Chargeback Glossary and FAQ Hub for Stripe Sellers
Plain-English definitions of the terms that appear in dispute notifications, network rules, and processor emails, followed by answers to the questions sellers ask most.
- 3-D Secure (3DS)
- An authentication protocol that asks the cardholder to verify a purchase with their bank, often through a one-time code or an app approval. When authentication succeeds, liability for fraud-coded disputes generally shifts from the merchant to the issuer, although it offers no protection against non-fraud disputes.
- Acquirer
- The bank or payment company on the merchant's side of a card transaction. For Stripe sellers, Stripe acts in the acquiring role, receiving disputes from the card network and forwarding the merchant's evidence back to the issuer.
- Address Verification Service (AVS)
- A check that compares the billing address entered at checkout with the address on file at the issuing bank. A match is both a fraud filter and useful evidence in a later dispute, especially when goods shipped to the same verified address.
- Arbitration
- The final stage of a dispute, in which the card network itself rules on the case after the issuer and acquirer fail to agree. Networks charge a fee to the losing party that can exceed the value of a small transaction, so arbitration is rare for typical ecommerce and SaaS tickets.
- The issuer's approval of a transaction at the time of purchase, confirming the card is valid and funds are available. Authorization-related reason codes cover cases where a charge was captured without a valid or matching authorization.
- Card network
- The organization whose rules govern a card transaction, such as Visa, Mastercard, American Express, or Discover. Each network defines its own reason codes, deadlines, evidence standards, and merchant monitoring programs.
- Card verification code (CVC)
- The three- or four-digit security code printed on a card, sometimes called CVV or CID. A successful CVC check at checkout indicates the buyer had the physical card or its details in hand and is worth including as evidence in fraud disputes.
- Card-not-present (CNP) transaction
- Any transaction where the physical card is not presented to the merchant, which includes all online and phone purchases. CNP transactions carry a higher fraud risk and, without authentication, the merchant usually bears liability for fraud disputes.
- Chargeback
- A forced reversal of a card payment initiated by the cardholder's issuing bank at the cardholder's request. The funds are debited from the merchant provisionally while the case is reviewed, and the merchant may accept the chargeback or contest it with evidence.
- Chargeback fee
- A fee charged by the processor when a dispute is filed, separate from the disputed amount. Whether the fee is returned when the merchant wins depends on the processor's current policy and region, so check your own pricing terms rather than assuming.
- Compelling evidence
- Specific categories of proof that network rules recognize as sufficient to overturn certain disputes. For some card-not-present fraud claims, this can include a history of prior undisputed transactions from the same customer with matching data such as IP address, device, account login, or shipping address.
- Dispute
- Stripe's umbrella term for a chargeback and related events such as inquiries. In the Stripe dashboard, a dispute has a reason, a status, an evidence due date, and a set of structured fields and file uploads for the merchant's response.
- Dispute ratio
- The number of disputes divided by the number of transactions over a period, calculated by each network under its own formula. It is the primary figure card networks and processors use to judge merchant risk, and a dispute counts toward it whether or not the merchant eventually wins.
- Early fraud warning (EFW)
- A notice from a card network, surfaced in Stripe, that a cardholder has reported a transaction as fraudulent to their bank. It is not yet a chargeback, and refunding the flagged charge promptly often prevents one from being filed.
- Evidence packet
- The complete response a merchant submits to contest a dispute: a short summary of the case, the facts that rebut the cardholder's claim, and labeled supporting exhibits. Stripe compiles the submitted fields and files into a single document that the issuer reviews.
- First-party misuse (friendly fraud)
- A dispute filed by the legitimate cardholder against a legitimate charge, whether from confusion, a forgotten subscription, a family member's purchase, or an intentional attempt to keep goods without paying. It is the category where merchant evidence has the greatest chance of winning.
- Inquiry (retrieval request)
- A request from an issuer for details about a transaction before a formal chargeback is filed, common on American Express and Discover. A prompt, complete reply can resolve the cardholder's question and prevent the dispute from being created.
- Issuer
- The bank that issued the cardholder's card. The issuer files the chargeback on the cardholder's behalf, assigns the reason code, and its analysts decide whether the merchant's evidence is sufficient to reverse the dispute.
- Liability shift
- The reassignment of financial responsibility for a fraud dispute from the merchant to the issuer, most commonly when a transaction was successfully authenticated with 3-D Secure. The shift applies to fraud-coded disputes only, not to claims about delivery, quality, or cancellation.
- MATCH list
- A Mastercard-maintained database of merchants whose accounts were terminated by an acquirer for reasons including excessive chargebacks or fraud. Being listed makes it difficult to obtain a new merchant account for a period of years, which is why processor terminations carry consequences beyond lost revenue.
- Merchant error
- A dispute caused by a mistake on the seller's side, such as a duplicate charge, an order that never shipped, billing after a cancellation, or a promised refund that was not issued. These cases are generally best conceded quickly and fixed operationally.
- Monitoring program
- A card network program that identifies merchants whose dispute or fraud counts exceed defined thresholds relative to volume. Consequences escalate from warnings to fees, remediation plans, and eventual loss of the ability to accept that network's cards.
- Pre-arbitration
- An intermediate stage on some networks in which the issuer or acquirer challenges the outcome of representment before the case goes to full arbitration. It typically involves new evidence or a claim that the other side's response did not address the reason code.
- Reason code
- A network-defined code assigned by the issuer that categorizes what the cardholder is claiming, such as fraud, goods not received, not as described, or credit not processed. The reason code determines what evidence is relevant and is the first thing to check before responding.
- Representment
- The formal act of contesting a chargeback by submitting evidence to the issuer through the acquirer, sometimes called second presentment. For most merchants this is the only stage where they can argue the case, so the packet submitted here carries the full weight of the dispute.
- Reserve
- A portion of a merchant's funds held back by the processor to cover potential future disputes and refunds. Processors commonly impose or increase reserves when a merchant's dispute ratio rises or their business is judged higher risk.
- Statement descriptor
- The text that appears on a cardholder's bank or card statement to identify a charge. A descriptor that clearly shows the business name customers recognize, ideally with a support phone number or website, prevents a meaningful share of unrecognized-charge disputes.
- Third-party fraud
- A transaction made without the cardholder's knowledge using stolen card details or a compromised account, sometimes called true fraud. Because the cardholder genuinely did not authorize the purchase, these disputes are difficult to win without authentication data and are best addressed through prevention.
- Win rate
- The share of contested disputes that are decided in the merchant's favor, usually measured by count and by dollar value. It is most useful when broken down by reason code, because that reveals which case types are worth fighting and where evidence collection needs to improve.
Questions people ask
What is the difference between a refund and a chargeback?
A refund is something you issue voluntarily, and it costs you only the transaction amount and possibly the original processing fee. A chargeback is a reversal forced through the cardholder's bank, which adds a dispute fee, counts against your dispute ratio, and puts the decision in an issuer's hands. When a customer is clearly entitled to their money back, a refund is almost always the cheaper outcome.
Can I refund a customer to make a chargeback go away?
Not once the dispute has been filed. Refunding a charge that is already under dispute does not close the case or remove it from your ratio, and if the issuer also rules for the cardholder you can end up out of pocket twice. Refunds prevent disputes only when issued before the cardholder contacts their bank, which is why inquiries and early fraud warnings deserve fast attention.
How long does a cardholder have to file a chargeback?
Most reason codes allow around 120 days from the transaction date, though the exact window depends on the network and the code. For claims involving goods or services expected in the future, the clock can start from the expected delivery date instead, which can push the window well beyond a year for prepaid services or long shipping timelines.
How long does it take to get a decision on a dispute?
After you submit evidence, the issuer's review typically takes several weeks and can stretch to two or three months depending on the network. Stripe shows the status in the dashboard and notifies you when the outcome is final. There is no way to speed up the issuer, so the only timing you control is how quickly you respond.
Do I get the dispute fee back if I win?
It depends on your processor's current policy and your region, and processors have changed this over time. Check the dispute section of your Stripe pricing terms rather than assuming. Either way, the fee is a small part of the cost of a dispute compared with the lost order, the response time, and the effect on your ratio.
What dispute rate will get my Stripe account flagged?
Card networks publish thresholds for their monitoring programs, and those figures have historically sat around one percent of transactions, with the formula and exact numbers revised periodically. Stripe also applies its own risk review, which can begin below network thresholds if disputes rise quickly. If you receive an email about elevated disputes, respond promptly with a concrete remediation plan.
Is it worth fighting a dispute for a small amount?
Often yes, if the evidence already exists and your process makes submitting it fast. A templated response for a delivered order takes minutes and recovers the sale. It stops being worth it when the case requires custom investigation, when the reason code is one you cannot realistically overturn, or when the amount is below a threshold you have set in your triage rules.
What evidence works best for digital products and subscriptions?
Proof that the cardholder is the customer and used what they paid for: the account email and name matching the card, signup and purchase IP addresses and devices, login and usage logs after the charge, the timestamped acceptance of your terms and cancellation policy, and any renewal reminders you sent. For subscription cancellation disputes, show exactly when and how the customer could have canceled and whether they did.
Does 3-D Secure stop chargebacks?
It shifts liability for fraud-coded disputes to the issuer when authentication succeeds, so those disputes are generally not charged back to you. It does nothing for disputes about non-delivery, quality, duplicate billing, or cancellations, and it adds friction at checkout. Most sellers apply it selectively to higher-risk orders rather than to every transaction.
What happens if I miss the response deadline?
The dispute is automatically decided in the cardholder's favor and the funds stay reversed. There is no appeal for a missed deadline, and the loss still counts against your ratio. Setting up dispute notifications that reach a person the same day, and assigning an owner immediately, is the single most effective fix.
Can a customer file a chargeback after I already refunded them?
Yes, it happens, usually because the refund had not posted to their statement when they called the bank. Respond with the refund record showing the date, amount, and the same card, and the issuer will typically reverse the dispute because a credit was already processed. This is one of the most winnable case types, so do not let it go by default.
Why did I lose a dispute when I had proof of delivery?
The most common reasons are that the delivery address did not match the billing or verified address, the tracking showed delivered without a signature on a high-value order, the response did not address the actual reason code, or the packet buried the tracking behind irrelevant material. Sometimes issuers simply side with their cardholder, which is why prevention and a healthy ratio matter more than any single case.
What is an inquiry and how is it different from a chargeback?
An inquiry is an issuer asking for more information about a transaction before deciding whether to file a chargeback, common on American Express and Discover. No funds are reversed at the inquiry stage. Answering it promptly with clear transaction details often satisfies the cardholder and closes the matter without a dispute ever being created.
Should I fight true fraud disputes?
Usually not, unless the transaction was authenticated with 3-D Secure or you have compelling evidence linking the cardholder to prior undisputed purchases. When a stolen card was genuinely used, the network rules favor the cardholder and the effort is better spent tightening fraud screening, address and card verification, and rules for high-risk order patterns.