Stripe Chargeback Guide: All the Rules, Time Limits & Info You Need to Know
For millions of companies around the world, Stripe is considered the go-to software for accepting online and mobile payments. While powerful, the platform offers straightforward functionality that allows merchants of all sizes to easily make and accept payments and manage their businesses online.
From startups to Fortune 500s, all types of companies rely on Stripe. Unfortunately, even the most reputable online businesses can struggle with fraud and chargebacks.
Fortunately, Stripe has built-in features to help proactively stop fraud, and offers an additional type of insurance against chargebacks. But are these enough? Let’s look at what Stripe chargebacks are, how they work, what protection the company offers, and the Stripe chargeback policy in general.
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What is a Stripe Chargeback?
Chargebacks (also called disputes) happen when cardholders call their issuing bank and question a transaction. Sometimes this is caused by a misunderstanding. Often, though, it's the result of customers attempting to get an unwarranted refund.
If the transaction in question was processed through Stripe, one of two things will happen when the cardholder calls the bank. Depending on the credit card brand involved, the merchant will receive either an immediate chargeback, or a retrieval form.
A retrieval–sometimes called an inquiry–is basically a request for more information about the transaction. If the cardholder is legitimately questioning a transaction (as opposed to trying to commit friendly fraud), the issue can often be cleared up with additional data from the merchant. The retrieval simplifies this process.
If the issue can be resolved this way, or if the merchant chooses to pay the customer a full refund, Stripe will not charge the business a chargeback fee. If not, the dispute will be escalated into a formal chargeback.
A chargeback means the bank will reverse the payment, and the cost of the transaction will be returned to the cardholder. That amount, plus a separate $15 chargeback fee (more on this later), is then taken from the merchant’s account.
It’s better for all parties if the case can be resolved while it’s still in the inquiry/retrieval stage. The Stripe chargeback credit card policy recommends merchants contact the cardholder directly to attempt a resolution. If the customer withdraws the case for some reason (such as obtaining a full refund), Stripe will consider the issue resolved, and no fee will be incurred.
Learn more about chargebacksResponding to Stripe Chargebacks
If a chargeback happens, then naturally, the merchant may want to try and prove that the transaction was valid and authorized. They can choose to challenge the chargeback to recover funds.
Compared to other processors, Stripe has made it relatively easy for merchants to contest a dispute. First, the merchant will need to collect compelling evidence to support the challenge. According to Stripe, this may include:
- Shipment tracking numbers
- Weblogs
- Communication
- Delivery confirmation
- Screenshots of other relevant documents
Once the evidence is collected, the merchant only needs to upload the documentation to Stripe. This is easily accomplished through the Stripe dashboard. The dashboard walks users through the submission process, step-by-step.
At this point, the merchant hands the entire job over to Stripe. The uploaded information is automatically organized into the proper format, then forwarded to the bank. Stripe acts as the facilitator in the dispute, updating the merchant as necessary.
The final verdict will come from the issuing bank. If the chargeback is deemed valid, the cardholder will retain the funds. If the decision is in the merchant’s favor, the transaction amount will be returned to the merchant's account (minus the Stripe chargeback fee, which is nonrefundable).
Stripe Chargeback Time Limits
Stripe handles a lot of the process for its users. That said, a chargeback is still a chargeback. All parties are subject to the rules of the card networks, including response time limits.
After the chargeback is initiated, the merchant will usually have between 7 and 21 days to respond with evidence. The exact time frame will vary based on factors such as the reason code or the card network. Missing the deadline means the cardholder automatically wins the dispute and keeps the funds.
The cardholder’s bank has a limited window in which to respond, usually 60-75 days. Again, the exact time frame will vary based on the card network.
Learn about chargeback time limitsWhether you contest it or not, every single dispute impacts your chargeback ratio.
Let us help.

Stripe Chargeback Fees
Like other banks and processors, Stripe charges an administrative fee for each chargeback the merchant receives. While Stripe will waive the chargeback fee if the case is withdrawn or resolved prior to a formal chargeback filing, this $15 fee applies even if the chargeback is deemed invalid.
The Stripe chargeback fee is not intended to be punitive. Rather, it’s a way for the company to recoup some of the costs of dealing with the chargeback. Unfortunately, this fee is only one small part of the cost of chargebacks.
Beyond Stripe’s chargeback fee, there are other potential fees or fines from banks and the card networks. The merchant will also lose both the merchandise and the revenue from the original transaction, plus any ancillary expenses such as shipping and inventory. This doesn’t include the time and effort spent collecting and submitting evidence. Even for a low number of chargebacks, the costs can add up quickly.
Learn about chargeback feesStripe Account Reserves
Stripe monitors each merchant’s account, evaluating payment activity, chargeback rates, and other factors. If a business shows a higher risk of customer refunds or disputes, Stripe may require an account reserve for that merchant.
An account reserve is a set percentage deducted from each transaction processed on the account. These funds are held in reserve to help ensure the merchant has funds on hand to cover future refunds or disputes.
Let’s look at an example. Assume we have a US merchant with a 25% reserve, a fixed release window of 30 days, and standard two-business day payout timing:
Having a Stripe reserve account does not impact the merchant’s ability to accept payments, and the company will continue to monitor the account to remove or decrease the reserve. It does mean that a portion of your revenue is permanently inaccessible, though, as long as the reserve is in place.
Learn about merchant account reservesStripe & Currency Conversion
As a rule: chargebacks can only be filed for an amount that does not exceed the original transaction amount.
In some cases, the amount of a dispute may seem to exceed the original sales charge. This discrepancy could be caused by currency conversion.
No matter what currency a cardholder uses, the funds are converted to the merchant's default currency. In the event of a chargeback or refund, the disputed amount is converted back to the original payment currency. Due to conversion fluctuations, the chargeback amount may seem to vary, causing confusion.
Here’s an example of how a chargeback total could be higher than the transaction amount due to currency conversion. In this example, we’ll assume an exchange rate of €0.94 EUR to $1 USD at the time of the original transaction:
Customer | Stripe | Merchant |
Pays USD$100 | Converts to EUR at current rate | Receives €94 |
At the time the cardholder requests a chargeback, the exchange rate has risen to €0.98 EUR to $1 USD. In that case:
Customer | Stripe | Merchant |
Disputes USD$100 | Converts to EUR at current rate | Receives Chargeback for €98 |
If a chargeback is filed for more than the original amount, and currency conversion isn’t a factor, it may be that the issuer bundled multiple charges into a single chargeback. Merchants should review all payments to see if any conversions were calculated correctly, or if more than one charge is in the disputed amount.
Stripe Radar & Chargeback Protection
Stripe Radar is a machine-learning program that uses adaptive algorithms to help detect and block fraud. The system pulls data from a wide range of sources. It evaluates each payment’s risk level in real-time.
One optional element of Radar is Stripe Chargeback Protection. Stripe will cover the cost of eligible chargebacks and waive the Stripe chargeback fee for merchants enrolled in the program. The company only requires the merchant’s account to be in good standing.
Naturally, there is a charge for this protection, though. The Stripe Chargeback Protection program costs 0.40% of the transaction total per transaction. This is in addition to the standard rate for transaction processing.
If a transaction costs $100, a merchant will pay $3.60 to process that transaction with Chargeback Protection. The higher rate will apply to all successful transactions, and several common types of chargebacks aren’t covered. Merchants need to check carefully to ensure the program is cost-effective for their business before opting in.
Learn about Stripe Chargeback ProtectionHow to Prevent Stripe Chargebacks
Fighting chargebacks is an important part of a comprehensive management strategy. Still, it’s best to prevent as many Stripe chargebacks as possible. Here are a few suggestions:
a few ideas. In reality, there are dozens of potential chargeback triggers to eliminate.
Learn how to prevent chargebacksStripe Chargebacks: The Bottom Line
While there are differences, Stripe chargebacks offer most of the same challenges as any other dispute. Management can be difficult and time-consuming. Not only is the subject complicated, it’s also slightly different for each entity involved. Just getting started requires a serious investment of resources.
Fraud is constantly evolving, and so are the laws and requirements for fighting it. The landscape is always in flux, meaning trends and techniques must be updated regularly.
Unfortunately, chargeback self-management strategies have a low success rate, statistically speaking. In other words, managing chargebacks without help involves massive amounts of work…but offers little chance of success.
It can be tempting just to give up and accept chargebacks as a cost of doing business, but there’s a better way. Chargebacks911® offers the most comprehensive chargeback analysis and management strategies available today. Our customized solutions can take chargebacks entirely off your plate and up your ROI. To learn more, contact us today.