In a heated video yesterday, professional streamer and YouTuber Desmond Etika Amofah issued a warning against against viewers who "fuck with me, fuck with my money, or fuck with my life". Amofah, a big personality in the Nintendo community, displayed five recent donations to his Twitch stream, each in quantities of $US50 ($66) or $US100 ($133). Then, he showed five corresponding disputes against those charges in his PayPal account. The viewer had demanded back the money they donated, and in the process, slammed Amofah with a hundred bucks in processing fees.
Illustration by Jim Cooke
"For content creators like myself and many others who suffer from a problem like this, it also fucks up our lives since everything I do is through PayPal," Amofah said.
"Chargebacks", as they're called, are requests for credit card companies to refund money given to someone through an apparently fraudulent transaction. Over the last few years, streamers, whose livings are often built on PayPal transactions, have become increasingly frustrated as trolls or viewers weaponise chargebacks against them. Maybe a viewer wants a shout-out after giving a streamer big money, but can't afford it. Or maybe some jerk just wants to piss off a streamer by forcing them to lose money. Most popular streamers have dealt with chargebacks -- the thrill of a huge donation, the disappointment when it's refunded and the anger when their PayPal account incurs a fee.
Chargebacks are possible because PayPal wants to protect users from fraud. So, for example, someone could donate a large sum with a stolen credit card. That card's true owner has the power to contest the charge if they can prove that something dirty went down. But if they can't, the charge will go through. Last year, a Twitch viewer and naive 18-year-old named iNexus_Ninja donated nearly $US50,000 ($66,295) to a handful of streamers with his parents' credit card. (After receiving about $US11,500 [$15,250] of that money, streamer LegendaryLea started dancing around her house.) INexus_Ninja was planning on charging back the money, but wanted to give the streamers time to blow a few thousand first. That way, he'd do some real damage by forcing it out of their pockets. Unfortunately for him, PayPal refused to pay it back.
Kaceytron, another big streamer, gets about a half dozen chargebacks each month, often after small donations. In 2013, when she started streaming, she sometimes received donations up to $US1000 ($1326) that were subsequently charged back. Over the phone, Kaceytron recalled how after a series of sketchy transactions, her PayPal account was frozen. "That was two to three weeks I didn't get donations at all," Kaceytron said. "That sucked and affected me pretty bad."
Chargebacks are particularly troubling when streamers don't keep a bunch of money in their PayPal account. If you spend the money given in a chargeback, and don't have the full amount available to return, your account could go into the negatives. Kaceytron says that's never happened to her because she always keeps a big balance there. But fees aren't even the end of it. When streamers use their PayPal accounts as proof of income to, say, get an apartment, frequent chargebacks and negative balances look pretty bad.
Back in April, on Twitch, Amofah paused his stream after someone donated $US200 ($265), joking, "Don't worry I won't charge back :)." Amofah stressed to viewers: "When you're a smaller channel and you have that problem, and you don't have it as good as I do... PayPal freezes your account. Not only that, but they can actually relinquish the funds for the chargeback and the chargeback fees and anything extra they want to tack on from any bank account, credit card of debit card linked to your PayPal."
Twitch's hands are tied when it comes to stomping out chargebacks on PayPal because it's a third-party tool. Aaron Kelly, Twitch's customer support manager, told Kotaku that they don't comment on PayPal's methods, but they're focusing on launching in-app monetisation tools. PayPal did not respond to multiple requests for comment.
Amofah says that, after hours on the phone with PayPal, he helped them understand how chargebacks affect his ability to make a living. So, now he believes that PayPal is on his side, helping to ward off troll donations. Streamers with less access to PayPal might not be so lucky. Over email, Amofah told me that "As painful as it sounds, streamers suffering from this chargeback issue have to put themselves through the wringer, and hound PayPal until their voices are heard. Big or small, it makes no difference, and it's unfortunate that that's the only option we have."