Chargeback

A chargeback is a forced reversal of a completed card payment, initiated by the cardholder through their bank rather than by the merchant. The customer tells their issuer they don't recognize or don't accept a charge, and the issuer pulls the money back from the merchant. It's the card networks' consumer-protection mechanism, and it's the mechanism behind a Stripe dispute.

How a chargeback happens

1. A cardholder contacts their bank to challenge a charge — for fraud, "item not received," "not as described," or a billing error.
2. The issuer provisionally reverses the payment and debits the merchant, usually adding a dispute fee.
3. The merchant can accept the loss or fight it by submitting evidence — a process called representment.
4. The issuer reviews the evidence and rules for the cardholder or the merchant.

In Stripe, this whole flow is represented by a Dispute object, and it opens with the charge.dispute.created event.

Chargebacks vs refunds

A refund and a chargeback both return money to the customer, but they're very different. A refund is voluntary — the merchant issues it directly and keeps control. A chargeback is involuntary, forced by the bank, and typically costs the merchant a non-refundable fee on top of the reversed amount, even if they later win.

Why chargebacks matter

• Direct cost — the reversed amount plus the fee, and staff time to respond.
• Chargeback rate — card networks monitor your ratio of chargebacks to transactions; exceed the threshold and you enter a monitoring program with penalties.
• [Friendly fraud](/glossary/friendly-fraud) — a large share of chargebacks are legitimate purchases the buyer disputes anyway, which is why clear descriptors and good records matter.

Catching disputes the moment they open gives you the most time to gather evidence before the response deadline.