Tom-Chris Emewulu
Chief Disputes Analyst
Due to a surge in the loss of Stripe chargebacks and inquiries from our readers, we crafted this Stripe chargeback and dispute management guide to help you win more cases and protect your transactions. 

All chargebacks follow similar patterns, regardless of card networks.  

For Stripe chargebacks, Stripe acts as the middle person in the dispute. They convey your evidence to their financial partners, who also pass on the details to the card issuers if they find it necessary. This cycle takes 60–75 days.

However, Stripe is responsible for evaluating your dispute evidence. They decide whether your evidence meets the card brand’s requirements for you to win the chargeback.

And if it does not meet their expectations, you'll automatically lose the dispute-- they'll award the chargeback to the cardholder and close the case. It is also essential to keep in mind that the card issuer has the final say in the dispute. Stripe’s decision to convey the evidence is not a guarantee on any outcome of the case.

Your job is to do all you can to avoid Stripe chargebacks. But you should also be ready to fight the best way possible if they happen.

In the rest of this article, we shall walk through the keys to help you win Stripe chargebacks. We shall also look at the causes of unwinnable chargebacks, potential issues resulting from excessive disputes, and how to avoid such pitfalls.

Understanding Stripe Chargebacks cycle

Before launching a formal Stripe chargeback, some card issuers often choose to investigate a payment and request further information about the charge. Many card brands call these processes “retrievals.” Over at American Express, that initial investigation is known as “inquiries.”

Mastercard and Visa go a different route; they initiate Stripe chargebacks immediately the customers register complaints.

The key is to make sure that an inquiry or retrieval does not turn into a chargeback. And to do that, you must submit all compelling evidence to Stripe or refund the payment in full when necessary. Refunding the customers marks the inquiry or retrieval as resolved, and Stripe will not charge any dispute fee on the transaction.

The majority of inquiries and retrievals results from an Unrecognized Transaction. That is, the cardholder claims they do not recognize the transaction.

The merchant can easily quash such claims by providing ample details about their business and what the cardholder purchased. If the cardholder refutes the evidence, or the card network deems it unsubstantial, the card issuer might escalate the inquiry or retrieval into a Stripe chargeback. And that will result in reclaiming the cardholder’s money.

The failure to respond to a card network’s inquiry or retrieval with sufficient evidence could lead to unwinnable Stripe chargebacks. Hence, we advise that you must always respond to inquiries and retrievals as soon as the notice hits your dashboard. You must try your best to resolve the customer dispute at this initial stage.

How to Fight Stripe Chargebacks and Win

Note that in many cases the card issuer might choose to create a Stripe chargeback, without any inquiries. And when this happens, the card network will debit your account and hold the funds for the period of the dispute.

Stripe chargeback response time limit is between 7–21. This duration may vary depending on the card network. And as we intimated above, failure to submit substantial evidence by the deadline passes will result in the cardholder winning the case. They will keep the funds.

Best practices for responding to Stripe disputes

How you respond to any dispute will determine the outcome of the case.

When a dispute occurs, Stripe receives a notification of the disputed payment and sends you an automated email about it. They will create a Dispute object with the status "needs_response." If you’ve set up your integration to receive webhooks, Stripe also sends a charge.dispute.created event.

As best practice, Stripe that recommends users respond within their Dashboard. It guides you through the submission process, step-by-step—automatically formatting the information you provide. To complete that process they will ask for any necessary files on the purchase.

Below are some vital guidelines that can help you win stripe chargebacks with ease.

Provide compelling evidence and keep it to the point

Customers lodge thousands of payment disputes daily and that keeps card issuers busy.

So, avoid unnecessary details, long introductions about your product or company, a complaint about the customer, or the dispute's unfairness. Instead, hammer down to the issue at hand. Provide facts about the original purchase using a neutral and professional tone. 

Do your due diligence; take some time to investigate the dispute while collecting evidence to submit. For example, review Google Maps and Street View to understand your delivery location better or check social media like Facebook or LinkedIn to help establish the customer as legitimate cardholders.

Exchanges such as email correspondence or texts with the customer do not verify identity. If you must include them, make sure that you submit only the relevant information.

Make your evidence factual, professional, and concise. While providing little evidence is a problem, overwhelming the card issuer with unnecessary information can have the same effect. Remember, card issuers do not follow any links you provide in response. Include a clear screenshot of your terms or policies as they appear during checkout or on your site if they are an essential part of your defense.

Add compelling proof of customer authorization

Fraudulent Stripe disputes make up the majority of all cases. Showing that the actual cardholder knew of and authorized the transaction under dispute is crucial to winning Stripe chargebacks. Any data that shows proof of this is a standard part of a compelling response, such as:

  1. AVS (Address Verification System) matches
  2. CVC (Card Verification Code) confirmations
  3. Signed receipts or contracts
  4. The IP address that matches the cardholder's verified billing address

Stripe always includes any AVS/CVC results and the purchase IP (if available from your Stripe integration), but if you have any other evidence of authorization, be sure to include it.

Add evidence that you delivered the service or product

Aside from fraudulent disputes, cardholders' claims that products or services never arrived or happened were defective or unsatisfactory, or not as described are also potential dispute reason code. Let's assume that the product or service was in good standing and shipped and delivered before the dispute date; then, you should provide proof of use or delivery.

If you sold a physical good to the customer, then provide proof of shipment and delivery that includes the full delivery address, not just the city and ZIP code.

And if your client provided a “Ship To” name that differs from their own (e.g., gift purchase), make sure that you have documentation explaining why they differ. While it’s common practice to purchase and ship to an address that doesn’t match the card’s verified billing address, this is an additional dispute risk.

On the other hand, if you sold digital merchandise, provide evidence such as an IP address or system log, proving the customer downloaded the content or used your software or service.

Include a copy of your terms of service and refund policy

When it comes to disputes, fine print matters. Providing proof that your customer agreed to and understood your terms of service at checkout, or did not follow your policies when it comes to returns or refunds is critical. A clean screenshot of how your terms of service or other policies are presented during checkout is an important addition to your evidence—it is not enough to simply include a text copy of these.

When submitting documents or images as evidence, use the following recommendations to make sure they can remain readable:

  • Use a 12 point font or larger
  • Use bold text, callouts, or arrows to draw attention to pertinent information
  • Avoid using color highlighting
When uploading screenshots:
  • Crop the screenshot to the area of interest and circle any key components (e.g., delivery confirmation or signature)
  • Use the text fields in the dispute evidence form to describe what the image contains and how it supports your response

The Dangers of Excessive Stripe Chargebacks and How to Avoid Them

Card brands such as Visa, Mastercard, and American Express have Stripe dispute and card fraud monitoring algorithms that apply to businesses operating with high dispute activity.

On average, they consider Stripe chargeback and dispute activity above 0.75% as excessive.

Excessive Stripe chargeback and dispute activity not only affects your ability to process payments with Stripe but with other carriers as well. Plus, it can also result in unnecessary fines.

Cognizant of the challenges posed by excessive chargebacks, Stripe built machine learning models that can predict if your account might be in danger of excessive Chargeback and dispute incident at a point in the future. And if it happens that your transactions show the indicators the models track, they’ll alert you to take steps in identifying such threats. And to work on creating preventative measures.

Even though theses mechanisms work to help merchants predict potential chargebacks and monitor dispute trends with some degree of confidence, they cannot predict which particular payments customers will dispute. That leaves a significant hole in the dispute mitigation timeline.

Say Goodbye to Stripe Chargebacks with Chargeflow 

To address the challenge we highlighted in the preceding section, Chargeflow created a 360° dispute and chargeback automation system that defends your business from the unpredictability of payment disputes.

We give you tools to predict questionable transactions. And if your business faces a fraudulent Stripe chargeback, we deploy insightful data to help you fight the chargeback and win. And if we don't win, then it's free. That's right. We don't earn a dime if the dispute is not settled in your favor.

That’s what we call a win-win situation.

Our extensive dispute management algorithm pulls from over 50 data points associated with the disputed order to strengthen your Stripe chargeback representment. And they need any additional evidence, we re-evaluate the entire dispute correspondence to find the best approach to win the fight. 

After processing the required information, Chargeflow uses AI and Machine Learning to generate the world's most comprehensive dispute response. Getting started with our platform is simple and seamless. Sign up today and shield yourself from the dangers of excessive Stripe chargebacks.

Average Dispute Amount
Average Dispute Amount
$
30
# Disputes Per Month
# Disputes Per Month
#
50
Time Spent Per Dispute
Time Spent Per Dispute
M
20
calculation
You could recover
$500,000 and save
1,000 hours every month with Chargeflow!
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