Chargeback fraud when the funds were already transferred (marketplace)
How do marketplaces handle chargebacks if they already moved the funds to the sellers account?
Marketplaces take a small percentage of the funds and then move the rest to the seller. But the chargeback is for the whole purchase- money the marketplace doesn't have. In a marketplace you might make $30 on a $700 transaction. Getting a chargeback could then eat all your profits that month for a new business.
I run a site where refunds aren't allowed because the funds being transferred are gifts/donations not in exchange for any service on the sellers part.
I'm worries about friendly fraud/chargeback fraud- chargebacks where the buyer regrets the donation and makes a dispute even though we completed transaction for them. This kind of chargeback is illegal but it still happens.
Charegebacks are tough, I feel for ya, and from what I can tell, there isn't much the business owner can do to avoid them. Per ValuePenguin:
This is something I worry about a lot! Currently, it doesn't affect me bc I operate as a SaaS. That being said, I am moving in the direction of payments.
Stripe connect is nice bc you can use their account to process the transaction; hence any chargeback is on them.
Also, I know a lot of companies that have payouts set of circumstances that must be met, whether that’s time or other criteria.
As far as I know your liability for stripe connect disputes depends on the way your connect accounts are set up.
If, for whatever reason, you use express or custom connect accounts with destination charges, you're liable for the whole amount.
https://support.stripe.com/questions/dispute-responsibility-for-connect-platforms-and-connected-accounts
"payouts set of circumstances that must be met" what does that mean?
Thanks, Andrew!