Substack, Stripe, and Charge Backs

What's A Writer To Do?

I love Substack. I am honored to be a writer on the platform. I am thrilled when someone follows or subscribes, and I am especially humbled when someone decides to support the work with a paid subscription.

So, what happened this past month was really upsetting. Indulge my explanation.

When you open a Substack account and agree to take both free and paid subscriptions, you must sign up using Substack’s processing system, Stripe.

Stripe will take the subscriber’s information, including a credit card, and does the banking end, sending me, the account holder, an electronic transfer at the end of each month, minus the Stripe fees.

So far, so good.

Well, maybe. Last month, someone subscribed, input his credit card, apparently tried to cancel and wanted to become a free subscriber. However, the original transaction wasn’t cancelled and instead was left in limbo.

During the month, I watched my account and figured I wouldn’t be paid since my online Substack account didn’t show that the transaction had been processed. I “assumed” the transaction would drop off at the end of the month.

When it was time for Stripe’s monthly payout, I suddenly see a CHARGE to my account for $26.22. Puzzled (and yet not surprised,) I began my investigation and learned that the transaction had apparently been charged to the subscriber’s credit card. He contacted Citi Card (naming names here!) and they issued what is called a “charge back.”

He got his money back immediately, which is what the credit card company is supposed to do; I was debited the “charge back fees.”

Through no fault of my own - I didn’t ask to be paid - I wasn’t paid, and now I was paying THEM!

I disputed the charge.

Yesterday, the dispute was settled and of course, I lost. The bank then charged another $15.00 in fees. So now I’m out a total $41.22 instead of receiving the original amount I would have received if the subscriber had followed through - $80.

So, here’s the thing. As a merchant, when you own a company and accept credit cards, you are subject to chargeback fees if someone decides to dispute a transaction you initiated and isn’t happy - for whatever reason.

Chargebacks are something you want to avoid at all costs because you not only lose the sale you made, you pay all these exorbitant fees if you lose the dispute, AND worse yet, you often lose the customer. The rules are 100% against the merchant.

I will try to get my bank to dispute the dispute, although I don’t have much hope for a positive resolution to the issue, and the amount of money isn’t so outrageous, but the mere fact that there is no one to speak with and that the dispute process is beyond onerous, is very disheartening.

My hope is that Substack sees the limitations and problems with their system and allows writers like me to use our own payment method; methods like PayPal or Venmo.

So for now, I am going to continue to use Substack, hope that more people see value in my work, are even willing to pay for it, and maybe not think it’s a mistake to do so.

Photo/gif from tigerdroppings.com