Disputes / Chargebacks

I just received a dispute notification. What does it mean?

A dispute occurs when one of your customers questions your charge with their bank or credit card company. Banks usually ask customers for a reason for the dispute.

Following the customer’s complaint, most banks tend to immediately side with the customer without additional investigation, and initiate a formal dispute. This can be pretty frustrating (and is a case of somewhat misaligned incentives), but there is a dispute resolution process, and in many cases you can prove that the charge was valid. Stripe will provide you with the dispute details, and we’ll then work with you to file any disputes that you feel are justified.

How does the dispute process work?

  • Stripe receives a notification of the disputed charge. We automatically send you an email with details. Additionally, we send a charge.dispute.created event to any webhook URLs you have.

  • We will deduct the disputed amount and fee from your account the day after a dispute is received. If you win a dispute, we will deposit the amount back into your account the next day.

  • Stripe will send any evidence you submit to your customer’s credit card company. That company will then make a decision about whether or not to resolve the dispute in your favor. The disputed amount is refunded to your bank account if the dispute is resolved in your favor.

What should I do when I receive a dispute notification?

You have a few options:

  • If you have contact details for the customer, you can get in touch with them to understand the reason for the dispute. It’s possible (maybe even likely) that the customer simply did not recognize the transaction; contacting them can often help resolve the issue quickly. If the dispute is the result of a misunderstanding, the customer can ask their bank to withdraw the dispute.

  • You can respond to the dispute. To do this, simply visit the dispute’s page (at the URL we email you) and provide evidence that the customer did in fact receive the product or service within the expected timeframe. You can also submit evidence via the API. Helpful evidence may include web logs, customer service emails, USPS/FedEx/UPS or other online tracking or shipping confirmations, proof of prior refunds or replacement shipments, and so on. Stripe will submit any information you can provide to your customer’s credit card company and keep you posted afterwards.

  • You can choose to accept the dispute—effectively refunding the transaction. This is what will happen if you do nothing.

Is there a fee for disputes?

Yes, you incur a $15 fee when there is a dispute on one of your transactions. If the dispute is resolved in your favor, however, we refund the $15 fee.

What does the dispute status mean? How can I tell when it changes?

When a dispute first comes in, its status is needs_response. When you update the dispute with evidence, we submit that evidence on your behalf, and the status changes to under_review. At some point after that – usually within 3-4 weeks – the dispute’s status will change to won or lost depending on whether the dispute is resolved in your favor or the cardholder’s favor.

When the dispute is resolved, we’ll email you and also send a charge.dispute.closed event. In the meantime, you can always visit the disputed charge’s page in your dashboard for the dispute’s status or view all your disputes.

I want to just give the customer a refund instead. Can I do that?

Unfortunately, once a dispute has arrived, there’s no way for you to refund the charge. Your customer has already gotten the amount of the dispute back from their bank, so if you agree with the decision to refund, you don’t need to take any action and your customer will keep their funds.

My customer said the dispute was a mistake. How do I get the dispute reversed?

If you’ve talked to your customer and they’ve agreed to drop the dispute, there are a couple next steps. First, have your customer call their bank and let them know. This is critical, since the bank won’t know your customer has dropped it unless your customer tells them.

The second thing you should do is submit evidence letting the bank know that your customer wishes to drop the dispute, including any email evidence you have where the customer may say that. If your customer had specific complaints that led to the dispute, be sure to address those in the evidence.

Once you’ve done those two things, we need to wait for the bank to let us know that the dispute has been closed in your favor. As soon as they do that, we will return the full amount of the charge and the associated $15 fee to you. Do note that this process can take quite a while—it’s not unusual for us to not hear from the bank for 60-70 days after the dispute. As soon as we know that the dispute is closed in your favor we will send you an email.

What are the most common reasons for a dispute, and how can I prevent disputes?

Disputed charges are an unfortunate fact of doing business, but you can do a few broad things to reduce your risk:

  • Use a recognizable name for your card statement text. You can set it on the settings page. We recommend using your website’s domain name.

  • Have clear return and refund policies and make them easy to find on your website.

  • Communicate accurate delivery times and keep customers updated throughout the process. If possible, use online tracking and delivery confirmation.

  • Post customer service contact information prominently and respond to customer inquiries quickly.

We provide you with more detail about the reason for the dispute if we have any, both on the disputed charge’s page in your dashboard and in the API. A few common reasons make up the bulk of disputes:

Fraudulent

  • What it means: The customer didn’t authorize the charge. This is the most common reason for a dispute and can happen if the card was lost or stolen. We have some suggestions for how to respond to these disputes.
  • How to prevent it: Make sure your statement descriptor is easily recognizable to your customers (and reflects the URL they would associate with their purchase). Send receipts upon payment to remind your customers what they paid for. If you ship physical goods, consider shipping only to AVS-approved addresses (in the US, Canada, and the UK) or reaching out to the customer before shipping to addresses that don’t match the AVS or billing address.

Unrecognized

  • What it means: The customer doesn’t recognize the merchant name or location on the card statement. Our suggestions for how to respond to these disputes are the same as for disputes for a fraudulent reason code.
  • How to prevent it: The prevention measures are similar to those for fraudulent transactions. In particular, make sure your statement descriptor is easily recognizable so your customers can tell who charged them.

Duplicate

  • What it means: You charged twice for the same product. We have some suggestions for how to respond to these disputes.
  • How to prevent it: Ensure your Stripe integration is robust enough to handle errors without double-charging. If a double charge does happen accidentally, refund the second charge right away and get in touch with your customer.

Subscription canceled

  • What it means: You charged for a subscription after it should have been canceled, according to the customer. It can also mean that the customer expected a reminder before each recurring charge but didn’t receive it. We recommend responding to these disputes following these guidelines.
  • How to prevent it: Promptly cancel subscriptions upon request, making sure to pass the cancellation along to Stripe if you use Stripe’s subscription functionality, and provide your customer with a confirmation of the cancellation. Make clear on your signup page that your customers are agreeing to a recurring charge and include information about whether or not you plan to notify the customer before each recurring charge.

Product not received

  • What it means: The customer did not receive the goods or services purchased. We have some suggestions for how to respond to these disputes.
  • How to prevent it: Promptly ship products after collecting payment. Estimate shipping and delivery dates as accurately as you can, and communicate clearly with your customer. If shipping delays arise unexpectedly, keep your customer apprised.

Product unacceptable

  • What it means: The product was received but was defective, damaged, or not as described. We recommend following these guidelines when responding to these disputes.
  • How to prevent it: Make sure your product descriptions are clear and accurate. If you’re shipping physical goods, ensure that you pack and ship your products in a way that protects them from being damaged in transit. Respond promptly and accede to customer requests for replacements for defective or damaged products.

Credit not processed

  • What it means: The customer informed you that the purchased product was returned or the transaction with you was otherwise canceled, but you have not yet refunded or credited the customer. We’ve put together some suggestions for how to respond to these disputes.
  • How to prevent it: Have a clear return policy, and make it easy to find. Honor your return/refund policy by issuing refunds promptly.

General

  • What it means: The dispute, unlike the majority of disputes, doesn’t fall under one of the specific categories above.
  • How to prevent it: The suggestions given for the other dispute reasons are still likely to be helpful.