How to reduce the chargeback dispute rate in Stripe

Jennifer Blake Posted on February 17, 2021

As a merchant, you are probably familiar with the costs and hassle associated with managing chargebacks, but how do you lower that dispute rate? 

There is a lot of help and advice online about fighting and winning chargeback requests (such as having excellent cancellation, return and refund policies, advertising the product accurately, and providing excellent customer service and communication). There are a variety of tools that can help you manage these payment disputes.

Here we take a look at how merchants can reduce the chargeback dispute rate in Stripe.

What is Stripe?

Stripe is a payment platform and a straightforward solution to sending and receiving payment online. Many eCommerce companies favour it because it removes a significant amount of financial complexity. However, just like payment platforms such as Paypal, merchants still receive a fair number of disputes and friendly fraud attempts.

How disputes work with Stripe

A dispute occurs when a client queries a transaction with their bank card provider. The transaction might be theirs, family members, or made by a cybercriminal.

The bank creates a request to reverse the disputed transaction, and the result of the dispute could be the client receiving a refund. In this case, the eCommerce store receives a deduction to the value of the refund and a dispute handling fee from Stripe. If you take out Stripe’s Chargeback Protection, you pay 0.4% per transaction, which covers dispute fees and the disputed amount.

Stripe’s role in the dispute process is to submit your evidence to the financial entities involved within a limited timeframe. Stripe has no decision-making authority, but Stripe notifies you of the dispute by email, and the dispute’s reason, response timeframe, and chargeback decision can all be found in your Stripe Dashboard.

You can upload your evidence and complete your response step-by-step in the dashboard. Your evidence can include courier tracking numbers, delivery confirmations, and weblogs.

Stripe chargeback management

Reducing dispute volumes

You can lower the number of disputes you receive by equipping your account with Stripe’s Radar fraud prevention tool. Many chargebacks occur because the customer doesn’t remember the transaction. You can provide extra information to help the customer see what the purchased item or service is.

You can also choose to use a courier with detailed tracking, ensure your terms of service are easy to find and understandable, and respond quickly to any query a customer might raise.

How Payment Help reduces chargeback disputes

At Payment Help, we go one step further by reducing the number of chargeback requests you receive before they even happen! Our chargeback management software interrupts user behaviour at the exact point a chargeback would be raised by enabling customers to identify forgotten purchases. 

Our software integrates with a variety of merchant systems so you can handle payment disputes in one place. Register today to manage your chargebacks for free or learn more about becoming a partner.