The Twitch Troll that PayPal Refused to Refund

We’ve all seen trolling on the internet before. Whether it’s in the comments on a popular Facebook post or Instagram share, these trolls enjoy the thought of ruining someone’s day. So what? Most are able to dismiss a troll’s lewd or hurtful comments, because they’re just that, comments.

Enter Twitch, the video streaming platform centered around video games that exploded in popularity last year when Amazon purchased it for $900 million. A number of entrepreneurial individuals make a living off of the donations or sponsorships they receive from those viewing their stream.

Paid subscribers vs. donations

There are three ways in which Twitch streamers can make money: sponsorships, paid subscribers, and donations. Sponsorships typically come from video game companies, that range from game creators to accessories like headsets and controllers. As you can imagine, sponsorships aren’t the most common form of income generation, as these are reserved for the small percentage of Twitch streamers who have a huge following.

Which leaves paid subscriptions and donations for the Twitch masses to earn money. In paid subscriptions, Twitch users pay a monthly fee (typically ranging from $5 to $10) to receive special perks from the channel’s host, including things like subscriber-only chat features, access to custom emoticons, and removing ads. While all of these features drive subscriptions, users really subscribe to support a Twitch streamer that they enjoy watching.

Twitch streamers don’t need to offer a monthly subscription program to ask for and/or receive donations. Donations are just what you would expect: viewers donate money to a stream because it provides them entertainment, they want to support the streamer’s cause, etc. Viewers who donate large sums of money are typically heralded by the streamer during their stream. But even those who donate small amounts receive shout-outs from streamers.

Twitch and chargebacks

Like we said earlier, trolls in the chat stream or comments of other social media platforms don’t (or shouldn’t) have an impact on the actual lives of those sharing content. However, now trolls are able to hit streamers where it hurts—in their wallets.

We constantly monitor the social spheres for the conversations occurring around chargebacks. If someone is bragging about a chargeback, we will use that information to aid in responses for our clients. A few months ago, we began to see more and more Twitch streamers lamenting chargebacks on donations they received.

Countless Twitch streamers, with small and large followings, have been hit by the one-two punch of troll donations and chargeback fees. First, the streamer has to deal with the fact that they won’t get the donation they were anticipating. Then, to make matters worse, whenever a chargeback occurs through PayPal, a fee of $20 is billed to the streamer. PayPal’s application of its fees on Twitch streamers isn’t new, every merchant who receives a chargeback is charged $20 for each chargeback occurrence.

PayPal takes a stand

Managing the chargeback process is no walk-in-the-park for PayPal, even when the chargeback is valid. So, it’s no surprise that it’s difficult for PayPal to make subjective calls on whether a chargeback was filed due to legitimate or sinister reasons. That being said, PayPal is certainly not deaf to Twitch streamers’ outcries of chargeback fraud.

A recent move by PayPal should make trolls think twice before donating to chargeback. According to a thread on NeoGaf, Twitch user iNexus_Ninja made a habit of donating large sums of money to various streamers. His donations ranged from $1,000 to $5,000 and added up to a whopping $50,000. When iNexus_Ninja attempted to file chargebacks for these donations, PayPal refused to refund him one cent of the donated money. The young man’s Twitter feed shows outright denial of this story and he claims he only submitted a chargeback on one Twitch streamer.

Other reports indicate that he tweeted mockingly about the $1,010 monthly payment he now must deliver to PayPal, but it appears those tweets have been deleted.

Unfortunately, not all instances of fraudulent chargebacks are as glaring as those allegedly committed by iNexus_Ninja. Most Twitch streamers will need aid in the process of responding to chargebacks to have a chance of PayPal denying the donators refund request. So, for you Twitch streamers out there, here are a few posts we think will be helpful if you’re ever burned by what you suspect to be a fraudulent chargeback:

• Fighting Chargebacks 101: Your First Steps
• 5 Warning Signs of Chargeback Fraud (and 5 Ways to Fight It)
• Customer vs Merchant: Two Sides to a Chargeback
• Don’t take Chargebacks Personally: 5 Mantras to Keep Your Cool

As always, we’re here to help you manage the chargeback process.