Refunded But Still Charged Dispute Fee: Why & What to Do

Stripe charges a $15 dispute fee even if you refund the customer. This is because the dispute was already filed with the card network, triggering processing costs. Refunding BEFORE a dispute is filed avoids the fee entirely.

Why You’re Charged After Refunding

The Dispute Timeline

What happened:

Customer purchased - Transaction processed
Customer contacted bank - Filed dispute (not you)
Bank notified Stripe - Dispute officially filed
Stripe charged you $15 - Dispute processing fee
You refunded - Too late, dispute already filed

Key point: The dispute fee is charged when the dispute is filed, not when it’s resolved.

Card Network Fees

Why Stripe charges $15:

Card network fees: Visa/Mastercard charge Stripe for dispute processing
Administrative costs: Stripe’s dispute handling system
Non-refundable: Even if you win or refund, networks already charged Stripe

Stripe passes these costs to you.

When Dispute Fees Are Waived

Inquiry vs. Dispute

Inquiry (no fee):

Customer contacts bank with question
Bank requests information from Stripe
You respond, customer satisfied
No dispute filed = No fee

Dispute (fee charged):

Customer formally disputes with bank
Chargeback initiated
Funds reversed from your account
Dispute filed = $15 fee

You can’t control which path the customer takes.

Winning the Dispute

If you win:

Transaction amount returned to you
Dispute fee is NOT refunded
You paid $15 to keep the transaction

Net result: Transaction amount - $15 fee

Stripe Radar Blocks

If Stripe Radar blocks a fraudulent transaction:

No dispute filed (blocked before processing)
No dispute fee
This is prevention, not dispute resolution

How to Avoid Dispute Fees

1. Proactive Refunding (Before Disputes)

Customer complaint triggers:

Customer emails: “I want a refund”

Action: Refund same day
Result: No dispute filed = No $15 fee
Cost: Transaction amount only

Customer emails: “Package never arrived”

Action: Check tracking, refund if unclear
Result: No dispute filed = No $15 fee
Cost: Transaction amount only

Customer emails: “I canceled but was charged”

Action: Verify, refund if legitimate
Result: No dispute filed = No $15 fee
Cost: Transaction amount only

Proactive refunding is always cheaper than dispute fees.

2. Excellent Customer Service

Prevent disputes at source:

Respond fast to customer inquiries (within 24 hours)
Easy refund process (no hoops to jump through)
Clear policies displayed at checkout
Proactive communication (shipping updates, delays)

Result: Customers contact you first, not their bank

3. Clear Billing Descriptors

Problem:

Customer sees “XYZ LLC” on statement
Doesn’t recognize it
Files dispute for “unauthorized transaction”

Solution:

Use recognizable business name
Include website or phone number
Result: Customer recognizes charge, no dispute

4. Dispute Prevention Tools

Stripe tools:

Stripe Radar: Blocks fraudulent transactions before processing
3D Secure: Shifts liability to issuer for fraud disputes
AVS/CVV: Reduces fraud risk

Result: Fewer disputes = Fewer fees

Cost Comparison

Scenario: $100 Transaction, Customer Wants Refund

Option 1: Customer contacts you, you refund

Refund: $100
Processing fee lost: $3.20
Dispute fee: $0
Total cost: $103.20

Option 2: Customer files dispute, you refund

Refund: $100
Processing fee lost: $3.20
Dispute fee: $15
Total cost: $118.20

Difference: $15 more expensive if customer disputes first

Option 3: Customer files dispute, you fight and win

Transaction kept: $0
Processing fee lost: $0
Dispute fee: $15
Time cost: 3 hours × $50 = $150
Total cost: $165 to save $100 transaction

Proactive refunding is cheapest.

What to Do If Already Charged

1. Accept the Fee

Reality:

Dispute was filed, fee is non-refundable
Fighting with Stripe won’t change it
Move on and prevent future fees

2. Refund the Customer

Even though fee is charged:

Refund resolves the dispute
Prevents dispute rate increase
Maintains customer relationship
Cheaper than fighting and losing

3. Learn and Prevent

Root cause analysis:

Why did customer dispute instead of contacting you?
Was refund process unclear?
Was customer service unresponsive?
Was billing descriptor confusing?

Fix the root cause to prevent future disputes.

Minimizing Dispute Fees

Monthly Dispute Fee Budget

Calculate your exposure:

Current state:

10 disputes per month
$15 fee per dispute
Monthly cost: $150 in dispute fees

Target state:

2 disputes per month (proactive refunding)
$15 fee per dispute
Monthly cost: $30 in dispute fees

Savings: $120/month = $1,440/year

ROI of Proactive Refunding

Investment:

Hire customer service rep: $3,000/month
Respond to all inquiries within 24 hours
Proactive refunding for complaints

Return:

Dispute fees saved: $150/month
Dispute rate improvement: Avoid Stripe holds
Customer satisfaction: Repeat business

Net benefit: Massive (avoiding holds alone justifies cost)

Clear Verdict

Stripe dispute fees are charged when disputes are filed, not resolved.

To avoid fees:

✅ Refund before disputes - Customer contacts you first
✅ Excellent customer service - Respond within 24 hours
✅ Clear billing descriptors - Recognizable business name
✅ Easy refund process - No friction
✅ Proactive communication - Shipping updates, delays

Once dispute is filed:

✅ Accept the $15 fee - It’s non-refundable
✅ Refund the customer - Resolve dispute quickly
✅ Fix root cause - Prevent future disputes
✅ Track patterns - Identify systemic issues

Proactive refunding is always cheaper than dispute fees.

Assess Your Dispute Risk (30 seconds)