A dispute, also called a chargeback, happens when a cardholder questions a payment with the bank that issued their card. The issuer files the dispute through the card network, the payment is reversed, and the merchant has a limited window to accept the dispute or challenge it with evidence. The issuer, not the processor, decides the outcome.
This page explains how that process works on Stripe, using Stripe's own documentation. Other processors follow the same card network process but may present it differently.
What happens when a dispute is filed
Stripe's documentation describes the sequence this way. The issuer creates a formal dispute on the card network, which immediately reverses the payment. The network pulls the payment amount and its dispute fees from Stripe, and Stripe then debits your balance for the disputed amount plus a dispute fee. Stripe notifies you by email, in the Dashboard, through webhook events and in the API.
Two consequences follow straight away:
- While the dispute is open, you cannot issue a refund outside the dispute process.
- Your dispute rate with that card network goes up.
Stripe also notes that the disputed amount can differ from the original charge, for example because of currency conversion or because the cardholder disputed only part of an order.
Before a dispute: inquiries and early fraud warnings
Not every problem starts as a chargeback.
Inquiries
Some networks start with a preliminary stage that Stripe calls an inquiry, sometimes called a retrieval or a request for information. The issuer asks for clarification, often because the cardholder does not recognize the charge. Stripe says American Express and Discover use this stage most often, and that Mastercard and Visa no longer use it. You can resolve an inquiry without a dispute fee by providing satisfactory evidence or by issuing a full refund. Stripe warns that failing to respond can lead to a formal and likely unwinnable chargeback.
Early fraud warnings
Early fraud warnings are messages from issuer fraud reports on the Visa, Mastercard and JCB networks. Stripe says they do not require a response. You can choose to refund the payment to prevent a fraud dispute, or wait. Stripe's monitoring program guidance adds that Visa's monitoring program counts these fraud reports in its calculations even though they are not disputes.
The usual timeline
Stripe gives these typical windows, which vary by card network:
- Cardholders can usually start a dispute within 120 days of the original payment, with more time allowed in some situations, such as payment for a future event.
- Once a chargeback is created, you usually have 7 to 21 days to respond, depending on the network. If you do not respond in time, you lose the dispute automatically.
- If you submit evidence, the issuer usually has 60 to 75 days to decide.
- From start to final decision, the full process can take 2 to 3 months.
Dispute fees
Stripe charges a fee when a dispute is received. It is deducted from your balance when the dispute starts. Stripe's documentation says that for businesses outside Mexico this fee is non-refundable, even if you win. In most countries, if you counter the dispute, a separate dispute countered fee applies as well, and Stripe returns that countered fee if you win. Fee amounts vary by country and are listed on Stripe's pricing pages, so check your own account's pricing rather than relying on a figure from elsewhere.
Accept or counter
Stripe's Dashboard gives you two choices for a formal dispute:
- Accept: you confirm you are not contesting the refunded amount.
- Counter: you submit evidence through a guided form.
Before deciding, read the claim. Stripe's dispute page can show the documents the issuer attached, sometimes including the cardholder's own description of the complaint. Stripe suggests contacting the customer where possible and keeping a record of that communication, because resolving the complaint may lead them to withdraw the dispute. Even if a customer says they have withdrawn it, Stripe states that you must still respond with evidence for it to close in your favor.
Evidence: one chance, and no links
Stripe is clear that you get only one opportunity to submit a response. It is forwarded to the issuer immediately and cannot be edited or added to. Stripe's guidance on evidence files includes these points:
- Address the specific reason for the dispute. Each dispute category has its own evidence recommendations.
- Combine items of the same evidence type into a single file. You can submit one file per evidence type.
- Keep the combined evidence within Stripe's stated limit of 4.5 MB, and Mastercard evidence within 19 pages.
- Do not include audio or video, requests to call or email, or links. Issuers do not review external content, so show tracking and policies as screenshots or documents.
For a research supplier, relevant evidence often includes the order record, the buyer's confirmations at checkout, the terms and refund policy the buyer accepted, shipping and delivery records, and your correspondence with the buyer. Records made at the time of the order carry more weight than explanations written afterwards. See payment records worth keeping.
Outcomes
After you submit, the dispute status changes to under review. When the issuer decides, it becomes won or lost. If you win, the disputed amount is returned to you. If you lose, the reversal stands. Stripe notes that the outcome is normally final, that it does not support the arbitration phase, and that in rare cases an issuer can change a lost dispute to a win later.
Why disputes matter beyond the money
Disputes count against you even when you win. Stripe's guidance on card network monitoring programs explains that those programs do not consider refunds or dispute outcomes when counting disputes, because the networks care more about preventing disputes than about winning them. Merchants whose dispute or fraud levels exceed a network's thresholds can be placed in a monitoring program, with fines and fees. The pages on what a dispute rate is and card network rules merchants should know explain more.
The better approach is to prevent disputes at the source: recognizable statement descriptors, accurate listings, visible policies and fast support. The checklist for reducing disputes covers these in order.
Where your records fit
Dispute responses are built from records. Claddr stores buyer checks, signed attestations, holds and payments against each order in a tamper-evident audit record that can be exported, as explained in how Claddr's audit record works. Records support a response. They do not decide it: the issuer does.