeback" thats all.

[flak48]

Yep, FWIW I hope OP gets their money if not their account

[gnfargbl]

When these stories come up, I would like to hear enough context that enables me to understand whether or not Stripe is behaving reasonably. I understand Stripe takes customer privacy seriously, but even so it would be great to get the missing information in a suitably anonymous form.

In this case, my judgment (as a small business that uses Stripe for similar-sized SaaS payments) is that they acted completely reasonably.

[mindslight]

A paper-titled transaction seems like it should have one of the lowest chargeback risks. A copy of the purchase and sale specifying "as-is", plus signed title should be pretty clear cut evidence against a chargeback.

It's also not terribly surprising that someone who develops familiarity with one tool will then apply that tool to new situations. The main problem here is the ever-growing financial censorship regime / decommodification push that insists companies should be prying into their customers' business.

[flak48]

Why should Stripe take on the cost of investigating / handling a potential chargeback, even though it might be likely to be resolved in the business (and Stripe's) favor?

When it comes to chargebacks it's not just customer experience (reputation damage due to fraud) and liquidity risks that Stripes or other payment providers are protecting themselves against - but also the actual support cost of handling each chargeback too.

[mindslight]

Chargebacks are a possibility with every single credit card transaction. Routine B2C transactions carry the possibility that a card number was used fraudulently, the product was never delivered, or the customer is otherwise unhappy. A one-time payment for a vehicle with a state-documented title carries none of those risks.

[joshmanders]

So let me get this straight, you're siding in favor of Stripe not doing what Stripe signed up for by becoming a payment processor, is that correct?

[flak48]

Not correct, OP entered into an agreement with Stripe where Stripe would process payments received for the sale of cell phones (and not automobiles).

[joshmanders]

The item is irrelevant, everything OP said is something Stripe has to take on for every transaction. It's literally the definition of a payment processor.

[nunez]

and this right here is why I avoid larger subreddits. the truth is always buried underneath hundreds of poorly thought out knee jerk responses

[tomphoolery]

lmao why. why would you do this. just use square cash.

[arwineap]

I enjoy the power of greenbacks, very visceral too.