Chargebacks are projected to increase 24% globally from 2025 to 2028, totaling 324 million transactions each year. When customers dispute charges, businesses face a fee per dispute and must decide whether to accept the loss or invest time and resources fighting back—a process that requires navigating complex card network requirements and compiling detailed evidence.

The financial stakes escalate quickly. If your dispute rate rises above card network thresholds, you’ll enter monitoring programs with additional network fines ranging from $50 to $150 per dispute.

Beyond direct costs, disputes drain operational resources. Some businesses find the evidence collection process, varying issuer requirements, and tight deadlines so burdensome that they choose to absorb losses rather than contest potentially winnable disputes.

This guide will help you navigate disputes more effectively. You’ll learn about the dispute lifecycle and the kinds of disputes you’ll encounter, get additional guidance on submitting evidence, and understand how Stripe can help along the way.

This guide provides best practices for dispute management. Businesses remain responsible for evaluating each dispute and determining the most appropriate response.

What is a dispute?

A dispute (also known as a chargeback) occurs when a cardholder questions a payment made to your business with their card issuer. This could be because the cardholder sees a fraudulent charge they didn’t make, so they dispute it. Disputes can also result from first-party fraud—where cardholders either don’t recognize a legitimate charge they did make and dispute it by accident, or where they deliberately file a dispute (e.g., due to buyer’s remorse or as an attempt to fraudulently obtain merchandise without paying).

In general, you can think about disputes falling into seven different categories:

1. Fraudulent: The cardholder claims they didn’t authorize or participate in a transaction.
   
2. Product not received: The cardholder claims they did not receive the purchased goods or services.
   
3. Product unacceptable: The cardholder claims the received product or service doesn’t match what was described or expected.
   
4. Subscription canceled: The cardholder claims they were charged for a recurring service or subscription after cancellation.
   
5. Credit not processed: The cardholder claims they’re entitled to a refund or credit, but it was never processed or received.
   
6. Duplicate: The cardholder claims they were charged multiple times for a single transaction.
   
7. General: A catchall for disputes that don’t fit neatly into other more specific categories. For example, charging the incorrect amount.
   

Understanding the dispute lifecycle

The dispute lifecycle—from the moment a customer initiates the dispute until the final decision from an issuer if you contest—can take two to three months. Here’s what happens when a customer triggers a dispute, and how you can counter a dispute.

What happens when a customer triggers a dispute

A customer contacts their bank or card network to contest a payment, which triggers a formal dispute. Here’s what happens next:

• The issuing bank or card network debits your payment processor for the disputed amount and also charges the payment processor a fee for receiving the dispute (referred to as the “dispute received fee” in this guide).
  
• Your payment processor debits your balance for the disputed amount and charges you a fee, which includes a fee from the card network.
  
• Your dispute rate with the card network increases—regardless of whether you win or lose the dispute. If your dispute rate exceeds networking monitoring progress thresholds, you will incur higher fees for each subsequent dispute.
  
• If your business has too many disputes, you enter a monitoring program with additional fees and restrictions. Network fines can reach $50 to $150 per dispute.
  

How businesses can counter a dispute

Your business can then decide whether to accept the dispute or to counter it by submitting a comprehensive evidence packet, which could include screenshots of your terms of purchase, customer communications, and transaction reports. Stripe does not decide the outcome of a dispute. We help you submit evidence, but the card issuer (the cardholder’s bank) ultimately reviews the case and makes the final decision.

Here’s what happens when you counter a dispute.

• If you counter a dispute, a dispute countered fee applies, in addition to the dispute received fee.
  
• You submit required evidence within the issuer’s timeline, typically within 5 to 21 days. If you don’t take action before the deadline passes, the cardholder automatically wins the dispute.
  
• The payment provider processes the evidence and sends it to the card issuer. Although the timing is varied, the issuer usually takes between 60 and 75 days to review the evidence before making a decision about the dispute.
  
• In general, if you win the dispute, you receive the disputed amount and dispute counter fees back (this might differ based on region). If you lose, the cardholder keeps the disputed amount. And regardless of the outcome, the dispute still counts toward your dispute rate with the card issuer.
  

Five best practices for collecting evidence to respond to disputes

If you decide to challenge the dispute, review the evidence relevant to your dispute type and upload the supporting evidence. For each evidence type, you need to combine the evidence into one file. Assemble the materials in advance because you cannot edit the response or include additional files after submission. The more comprehensive, organized, and timely your response, the more likely you are to win the dispute.

To help, here are five best practices for collecting evidence to respond to disputes:

1. Organize the evidence

Before you submit evidence to counter a dispute, consider organizing it in these ways to make it reviewer-friendly:

• Include an executive summary: Start with a high-level narrative that explicitly ties your defense to the specific network rule or reason code, rather than simply relying on the individual evidence captions to tell the story.
  
• Present chronologically: Organize evidence in the order events occurred to create a clear timeline of the transaction and relevant communications.
  
• Group by type: Separate receipts, communications, policies, and system logs into distinct sections for easier reference.
  
• Simplify into bulleted lists: Instead of dense paragraphs, condense key points into bulleted lists.
  
• Maintain clarity: Ensure all of the text is readable and that images are clear, with sufficient contrast and resolution.
  
• Use images: Include annotated, high-resolution images and screenshots.
  

2. Include proof of customer authorization

Fraudulent disputes account for a majority of disputes for most businesses. It’s key to prove the legitimate cardholder was aware of and authorized the transaction when fighting these claims. The following data can help show the customer authorized the charge:

• Address verification system (AVS) matches
  
• Card verification code (CVC) confirmations
  
• Signed receipts or contracts
  
• IP address that matches the cardholder’s verified billing address
  

3. Include proof of service or delivery

Many disputes are a result of cardholders claiming that their products or services weren’t delivered, were defective or unsatisfactory, or weren’t as described.

To counter these types of disputes, provide proof of service or delivery. For a merchandise purchase, you can provide proof of shipment and delivery that includes the full delivery address. If your customer provides a “Ship to” name that differs from their own (e.g., a gift purchase), be prepared to provide documentation explaining why they’re different. Although it’s common practice to purchase and ship to an address that doesn’t match the verified billing address for the card, this is an additional dispute risk.

If your business provides digital goods, include evidence such as an IP address or system log proving the customer downloaded the content or used your software or service.

4. Include a copy of your terms of service and refund policy

For returns or refunds, it’s important to offer proof that the customer either agreed to and understood your terms of service at checkout, or they didn’t follow your policies. Include a clean screenshot of how you present your terms of service during checkout, with only the relevant policy emphasized.

5. Submit relevant, concise evidence

Issuers review thousands of dispute responses every day. Only include details that support the specific dispute, and do so in a neutral tone. Long explanations and irrelevant information do not necessarily make responses more compelling or convincing.

When including correspondence as background evidence, make sure the communications do not reveal personal identities and only include relevant excerpts. This is particularly important in a long email thread, when you would need to redact any duplicated content in the chain.

Key formatting choices can also help your team limit the evidence file length without detracting from your argument. Here are a few dos and don’ts:

• Do:
  
  • Paste relevant excerpts from your terms into a single doc.
    
  • Outline or underline text specific to the dispute type.
    
• Don’t:
  
  • Upload your entire terms of service.
    
  • Provide links to your terms of service or other relevant content on separate drives or websites.
    
  • Add a shipping tracking ID without any proof of delivery or fulfillment history.
    

You can also decrease file size by:

• Reducing font size
  
• Single spacing documents
  
• Shrinking images within PDFs
  

How Stripe can help

You can save time and money fighting disputes with Stripe’s AI-powered dispute products. You get end-to-end dispute management that prevents disputes before they happen, automatically resolves disputes when possible, and creates tailored evidence packages for eligible card disputes.

In 2024, we processed $1.4 trillion in payment volume—an amount equal to around 1.3% of global GDP. This scale means we have seen millions of dispute patterns across industries, helping give you more accurate predictions and better outcomes than stand-alone solutions.

Here’s what you can do with Stripe:

• Reduce disputes and dispute fees with Smart Refunds: Get proactive refund recommendations for transactions likely to result in fraudulent disputes. Smart Refunds uses Stripe Radar’s AI and incorporates post-charge signals like subsequent card use to identify high-risk transactions before customers dispute them as fraudulent.
  
• Reduce time and cost with dispute deflection: Provide transaction information to cardholders via the issuers to help them recognize legitimate charges and avoid unnecessary disputes. Dispute deflection also includes Visa Compelling Evidence 3.0, which automatically blocks disputes when you have demonstrated transaction history with customers that meets Visa’s standards, helping reduce friendly fraud with no integration required. Stripe’s dispute deflection also supports Visa and Mastercard transactions across fraud and nonfraud disputes, powered by Verifi and Ethoca.
  
• Help exit monitoring programs faster with dispute resolution: Automatically resolve eligible card disputes and create resolution rules using our no-code editor with the LLM-powered Radar Assistant.
  
• Recover more revenue with AI-powered Smart Disputes: AI compiles and submits tailored evidence for eligible card disputes on your behalf. You only pay the Smart Disputes fee when you win—there are no additional charges if you lose the dispute.
  
• Unlock insights with in-depth analytics: Gain visibility into dispute data via filtering by card brand, country, and dispute type. Analyze top dispute categories to understand root causes, and monitor evidence submission effectiveness and win rates to optimize your dispute strategy.
  

To learn more about how Stripe can help your business prevent and fight disputes, contact us or sign up for an account.

How GitHub Sponsors saved four to five hours per week managing disputes

GitHub Sponsors enables organizations and businesses to make one-time or recurring payments to developers working on open source projects to maintain, secure, and innovate the software that runs the world.

As the core open source funding platform, GitHub Sponsors needed to maintain high levels of security and trust. In particular, the platform needed the tools to identify and prevent malicious activities such as credit card fraud.

Solution
GitHub turned to Smart Disputes, a new AI-powered solution from Stripe that automates the chargeback response process by automatically generating and submitting evidence to counter disputes.

Prior to the use of Smart Disputes, GitHub Sponsors would review disputes manually. Tracking down evidence for some disputes was time-consuming and strained the team. Disputes were rarely if ever contested due to the time involved. With Smart Disputes, GitHub Sponsors saves four to five hours of work per week.