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Ask HN: Stripe holding funds for 120 days for no reason

158 points interesting_att | 2 comments | 22 Oct 22 15:43 UTC | HN request time: 0.624s | source

Hi Guys--

I started a Stripe account (even incorporated through them) for a basic graphic design and web design service business.

I process a few charges and even though I didn't get a single chargeback or dispute, Stripe decided to deactivate my account and said they would refund all the charges that were processed.

Which would have been fine with me. They said they would refund on Oct 17, but that date came and past. So I kept emailing.

Now they're saying they're holding all the funds for 120 days because of "elevated risk".

Which is insane because they have already withdrawn all the funds, meaning their risk would be zero if they refunded everyone.

I am beyond hurt and confused as I did need this money for my daughter. These decisions have real impacts on real families.

What do you do in this scenario? I have tried contacting support at Stripe but seems to be of no help.

Show context
juanse ◴[22 Oct 22 17:40 UTC] No.33300337[source]▶
This should be illegal. It is literally a loan with no interest.
replies(1): >>33301181 #
1. consultutah ◴[22 Oct 22 19:09 UTC] No.33301181[source]▶
That would be an interesting way to solve this type of problem: make the payment processor pay interest on money withheld. Even at a low interest rate, it would hopefully incentivize them to figure out better ways of handling the risk. Are there any US legislators on HN?
replies(1): >>33301667 #
2. gruez ◴[22 Oct 22 20:04 UTC] No.33301667[source]▶
I doubt that 1.01%[1] of the balance frozen by stripe plays a major factor in their calculus. If the situation has gotten to the point where stripe is freezing a customer's account for 120 days, they've probably already written them off as a customer. After all, who in their right mind would still stick with stripe after that? The biggest cost would be lost future revenues from the customer.

Some napkin math:

Assuming that a customer gets paid monthly by stripe, that would mean the amount frozen by stripe would be 1/12 of a customer's ARR. Applying the federal funds rate to that over 120 days works out to a cost 0.0843% of customer's ARR. Meanwhile, stripe charges 2.9% in fees. Not all of that goes to stripe, some goes to banks in the form of interchange. If we assume stripe gets 0.5% after interchange, that would mean the losses from losing the customer for one year alone would be 0.5%, an order of magnitude higher than whatever interest they'd be forced to pay.

[1] current federal funds rate is 3.08%. if it's applied over 120 days, it works out to around 1.01%