Stripe Dispute Overview

A credit card dispute (sometimes called a chargeback) happens when a Customer (the cardholder) contests a charge on their credit card statement. This formal procedure is a request from the Customer to their bank (credit card provider) to reverse a purchase.

The main reasons a Customer might file a dispute is:

1. Unauthorized charges (fraud)

   1. Friendly Fraud

      1. Doesn’t recognize billing name, files chargeback.

      2. Forgot they made the purchase, thought it was fraud.

   2. Malicious Fraud

      1. Stolen credit card used to buy reservation.

      2. Buyer gets item, files false claim to get money back.

      3. Buys reservation to test functioning stolen card.

2. Items or services not received

3. Misrepresented merchandise

4. Duplicate charges

5. Incorrect charge amounts

6. Canceled recurring subscriptions

When a customer triggers a dispute, Stripe (the payment processor) charges a dispute fee ($15), and the original charge is put on hold. The $15 dispute fee stands regardless of the outcome of the dispute. A disputed charge is open and eligible for a counter-response from the Club for 7 - 21 days (varies by card network).

If no action is taken, and the dispute expires (typically after 90 days from the dispute), the Customer is automatically refunded, which shows up on their credit card statement.

If action is taken by the Club to counter a dispute, log in to your Stripe Express account to Review and Counter the open disputes. After a Club submits a counter to a dispute, Stripe and the credit card provider review the evidence submitted and a decision is made within 60 - 75 days. The entire lifecycle of a dispute, from initiation to resolution can be anywhere between 2 - 3 months.

• If action is taken and a dispute is won, the charge that was put on hold by Stripe is released to the Club and the Stripe dispute fee ($15) is absorbed by the platform provider, PodPlay. This dispute fee and any others are shared with the Club once a month in a passthrough report.

• If action is taken and a dispute is lost, the charge that was put on hold by Stripe is released to the Customer, and the dispute + the Stripe dispute fee ($15) is absorbed by the platform provider, PodPlay. This lost dispute + it’s corresponding dispute fee ($15), along with any other disputes, are shared with the Club once a month in a passthrough report.

In both situations, whether a dispute is won or lost, there is a Stripe dispute fee of $15 that is always absorbed by the platform provider, PodPlay. These dispute fees are always provided to the Club in a passthrough report at the end of the month, and are paid by the Club.

This article provides a step-by-step process for how to counter a Customer’s dispute:

• Reviewing and Countering Disputes

The policy of Stripe is that the platform provider, PodPlay, absorbs the chargeback loss and the Stripe fee. Clubs are provided with an invoice for reimbursement, and a report on all disputes, once a month. What happens financially is:

• When the dispute was initiated, Stripe immediately places a hold on the funds

• If the dispute is lost (or won from the cardholder’s perspective), the cardholder receives a refund.

• PodPlay initially covers the lost amount, and subsequently invoices the Club for reimbursement

If you have any questions about the disputes, counter-submissions, or reimbursement invoice, please reach out to your PodPlay CSM.

Stripe has been working to make their dispute process more robust, adding far more color and transparency to what is often a painful experience. Below are new documentation Stripe released, which offer additional background on the entire dispute lifecycle.

Disputes 101: Learn about disputes, how they work, and what you can do to prevent them

How disputes work: The lifecycle of payment card disputes

Respond to disputes: Learn how to challenge or accept a dispute in the dashboard

Dispute reason code categories: Learn about reason code categories and evidence guidelines

Dispute timing: The lifecycle of payment card disputes