How disputes work

Learn about the high level lifecycle of payment card disputes.

A dispute occurs when an account owner contacts their bank to contest a payment to you for a number of possible reasons. When someone files a dispute, the process varies slightly across different card networks, but typically follows a standard pattern shown here:

When an account owner disputes a charge to their payment account, Stripe:

Notifies you of the dispute through the Stripe Dashboard, email, webhooks, and the API
Debits the disputed amount, plus a dispute fee, from your Stripe account until the dispute is resolved
Provides you with an explanation of the dispute and access to the account owner’s claim to their bank
Steps you through the process of submitting convincing evidence to counter the dispute

Throughout this process, Stripe facilitates your case, but doesn’t have influence over the outcome, which is at the sole discretion of the account owner’s bank.

Before the dispute

Sometimes, Stripe alerts you to pre-dispute notifications before an actual dispute is filed. Pay attention to these notifications because:

You might avoid a dispute entirely with proactive customer service and transaction clarification
Failure to respond in the pre-dispute phase can have negative implications in the formal dispute phase

Early fraud warnings

Early fraud warnings (EFWs) are messages sourced from Visa TC40 reports and Mastercard SAFE (System to Avoid Fraud Effectively) reports that card issuers on these two networks generate to flag payments they suspect might be fraudulent.

As with any fraud signals, EFWs don’t require any action or response from you. You might proactively refund the charge to prevent the cardholder from initiating a dispute, or you might wait and see if a fraud dispute happens. Most EFWs turn into a fraud dispute if you do nothing, but about 20 percent won’t.

Regardless of the likelihood of escalation, it’s not always a good strategy to refund all EFWs because if you’re too aggressive in issuing refunds for all EFWs, you’ll inevitably be refunding some transactions that would never have become disputes.

All other things being equal, our analysis suggests that the optimal point for issuing a refund on early fraud warnings is on charges that are roughly less than or equal to your dispute fee, which is 15 USD. It’s probably not worthwhile to refund EFWs on charges more than 35 percent higher than your dispute fee.

Cases where refunding makes more sense

The main exception to the optimal refund strategy above is if you have reason to worry about the effect of the dispute itself on your business or account.

If any of the conditions described under the Best practices for preventing fraud apply to your situation, it makes sense to more aggressively refund EFWs.

Although it’s called an early fraud warning, it’s possible to receive an EFW even after you receive a fraud dispute on a charge. This is generally because the systems the networks use to process EFWs are separate from the systems they use to process disputes, and the two aren’t necessarily in sync.

You can listen for EFW webhooks using our API.

Inquiries

Some card networks initiate a preliminary phase before creating a formal dispute and chargeback. Stripe calls this preliminary phase an inquiry, though these are sometimes also called a “retrieval” or a “request for information”. American Express and Discover are the networks that most often use this phase, while Mastercard and Visa don’t use it anymore.

During the inquiry phase, the cardholder’s bank requests transaction clarification, often because the cardholder doesn’t recognize the transaction description. You can resolve the case without incurring a dispute fee by either providing satisfactory evidence that answers the dispute type for the inquiry, or by issuing a full refund. Inquiries on partially refunded charges can still escalate to a chargeback.

Unwinnable chargebacks

With charges on Discover cards, failing to respond to an inquiry can signal to the issuer your implicit acceptance of the claim, resulting in an escalation to a formal, and likely unwinnable, chargeback. Unless you intend to accept financial liability, always respond to inquiries immediately, and make every effort to resolve issues amicably with your customer during this stage.

The Dashboard payment page describes inquiries as an “inquiry” or “dispute inquiry”, and as a “warning” or “dispute warning” in the API events summary, to mirror the language in the API.

If an inquiry has been open for 120 days without escalation to a chargeback, Stripe marks it as closed in the Dashboard and API. At this point, you can be confident the card network won’t escalate it—they don’t provide an explicit “win” message for inquiries.

During the dispute

Whether it’s because of an inquiry that escalated, or for some other reason, when an account owner files a formal dispute against a payment, the action initiates a chargeback where the card network pulls the funds for the dispute from your Stripe balance and holds it for the entire duration of the dispute. This might be for the full amount of the charge or a different amount. Why the debited amount is different from the original payment

Receiving a dispute

The initiation of a dispute triggers several processes:

The card network debits Stripe for your disputed payment and related dispute fees
Stripe in turn debits your Stripe balance for the disputed amount plus a dispute fee
You can’t issue a refund outside the dispute process while the dispute is open
Your dispute rate with that card network increases

Timing

Card networks typically allow cardholders to initiate disputes within 120 days of the original payment, but their rules allow more time in some situations. Certain industries, such as travel or event ticketing—where the payment might be made long before the event occurs—are prone to longer time intervals between the original purchase and a dispute. Generally speaking, when a customer makes a payment for something that will happen in the future (like a vacation reservation, a professional services appointment, or an event ticket), the clock starts on the date of the event, not the date of the payment.

Following the creation of the chargeback, you have a limited amount of time (usually 7-21 days, depending on the card network) to respond to the card issuer.

If you submit evidence, the issuer also has a limited amount of time (usually 60–75 days, depending on the card network) to evaluate the evidence and decide the outcome.

The full lifecycle of a dispute, from initiation to the final decision from the issuer, can take as long as 2-3 months to complete. There are no actions a business can take to reliably accelerate this timeline, other than to decline to contest the dispute by accepting it in the Dashboard or API.

At the completion of the dispute process, the issuer either overturns the dispute in your favor or upholds the dispute in their cardholder’s favor.

If the issuer overturns the dispute, they return the debited chargeback amount to Stripe, and Stripe immediately passes this amount back to you, and also returns your dispute fee, at Stripe’s expense.

If the issuer upholds the dispute, nothing changes from your perspective and no money moves—Stripe credited the issuer when they initiated the chargeback. The issuer will return the funds to the cardholder at some point during—or even after—this process. The timing of the cardholder’s credit is entirely at the issuer’s discretion.

Dispute fees

The dispute fee for your country (United States) is 15 USD, which Stripe deducts from your account balance when a cardholder initiates a dispute. Stripe returns this fee to your balance if you ultimately win the dispute.

For businesses in the Single Euro Payments Area (SEPA), cards processed on the Cartes Bancaires network incur no dispute fee.

Responding to a dispute

In most cases, you have the ability to challenge a disputed payment, as long as you submit strong evidence to the card issuer that invalidates the dispute claim before the deadline.

As soon as a dispute is active, the only way to overturn it is by submitting evidence in a response. Even in cases where your customer claims to have withdrawn the dispute, you must respond with evidence for the dispute to be closed in your favor. Submitting evidence is what signals to the issuer that you don’t accept the dispute and want to have the funds returned to you.

See Responding to disputes for information on how to:

Review the cardholder’s claim
Evaluate whether to accept or challenge the dispute
Gather appropriate evidence to respond to the dispute
Use the Dashboard or API to submit your response

Unchallengeable disputes

You can’t challenge some types of disputes under the rules of the card network they were processed on. In general, Stripe immediately closes them as lost as soon as we notify you about them, and you have no opportunity to present evidence to the issuer.

The Dashboard payment page and timeline describes these disputes as those where the card issuer doesn’t allow you to submit evidence.

Inquiries for Discover cards can turn into unchallengeable disputes if you don’t submit evidence for the inquiry.
The Cartes Bancaires network requires a higher standard of evidence from the cardholder before allowing them to initiate a dispute, but then prohibits you from challenging the dispute. This affects only businesses in the Single Euro Payments Area (SEPA) processing payments on the Cartes Bancaires network, and not businesses elsewhere charging cards issued by Cartes Bancaires. Learn more at Cartes Bancaires.

Disputed amount

A disputed amount might be lower or higher than the amount of the original charge. The following table outlines some of the most common reasons for this difference.

Scenario	Description	Example
Currency conversion	If the currency of the payment requires conversion (for example, when the currency of the seller differs from that of the buyer), the conversion rate at the time of the purchase is likely different from the rate at dispute initiation, which causes the converted dispute amount to differ from the original transaction amount.	In January, a purchase from a business based in Ireland for 100 EUR by a customer in the United States converts to a payment on the customer’s USD account of 113.74 USD. In April, the customer disputes the 113.74 USD payment, but the exchange rate has changed, so the 113.74 USD chargeback is now 107.86 EUR to the business instead of the original 100 EUR.
Recurring payments	Sometimes, when an account owner disputes multiple payments within a recurring subscription plan, their bank creates a single dispute for the total amount against one of the charges. This can also happen with non-recurring payments, but is rare.	An account owner disputes three 50 USD recurring charges, but the bank issues a dispute of 150 USD against one of the three payments.
Partial disputes	An account owner disputes only a portion of the total transaction amount.	A purchase of multiple products contains a single damaged item, so the account owner files a dispute to be reimbursed for only that item.
Partially refunded charges	A business partially refunded a payment, but the account owner disputes the entire payment. See our Disputes on partially refunded payments best practice for more information about submitting evidence to counter this kind of dispute.	An account owner contacts a business directly and the business refunds a portion of the original purchase because one of several items in the purchase is damaged. The account owner then disputes the entire purchase amount.

After the decision

After you submit your evidence, the next notification from the card issuer to both Stripe and you is the final decision. Stripe updates the status of the dispute to won or lost and notifies you through the Stripe Dashboard, email, and any other configured communication channels as soon as the issuer makes its decision clear.

This outcome is final for all parties. You can’t overturn a lost dispute, but your customer also can’t overturn a dispute decided in your favor.

Arbitration

Some card networks support an arbitration phase for lost disputes that carries a substantial fee of around 500 USD, but Stripe doesn’t support this dispute phase.