Some of you have already gotten the news, but rather than send out more duplicate e-mails, I'm posting this letter here for your review.
~~~~~
Yesterday we received notice that one of Stealth/StreetLib’s affiliates, Libreka.de, submitted what appeared to be three months’ worth of old chargebacks to Stealth totaling several hundred dollars. They, in turn, have passed those chargebacks along to us.
Stealth insists that the error was on their end, not Libreka’s. Giac at Stealth wrote:
“The fact is the error came from us misinterpreting the Libreka sales reports. They themselves distribute to many channels, each with their own models and royalty systems, as mentioned in our first email to announce this partnership. This means we receive the sales report in the form of a highly complex table.
We should have been more thorough and gone through every single detail of these reports with Libreka, and for that, we truly apologize.
What happened is that we received sales reports from Libreka, and used these to pay our publishers (based on our interpretation). It was only a few months later, when Libreka paid us a significantly lower amount than we expected, that we realized our mistake. We had to make up for this difference in the following invoice and, for you, it unfortunately amounted to a big sum.
We misunderstood their sales reports and we accounted the wrong fees during the past several months. We saw the sales numbers on their sales reports and we accounted them as if they were integral sales. The problem was that they were not actual sales, but these transactions were part of their subscription plans, so we accounted a higher fee amount to our publishers than the due amount.”
So the bottom line is, they screwed up in a huge way, but they aren't willing to make good on those errors as any reputable company should, which means all of us are getting shafted. And to make matters worse, we don’t believe this is the last batch of chargebacks they’re going to submit. This first batch was from August to October of 2017. We fully expect they’ll submit new chargeback reports for November and then December.
Most publishers don’t give their authors a choice how to handle chargebacks—when they receive one, they immediately pass it on to their authors even if it eats up most or all of their projected royalty payment. Or worse yet, leaves them in a negative balance for months to come.
We don’t operate that way, and never will.
We’ve been in business since 2012, and have never received more than one or two chargebacks every few months, usually from Amazon who—as we all know—is the king of unwarranted chargebacks. Since these very occasional chargebacks only cost $2-3 apiece, and we’ve never received more than seven chargebacks in an entire year, we’ve always eaten the cost ourselves so it doesn’t interfere with your bottom line. But when something of this magnitude occurs, we simply can’t afford to absorb it; we don’t have that big a budget. We have no choice but to reluctantly pass it along to you.
~~~~~
Laura, Alana, and Veronica have already been notified about their chargebacks. Thankfully they were lucky; the totals weren't too high. Alexa and Summer, Taboo Trysts was one of the books involved. Your chargeback amounts (split five ways) are a whopping 75 cents each. That's such an insignificant amount, I didn't think it was worth sending you separate e-mails. If you have no objections, I'll just include debits for those two 75 cent chargebacks with tomorrow's royalties. Call it a wild hunch, but I don't think it's going to affect your royalties very much. ;-)
I don't know what February or March's chargebacks are going to look like...but Stealth has the problem under control now, so once those payments are processed, that should be the end of it.
This year has really sucked so far...I sincerely hope it starts getting better for all of us soon!!