Last week was June 1st. Why does that even matter a week later? Well, merchants across America aren’t very happy and now feeling the pain of that date. It’s even gone viral on Twitter last week! And we wrote about it before it went viral. If you’re not following The Instant Refund Expert™ then you’re missing out!
Let’s take a step back to early March and the week when Silicon Valley Bank failed. Yes, that week. The week when literally nothing else was on the news and we were all told the banks were going to fail and economic chaos would happen unless the government bailed out Silicon Valley Bank. Now you remember the week in question.
Well, one other quite important thing happened during that same week that flew under the radar. Coincidence? Maybe not.
Payments processor who everyone knows called Stripe, quietly announced that week via an email sent to customers on March 8, 2023, that Stripe would no longer refund the $15 fee it charges sellers who win a dispute.
The email said:
“Whether you win or lose a dispute, card networks charge Stripe a fee in either case. To cover these costs, starting June 1, Stripe will no longer return the $15 dispute fee for successfully contested disputes. The dispute fee itself is not changing. “
That means, merchants and sellers will basically get screwed. According to data shared by Amazon at the Accelerate conference a few weeks ago, the average transaction value is $121.
Do the math: If a customer disputes a charge on the average $121 transaction, even if the customer is a fraudster or bad actor and the merchant can prove the dispute is bogus, Stripe charges the merchant seller $15 dispute fee even if the merchant seller wins the dispute!
$15 fee on $121 order value is 12.4% … WTAF!
According to Bloomberg, Stripe reportedly expects to process $1 trillion in payment volume this year, up from the $800 billion they processed in 2022. That’s about 1/5th of everything bought in the United States last year to put the numbers in perspective.
Now don’t shoot the messenger here. This is madness. But don’t blame Stripe. It’s the system that’s broken and once again screwing the merchant sellers. Does anyone think for one second merchants are just going to eat that 12.4% fee? Of course not, it’s going to be baked in to prices and passed on the consumers to pay for the broken system that rewards the bad actors.
That’s why merchants need to implement instant refunds to get ahead of this nightmare. Instant refunds can provide several benefits for an ecommerce merchant, including:
- Improved customer satisfaction: Instant refunds provide a fast and hassle-free way for customers to receive their money back, which can help improve customer satisfaction and loyalty. Customers are more likely to shop with a merchant again if they had a positive experience with their return or refund process.
- Reduced customer support inquiries: When customers have to wait for a refund, they may contact customer support to check on the status of their refund. Instant refunds eliminate this need, freeing up customer support staff to focus on other issues.
- Faster inventory restocking: When a customer requests a refund, the merchant has to process the return and restock the inventory. Instant refunds can speed up this process, allowing the merchant to restock the inventory more quickly and reduce the time the product sits idle.
- Competitive advantage: Offering instant refunds can help set a merchant apart from competitors who do not offer this service. It can be a key differentiator in a crowded market, and can help attract new customers who prioritize fast and easy returns.
Overall, implementing instant refunds can help improve customer satisfaction, reduce customer support inquiries, speed up inventory restocking, and provide a competitive advantage for ecommerce merchants.
Yours Truly,
The Instant Refund Expert™
The Refunds Blog 