Understanding Disputes

In this support article:

What are Disputes?
Standard Dispute Process
Dispute Timing
Overturning a Dispute
Typical Dispute Reasons (what your customer may select with they file a dispute)

What Are Disputes?

A dispute (also known as a chargeback) occurs when a cardholder questions a payment made to your business through their card issuer.

To initiate a chargeback, the issuer (customer) creates a formal dispute on the card network which will immediately reverse the payment, pulling the money for the payment - as well as one or more network dispute fees-from Stripe. After, Stripe debits your balance for the payment amount and dispute fee.

Standard Dispute Process

Below you'll find the standard dispute process. Visit our support article to learn more on how Union handles disputes.

The customer’s bank notifies Stripe of the dispute. The bank then creates a formal dispute on the card network, reversing the payment.
The customer’s bank deducts the disputed amount and a dispute processing fee (Union’s fee is $15) from Stripe.
Stripe then debits your balance for the payment amount and dispute fee. This will appear in your transfers report within your Union account.
Stripe notifies Union of the dispute, providing all information received from the issuer’s bank.
Your business has the opportunity to submit evidence to prove the charge was legitimate and potentially overturn the dispute.
- Union handles this process on your behalf and may contact you for additional information if necessary. See How Union Handles disputes for more details.
Once submitted, the customer’s bank will review the evidence and determine the validity of the dispute. The outcome of the dispute is decided entirely by the customer’s bank; neither Stripe nor Union have any influence over this decision.
If the bank decided to rule in favor or the business, the dispute will be considered "won" and you (the business) will be returned the dispute amount minus the $15 processing fee. If the dispute falls in the customer's favor, nothing will happen (the funds have already been deducted).

Timing

Card networks typically allow cardholders to initiate disputes within 120 days of the original payment, but their rules allow more time in some situations. Certain industries, such as travel or event ticketing—where the payment might be made long before the event occurs—are prone to longer time intervals between the original purchase and a dispute. Generally speaking, when a customer makes a payment for something that will happen in the future (like a vacation reservation, a professional services appointment, or an event ticket), the clock starts on the date of the event, not the date of the payment.

Following the creation of the chargeback, the business will have a limited amount of time (usually 7-21 days, depending on the card network) to respond to the card issuer to choose on how they want to handle the dispute:

Submit evidence in hopes to overturn the dispute
Immediately accept the dispute

For this reason, Union will take immediate action by either gathering evidence to overturn the dispute or contact the studio directly for direction/assistance.

If Union does submit evidence (at all times unless we speak with the business owner directly), the bank issuer also has a limited amount of time (usually 60–75 days, depending on the card network) to evaluate the evidence and decide the outcome.

The full lifecycle of a dispute, from initiation to the final decision from the issuer, can take as long as 2-3 months to complete. There are no actions a business can take to reliably accelerate this timeline, other than to decline to contest the dispute by accepting it.

At the completion of the dispute process, the issuer either overturns the dispute in your favor or upholds the dispute in their cardholder’s favor.

If the issuer overturns the dispute, they return the debited chargeback amount to Stripe, and Stripe passes this amount back to you.

If the issuer upholds the dispute, nothing changes from your perspective and no money moves—Stripe credited the issuer when they initiated the chargeback. The issuer will return the funds to the cardholder at some point during—or even after—this process. The timing of the cardholder’s credit is entirely at the issuer’s discretion.

How to Overturn the Dispute

As soon as a dispute is active, the only way to overturn it is by submitting evidence in a response.

Even in cases where your customer claims to have withdrawn the dispute, you/Union must respond with evidence for the dispute to be closed in your favor. Submitting evidence is what signals to the issuer that you don’t accept the dispute and want to have the funds returned to you.

What is a withdrawn dispute

A withdrawn dispute is if you have communication from your customer that they have contact their bank issuer and withdrawn the dispute.

It's important to note that this doesn't necessarily count as a won dispute. A withdrawn dispute is otherwise no different from any other dispute.

It doesn’t resolve as a win or loss more quickly than other disputes.
It still counts against your dispute rate with the network.

Cardholders can only withdraw fully financial disputes—that is, a chargeback, where your account balance has been debited. They can’t withdraw an Early Fraud Warning or an inquiry, which don’t have financial impact. The cardholder might decline to escalate these, but can’t undo them.

Reasons for Disputes

Disputes can arise for various reasons when an account owner contacts their bank to contest a payment. While the specifics may vary slightly across different card networks, the following are common reasons for disputes:

Duplicate Charge: The customer believes they were charged more than once for the same product or service.
Fraudulent Transaction: The customer claims the charge was unauthorized or made with a stolen card.
Product Not Received: The customer asserts they did not receive the product or service they paid for.
Product Unacceptable: The customer is dissatisfied with the product or service, finding it significantly not as described or defective.
Subscription Canceled: The customer claims they were charged after canceling a subscription.