It's not like we can capitalize on commerce in China anyway, so I think it's a fairly pragmatic approach.
If it works for my health insurance company, essentially all streaming services (including not even being able to cancel service from abroad), and many banks, it’ll work for you as well.
Surely bad actors wouldn’t use VPNs or botnets, and your customers never travel abroad?
The blocks don't stay in place forever, just a few months.
The only way of communicating with such companies are chargebacks through my bank (which always at least has a phone number reachable from abroad), so I’d make sure to account for these.
I have first-hand experience, as I ran a company that geoblocked US users for legal reasons and successfully defended chargebacks by users who made transactions in the EU and disputed them from the US.
Chargebacks outside the US are a true arbitration process, not the rubberstamped refunds they are there.
I've seen some European issuing banks completely misinterpret the dispute rules and as a result deny cardholder claims that other issuers won without any discussion.
Yes, the issuing and acquiring banks perform an arbitration process, and it's generally a very fair process.
We disputed every chargeback and post PSD2 SCA, we won almost all and had a 90%+ net recovery rate. Similar US businesses were lucky to hit 10% and were terrified of chargeback limits.
> I've seen some European issuing banks completely misinterpret the dispute rules and as a result deny cardholder claims that other issuers won without any discussion.
Are you sure? More likely, the vendor didn't dispute the successful chargebacks.
But "merchant does not let me cancel" isn't a fraud dispute (and in fact would probably be lost by the issuing bank if raised as such). Those "non-fraudulent disagreement with the merchant disputes" work very similarly in the US and in Europe.
What's true is that in the US, the cardholder can often just say "I've never heard of that merchant", since 3DS is not really a thing, and generally merchants are relatively unlikely to have compelling evidence to the contrary.
But for all non-fraud disputes, they follow the same process.
I can only assume you are from the US and are assuming your experience will generalise, but it simply does not. Like night and day. Most EU residents who try using chargebacks for illegitimate dispute resolution learn these lessons quickly, as there are far more card cancellations for "friendly fraud" than merchant account closures for excessive chargebacks in the EU - the polar opposite of the US.
Again, you're not aware of the reality outside the US.
This is a naive view of the internet that does not stand the test of legislative reality. It's perfectly reasonable (and in our case was only path to compliance) to limit access to certain geographic locations.
> I don't care if you won those disputes, you did a bad thing and screwed over your customers.
In our case, our customers were trying to commit friendly fraud by requesting a chargeback because they didn't like a geoblock, which is also what the GP was suggesting.
Using chargebacks this way is nearly unique to the US and thankfully EU banks will deny such frivolous claims.
Are you saying they tried a chargeback just because they were annoyed at being unable to reach your website? Something doesn't add up here, or am I giving those customers too much credit?
Were you selling them an ongoing website-based service? Then the fair thing would usually be a prorated refund when they change country. A chargeback is bad but keeping all their money while only doing half your job is also bad.
That's true, but "fraud" and "compliance" aren't the only dispute categories, not by far.
In this case, using Mastercard as an example (as their dispute rules are public [1]), the dispute category would be "Refund not processed".
The corresponding section explicitly lists this as a valid reason: "The merchant has not responded to the return or the cancellation of goods or services."
> Again, you're not aware of the reality outside the US.
Repeating your incorrect assumption doesn't make it true.
[1] https://www.mastercard.us/content/dam/public/mastercardcom/n...
a) a Refund Not Processed chargeback is for non-compliance with card network rules,
and b), When the merchant informed the cardholder of its refund policy at the time of purchase, the cardholder must abide by that policy.
We won these every time, because we had a lawful and compliant refund policy and we stuck to it. These are a complete non-issue for vendors outside the US, unless they are genuinely fraudulent.
Honestly, I think you have no experience with card processors outside the US (or maybe at all) and you just can't admit you're wrong, but anyone with experience would tell you how wrong you are in a heartbeat. The idea you can "defeat" geoblocks with chargebacks is much more likely to result in you losing access to credit than a refund.
> Are you saying they tried a chargeback just because they were annoyed at being unable to reach your website?
In our case it was friendly fraud when users tried to use a service which we could not provide in the US (and many other countries due to compliance reasons) and had signed up in the EU, possibly via VPN.
I can imagine a merchant to win a chargeback if a customer e.g. signs up for a service using a VPN that isn't actually usable over the same VPN and then wants money for their first month back.
But if cancellation of future charges is also not possible, I'd consider that an instance of a merchant not being responsive to attempts at cancellation, similar to them simply not picking up the phone or responding to emails.
It's quite possible that both of our experiences are real – at least I'm not trying to cast doubt on yours – but my suspicion is that the generalization you're drawing from yours (i.e. chargeback rules, or at least their practical interpretation, being very different between the US and other countries) isn't accurate.
Both in and outside the US, merchants can and do win chargebacks, but a merchant being completely unresponsive to cancellation requests of future services not yet provided (i.e. not of "buyer's remorse" for a service that's not available to them, per terms and conditions) seems like an easy win for the issuer.
As a response to someone talking about customers traveling and needing support. But yeah geoblocks can occur in different situations with different appropriate resolutions.
> In our case it was friendly fraud when users tried to use a service which we could not provide in the US (and many other countries due to compliance reasons) and had signed up in the EU, possibly via VPN.
If you provided zero service at all, they should get their money back. And calling a chargeback in that situation "friendly fraud" is ridiculous.
If they weren't even asking for a refund and using a chargeback out of spite, that's bad, but that's a different problem from fraud.
For someone that did sign up via VPN, would they be able to access the cancellation page via VPN?
I'm very open to a different perspective if it's grounded in reality. I'm only judging you on your comments, which to date have been factually inaccurate (to the point that I wonder if you're trolling?),
> Both in and outside the US, merchants can and do win chargebacks,
At vastly different rates (~10% vs ~80%)
> but a merchant being completely unresponsive to cancellation requests of future services not yet provided (i.e. not of "buyer's remorse" for a service that's not available to them, per terms and conditions)
Geoblocking a region is not being unresponsive and will not result in a breach of network rules. Lots of precedent and completely uncontroversial but yet you believe otherwise.
> seems like an easy win for the issuer.
Seems is the operative word here, but it only seems so from your uninformed position. Even after quoting the MC terms that show that you're incorrect, you're still not open to new information.
No, if a company upholds their side of a contract, the customer must too, within the bounds of the law.
A chargeback in that situation is the _definition_ of "friendly fraud" and is actual criminal fraud.
> If they weren't even asking for a refund and using a chargeback out of spite, that's bad, but that's a different problem from fraud.
That's also criminal fraud.
US consumer are often shocked that "customer is always right" customer service doesn't extend beyond their borders and that they can't chargeback their way out of contracts they've signed.
> For someone that did sign up via VPN, would they be able to access the cancellation page via VPN?
It doesn't matter. If our terms prohibited VPN use to avoid geoblocking (which they did), it's irrelevant whether your VPN can or cannot access the cancellation page on a given day. You can email or write to us. All perfectly legal, lawful, and backed by merchant account providers.
Is that your observed rate or an industry-wide trend?
If it's the former, I'll stick with my theory – you're extrapolating from a pretty specific scenario to a different one. My guess would be that you're conflating geoblocking of content (what you seem to have experience with) with geoblocking of the cancellation method (what this thread is about).
If it's the latter, you're wildly off base:
> Merchants win an average of 50% of representments, though there are differences by country: U.S.: 54%, U.K.: 49.1%, AU: 46.7% and Brazil: 36.9%.
(from https://www.mastercard.com/us/en/news-and-trends/Insights/20...)
In fact, this is the opposite of what you're claiming (i.e. a higher win rate for merchants outside the US).
How do I find your email or postal address if you're blocking every request from a given region? My original point was about companies that do that.
If you're not, I agree that there's much less of a problem (some jurisdictions require online cancellation methods, though).
The company upholding their side by... doing nothing? Just give a refund if you're not providing service. And what is this about upholding your side if you're legally unable to provide the service in the first place?
> A chargeback in that situation is the _definition_ of "friendly fraud" and is actual criminal fraud.
They have to get the thing and then chargeback. Your definition is nonsense if it doesn't include them getting the thing.
> That's also criminal fraud.
It might be if they lie about something. But this isn't worth going on a tangent.
> It doesn't matter. If our terms prohibited VPN use to avoid geoblocking (which they did), it's irrelevant whether your VPN can or cannot access the cancellation page on a given day. You can email or write to us. All perfectly legal, lawful, and backed by merchant account providers.
Do they know who to email while the site is blocked? At least that's something.
But I'm not even asking about things fluctuating from day to day, I'm worried about a situation where a VPN can sign up but the same VPN at the same time can't be used to cancel.