What Stripe Chargeback Protection and Smart Disputes cover
Stripe sells two different things that merchants often lump together.
Chargeback Protection is the insurance product. Stripe's launch announcement priced it at 0.4 percent per transaction for US and European businesses using the latest version of Stripe Checkout. Its legal terms, last updated June 3, 2019, limit cover to "Fraud Disputes", meaning the cardholder says they did not authorize the charge, matched by reason codes such as Visa 10.4 and Mastercard 4837. Disputes about goods not received, not as described or a canceled subscription are excluded. So are charges above a protection limit Stripe sets, charges you push through after a risk warning, and charges from new merchants during an evaluation period of unspecified length.
Smart Disputes is the response product. Stripe prepares evidence with its own data and submits it, and its pricing page lists a fee of 30 percent of the disputed amount for each dispute you win, with nothing charged on losses. Stripe waives the 15 USD counter fee when you counter through Smart Disputes, but the 15 USD fee for receiving a dispute still applies.
Stripe Chargeback Protection, Smart Disputes and NoChargeback side by side
| Stripe Chargeback Protection | Stripe Smart Disputes | NoChargeback | |
|---|---|---|---|
| What it is | Insurance that reimburses covered disputes | Automated evidence and submission inside Stripe | Prevention, alerts and evidence packs across processors |
| Price | 0.4 percent of each protected transaction | 30 percent of the disputed amount on each won dispute | Flat plan from 49 USD a month, 149 USD a month for Growth billed yearly |
| Dispute types covered | Fraud disputes only, by reason code | Card disputes Stripe marks as eligible, by reason code, evidence and cost | Every reason code, with letters drafted per code |
| Payments covered | Stripe Checkout only | Stripe payments only | Stripe plus Shopify, PayPal and Braintree from Growth, Checkout.com, Adyen and Authorize.net on Scale |
| Recurring and subscription disputes | Not covered when the claim is "canceled recurring" or not received | Answered when Stripe marks them eligible | Answered, with subscription usage and cancellation evidence |
| Money back if you lose | Yes, for covered fraud disputes | No | No, NoChargeback is not insurance |
| Ratio monitoring | Not part of the product | Not part of the product | Visa VAMP and Mastercard ECM monitor with warnings at 70 and 90 percent of the threshold |
| Best fit | Checkout sellers whose disputes are almost all card fraud | Stripe only merchants with few disputes and low order values | Stores with several disputes a week across one or more processors |
Where the break even sits
This is list price math, not a promise of results.
- 1 Chargeback Protection at 0.4 percent equals 149 USD a month at about 37,250 USD of monthly Checkout volume. Above that, the flat Growth plan billed yearly costs less than the insurance fee alone.
- 2 At 100,000 USD a month the insurance fee is about 400 USD a month, or 4,800 USD a year. Growth billed yearly is 1,788 USD a year.
- 3 Smart Disputes at 30 percent equals 149 USD once you win about 497 USD of disputes in a month. Five won disputes at 100 USD each already cost more than Growth.
- 4 The insurance only pays back fraud disputes. If half your disputes are friendly fraud or "item not received", that half was never covered, and you still pay 15 USD per dispute received plus the lost amount.
Run the four lines with your own numbers from the Stripe dashboard: total Checkout volume, disputes by reason and won amount for the last three months. The full fee picture for every Stripe dispute is in the Stripe dispute fee breakdown.
When Stripe's own products may fit better
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You sell high ticket items through Stripe Checkout, nearly all your disputes are stolen card fraud and you want a guaranteed reimbursement rather than a chance to win.
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You have only a handful of disputes a year, so 30 percent of a few wins through Smart Disputes is less than any monthly plan.
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You do not want to connect any outside app to your Stripe account.
What a Stripe merchant gets with NoChargeback
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Evidence for every dispute type. NoChargeback reads the charge, customer, invoice, subscription and 3D Secure outcome from Stripe and builds the evidence pack for the exact reason code, not only fraud.
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Early fraud warnings handled on time. When Stripe Radar flags a charge, you see whether a refund now costs less than the dispute that usually follows. The logic is on the prevention rules page.
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Network alerts before the dispute. On Scale, Mastercard Ethoca and Verifi CDRN alerts plus Visa RDR rules stop many disputes before they count against you. Details on chargeback alerts.
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Your ratio in view. The chargeback ratio monitor tracks Visa VAMP and Mastercard ECM so a bad month never surprises you.
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Read access plus dispute write only. NoChargeback cannot refund, charge or move money. The scope is listed on the Stripe integration page.
How to switch from Stripe Chargeback Protection
- 1 Connect Stripe with Stripe Connect or a restricted key. It takes a few minutes and needs no developer.
- 2 Let NoChargeback import your open disputes and recent early fraud warnings, so you can see how many of them Stripe's protection would actually have covered.
- 3 Set dispute automation rules for your top reason codes and pick which ones submit automatically.
- 4 End Chargeback Protection in your Stripe settings once your evidence packs are flowing. Read the termination section of Stripe's terms first, so you know how disputes on older charges are handled.
- 5 Watch the first month of disputes and ratios side by side, then decide whether you need network alerts on Scale.
How much does Stripe Chargeback Protection cost?
Stripe Chargeback Protection costs 0.4 percent of each protected transaction, according to Stripe's launch announcement, charged on top of normal processing fees. It applies to payments made through Stripe Checkout. Stripe's terms say the exact fee is the one shown in your dashboard or sent by email, so check your account before you budget.
What does Stripe Chargeback Protection not cover?
It covers fraud disputes only. Stripe's terms exclude disputes over goods not received, not as described, canceled subscriptions and other non fraud reasons. Charges above Stripe's protection limit, charges you approve after a risk warning and charges from new merchants in the evaluation period are also excluded.
Is Stripe Chargeback Protection worth it?
It is worth it when nearly all your disputes are card fraud and fraud losses run above 0.4 percent of your Checkout volume. If most disputes are friendly fraud or delivery claims, you pay the fee on every sale and still lose those disputes. A flat plan that prevents and answers every type usually costs less.
How much does Stripe Smart Disputes cost?
Stripe Smart Disputes costs 30 percent of the disputed amount for each dispute you win, with no Smart Disputes fee on lost disputes. The 15 USD fee for receiving a dispute still applies, while the 15 USD counter fee is waived when you counter through Smart Disputes. The full cost math is in Stripe Smart Disputes pricing.
What is the best alternative to Stripe Chargeback Protection?
For merchants with several disputes a week, a flat priced tool that prevents disputes and answers every reason code. NoChargeback Growth covers five accounts, 100 disputes and 1,000 alerts for 149 USD a month billed yearly, less than the 0.4 percent fee on about 37,250 USD of monthly Checkout sales.