How Stripe Chargeback Protection Defends Merchant Revenue

This article has all the needed information about stripe chargeback protection, from how to stripe chargeback protection works and the stripe chargeback limit to how to stripe chargeback protects merchants’ revenue, how Stripe chargeback protection defends Merchant Revenue and lots more.

Stripe is a PSP (payment service provider) established in 2010. The Stripe platform (payment service provider) is a popular choice of the payment processor for new eCommerce sites, all thanks to its easy-to-use API (application programming interfaces), which allows developers to enable payments for websites. However, today some major or significant online merchants use Stripe as well.


  • You will understand how a stripe chargeback protection works 
  • You will learn how a stripe chargeback protects merchants’ revenue 
  • Understanding how stripes handle chargeback and the Stripe chargeback limit
  • You find answers to some frequently asked questions on stripe chargeback protection
Stripe chargeback protection

What is stripe chargeback protection?

Stripe Chargeback Protection defends people’s businesses from the unpredictability of disputes. If their business faces a fraudulent dispute, the platform will cover the disputed amount and waive any dispute fees—no evidence submission is required. Chargeback Protection costs just 0.4% per transaction.

Chargeback Protection is a feature of Radar that automatically disputes chargebacks on behalf of the merchants. The platform uses machine learning and dynamic programming to evaluate the charges and decide whether they should be disputed.

If the Stripe platform decides to dispute the chargeback, the platform will have to will provide evidence to the cardholder’s bank that the charge is valid. The evidence can include customer order forms, shipping records, and other supporting documentation uncovered by Stripe’s software.

How Stripe Chargeback Protection Works

Stripe chargeback protection is an offshoot of Stripe Radar, the company’s AI-driven fraud detection system. Radar helps in fraud prevention, while Stripe Chargeback Protection protects merchants from the fallout of chargebacks.

Stripe fraud protection that is offered through Radar helps find and block fraud. The service provider uses machine learning and dynamic algorithms that train on data across millions of companies worldwide.

During eCommerce transactions, stripes identify high-risk buyers. While low-risk buyers/ people go through a fast-tracked checkout process, fraudulent transactions require the customer or clients to submit extra information and might be declined. Radar is integrated into the platform (Stripe) and requires no additional setup.

While fraud prevention is always the better option, a few chargebacks may still get filed regularly. Without protection, people will need to respond to a Stripe chargeback like any other: compile evidence (copies of your return policies, receipts, proof of delivery, etc.) and submit it through the platform (Stripes) Dashboard. People will be charged a fee of $15 to do this. 

Stripe Chargeback Limit

The stripe platform limits the chargeback payouts to $25,000 each calendar year. The actual dispute amount and waived dispute fees count toward the limit.

The Stripe platform charges a $15 dispute fee for all chargebacks, but if the merchant wins the dispute, the fee would be refunded by the Stripe platform along with the disputed amount.

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How Stripe Chargeback Protection Defends Merchant Revenue

With Stripe Chargeback Protection, the merchant’s sales are safeguarded against fraudulent disputes. The platform will reimburse people for the waive and amount of dispute fees on qualifying transactions.

When a chargeback is filed against a protected charge, the Stripe platform does not require people to compile evidence to prove the transaction was legitimate. Instead, if their account is in good standing and they are below Stripe’s “protection limit,” Stripe will cover their costs.

They are not involved in the dispute process at all. Stripe reimburses people for the disputed transaction, waives any chargeback fees, and decides if they want to contest the chargeback. People give Stripe the right to challenge fraudulent disputes on their behalf. Beyond that, their participation is not required.

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How Stripe Handles Chargebacks

The Stripe service provider platform uses machine learning and dynamic algorithms that train on data across millions of companies worldwide.

During eCommerce transactions, stripes identify high-risk buyers. While low-risk buyers/ people go through a fast-tracked checkout process, fraudulent transactions require the customer or clients to submit extra information and might be declined. 

 The Stripe platform uses Radar’s machine learning technology to prevent fraud. Stripe will reimburse the disputed amount and any chargeback fees if a charge is disputed later. Skip evidence collection: Previously, companies had to identify and submit the proper evidence to fight a chargeback.

How long can someone wait to charge back on Stripe

People usually 120 days, but specific policies vary depending on the payment card issuer, and there are exceptions to the 120-day limit.

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Chargeback Protection is a valuable and needed service that can save merchants money and time by automating the chargeback dispute process and helping merchants prevent future fraudulent charges. Using the Stripe Radar, Chargeback Protection allows businesses to optimize their payment processes and reduce fraud proactively.

While the added protection can be a good asset for businesses, it’s crucial to remember that a high rate of chargebacks might highlight an underlying issue with a company that the protection feature will not be able to fix.


Does Stripe protect against chargebacks?

The Stripe Chargeback Protection platform defends people’s businesses from the unpredictability of disputes. 

How many chargebacks are you allowed Stripe?

The Stripe platform follows card network limits for this. The standard monthly threshold in the VDMP (Visa Dispute Monitoring Program) is a 0.9 % chargeback ratio and 100 chargebacks.

Does Stripe have purchase protection?

Yes it does

Is it better to use Stripe or PayPal?

While both platforms specialize in online payment processing (over in-person transactions), the PayPal platform is said to be better suited for new or small businesses just getting started. In contrast, the Stripe platform is a better fit for larger companies as it provides more options for payment customization. 

How reliable is Stripe?

E-commerce specialists and web developers regularly recommend the Stripe platform. It has a 4.7-star rating on Capterra and more than 2,000 reviews. Negative reviews talked about problems with unwarranted customer refunds and support.

You can learn more from the video below:

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