With PayPal, a customer can easily request a full refund without contacting the seller. With Stripe, they have to go to their bank and try to make a case for fraud.
I used to have PayPal for my shed business which has an average of $4k for the transaction. A customer would order using PayPal and then call the next day to arrange immediate delivery, despite my store telling them we were backordered. They would get angry when I explained that, and request the refund. We got hit with fees both ways.
Here are some things you can do: - repeat the backordered message on every page: home page, category page, product page, cart page, checkout page - have them select a delivery date while adding the product - add messaging that the customer is "reserving their unit in priority sequence", not purchasing it - set it out of stock and harvest their email, with the promise to only use it to notify when it's back in stock
All of these WILL HURT CONVERSION RATES, but that's the tradeoff for reducing return/refund rates.
I agree that you are likely going to lose some business in the short run, but is that business worth swallowing the refund fees with your own money?
Also times have changed a bit. It's not like eBay is still the biggest market on the web and auto filling forms with your credit card information has gotten a lot easier thanks to modern browsers.
Still though, that's a huge loss for an extended period of time. I definitely don't like what PayPal is doing but Stripe is also pretty evil in a similar fashion. If someone disputes a charge (due to fraud that Stripe is supposed to prevent but doesn't) then you lose the processing fee and you (the business owner) also get billed a static $15 fee on top of that.
To put some sense of magnitude on it, according to https://appriss.com/retail/wp-content/uploads/sites/4/2017/1... the median percentage of retail sales refunded across all retail categories is 10%, so this translates to about a 0.3% increase in prices. Would you tolerate a 0.3% decrease in return on your investments in exchange for no additional benefit?
Also there are big players in the market that don't support PayPal at all, e.g. Amazon.
I understand that losing that amount of business is painful, but on the other hand, in the long run it pays to have principles.
I guess some businesses will try and put the fee on the customer.
Fortunately this goes both ways:
On one hand, other payment processors will be able to squeeze even more revenue out of the sellers (or buyers).
On the other hand, any competing payment processor will be able to collect more revenue to finance its growth, thus helping them to grow and out-compete PayPal.
Contrast that with Amazon, which is ran very close to zero margins, thus making it harder for any competitors to generate growth-inducing revenue and at the same time offer competitive prices.
For reference I've sold many many thousands of digital courses and about 40% of the people who bought a course used PayPal (60% used a credit card where I'm using Stripe on the backend).
But from the user's POV, they just like popping in an email address and getting what they want. It's especially important if you're a small business where the average person might not trust your platform or brand with their CC info. As developers we know things are secure if we use Stripe, etc.. but they don't know that.
I realistically don't see how PayPal will ever go away in the foreseeable future. Zelle is a great step forward but it's no where near ready to replace PayPal for accepting arbitrary payments (but it's great for 1 on 1 payments when both banks support it).