The Increasing Cost of Stripe Disputes
Facing a payment dispute on Stripe now means more than just the hassle of paperwork; it can significantly dent your revenue. As of June 2025, Stripe introduced a counter-dispute fee of $15, which combined with an initial dispute fee totals $30 if you lose. This change highlights the growing incidence and impact of payment disputes on merchants.
Why Are Stripe Payment Disputes Rising?
Digital transactions facilitate not only convenience but also complications. The rise in disputes can be attributed to multiple factors:
- Friendly fraud: Customers dispute charges despite receiving goods.
- First-party misuse: Disputes from customers who regret purchases or don’t recognize the charge.
- Outright fraud: A significant number of disputes result from fraudulent activities, especially in card-not-present scenarios.
Understanding these drivers is essential for developing protective strategies for your business.
How to Defend Your Revenue
1. Prevent Disputes Before They Happen
- Clear communication: Ensure billing statements reflect your business name accurately to minimize confusion.
- Detailed confirmations: Send thorough order confirmations to customers.
- Accessible policies: Clearly outline your policies on refunds, shipping, and returns.
2. Monitor Dispute Trends
- Regularly check your Stripe Dashboard for any trend changes.
- Utilize tools to identify recurring issues, such as ambiguous product descriptions or shipping delays that may generate disputes.
3. Fight Smart, Not Hard
- ROI assessment: Before contesting a dispute, evaluate the potential return on investment. Consider the likelihood of winning and the costs attached.
- Gather evidence: Compile detailed order information, customer interactions, and any supporting documentation.
- Use Stripe's Smart Disputes feature: Streamline the evidence collection and submission processes.
4. Leverage Proactive Dispute Tools
- Rapid Dispute Resolution: An option within Stripe that helps resolve disputes before they escalate into chargebacks.
- Ethoca Alerts: Alerts you to potential disputes, allowing for swift action before issues develop further.
The New Cost of Fighting Stripe Chargebacks
Starting June 17, 2025, the fee structure for disputes with Stripe has changed:
- $15 dispute fee for filing a chargeback (no change).
- $15 counter-dispute fee if you decide to contest.
- Win: Receive a refund of the counter-dispute fee.
- Lose: Pay $30 in fees plus the transaction value.
Example:
- Selling a product for $40 and losing the dispute will total a loss of $70 when considering fees.
This emphasizes the importance of strategically assessing each dispute:
- What’s the likelihood of winning?
- What amount will be recovered?
- What could you lose if you incorrectly contest a dispute?
Revenue Protection Strategies for Stripe Merchants
1. Prevent Disputes Before They Happen
- Use accurate billing descriptors.
- Provide clear refund, shipping, and return policies.
- Ensure responsive customer service to address inquiries preemptively.
2. Monitor Dispute Trends
- Check dispute rates consistently through your Stripe Dashboard.
- Identify patterns using chargeback management tools to find areas that need attention.
3. Fight Smart, Not Every Dispute
- Focus only on disputes with a high likelihood of success.
- Ensure to collect and present strong evidence to support your case.
4. Leverage Stripe’s Dispute Prevention Tools
- Ethoca Alerts: Provides timely notifications about potential disputes.
- Order Insight: Offers a direct way to present evidence to the customer's bank.
5. Maintain a Low Dispute Rate
- Try to keep your dispute rate below 1% to avoid increased fees or risk of account suspension.
What to Do If You’re Facing a Dispute
- Act quickly: You have a limited time frame to submit evidence to Stripe.
- Thorough Documentation: Include all relevant information to make your case stronger.
- Sometimes it’s better to refund: If the costs of dispute exceed potential recovery, consider refunding the transaction instead.
The Bottom Line
Payment disputes on Stripe are on the rise, and the financial impact is significant. Focus on prevention, monitor trends, and contest wisely to protect your revenue effectively.
Ready to take control of Stripe disputes with precision? Deploy Safe App’s mobile-first platform to streamline your dispute management today. **Start defending your revenue with Safe App now!
Safe App Blog