What Should I Do If Stripe Warns My Dispute Rate Is Too High?

If Stripe warns you about disputes, understand the difference between dispute rate (tied to when the payment happened) and dispute activity (when disputes arrive). Winning a dispute recovers revenue but does not remove it from these numbers. Focus on what creates disputes upstream and stop preventable ones.

One of the most important numbers to understand if Stripe warns you about your disputes is your dispute activity.

Dispute rate and dispute activity sound interchangeable, but they're measuring different things. Dispute rate attributes disputes back to when the original payment happened. Dispute activity looks at disputes based on when they arrive.

That difference can create two very different pictures of the same business.

Imagine you process 1,000 payments this month and receive 10 disputes. Only three of those disputes relate to payments made this month. The other seven come from older transactions.

Your dispute rate for this month's payments could be 0.3%. Your dispute activity could be 1%.

We are talking about the same business, period, but very different indications of risk. This matters because if you're trying to understand what's causing the problem, your dispute rate can help you trace disputes back to the transactions that generated them.

If you're trying to understand your current exposure, you need to pay attention to dispute activity - and there's another important distinction merchants sometimes miss.

Winning a dispute doesn't make it disappear from these numbers. Once the dispute has been filed, it's counted. Winning it can recover the revenue, but it doesn't undo the dispute itself.

What to look at when Stripe warns you

If Stripe warns you that your dispute activity is becoming too high, you need to understand what's creating the disputes upstream. I'd start by looking at:

• Which products or services generate the most disputes
• Whether particular customer cohorts or geographies stand out
• How much is genuine fraud vs customer confusion
• Whether billing descriptors and subscription terms are clear
• Whether fulfilment or delivery issues are contributing
• Which fraudulent transactions are getting through your controls

More importantly, I'd look at the trajectory. A business with relatively low dispute activity that's climbing quickly can have a very different risk profile from one that's been stable for months.

The biggest takeaway for me is prevention. If your dispute activity is becoming a problem, the objective is to stop as many preventable disputes as possible from happening in the first place.

For review-specific guidance, see how to pass a Stripe account review after chargebacks. Also read how it works, pricing, and the FAQ.

If you want help classifying what's driving disputes on your data, book a demo.