Short answer
A card payment reversed by the cardholder's bank after the cardholder disputes it, for fraud, a missing product or a billing problem.
A chargeback (also called a dispute) pulls the money back from the merchant and adds a fee. On Stripe that’s $15 when the dispute opens, and another $15 if you counter it with evidence, refunded only if you win. The bigger costs are the lost revenue, the goods already shipped and the time spent responding.
High dispute rates also bring card network monitoring programs, reserves and even account closure. See chargeback and dispute costs at scale.
Part of our guide to chargeback and dispute costs.
Related terms
- Visa VAMP: The Visa Acquirer Monitoring Program, which tracks merchants' fraud and dispute rates together and penalizes those above Visa's thresholds.
- Rolling reserve: A share of each day's card sales that a processor holds back for a set period, as protection against future refunds and chargebacks.