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Stripe: Delving into Its Dispute Resolution Mechanism

Modernization inevitably induces various forms of paradigm transformation. Among these is payment. Countries around the globe are transitioning from traditional forms of payment to digitized ones and are evolving into cashless societies.

Consequently, third-party payment platforms are evolving. One of the most notable payment gateway providers is Stripe, an online payment processing and commerce solution company. Stripe has become prominent not only due to its efficient and effective payment technologies but also due to its dispute resolution mechanism.

So, how does Stripe’s dispute resolution mechanism work?

Stripe’s Dispute Resolution Mechanism

Online transactions are prone to disputes. After all, it requires processes and confirmation to authorize payment for a transaction. There are five main situations where customers dispute a settlement.

These are:

  • Forgotten payment
  • Undelivered product
  • Unreceived product
  • Unacceptable condition of the package
  • Canceled subscription, yet the subscription fee remains charged
  • The customer does not recognize the business name on their statement.

When there’s a dispute, Stripe exhibits it in the dashboard. Businesses commonly have 7-21 days to respond to the altercation. Stripe does not give a final verdict in the dispute. Instead, it leaves the decision to the card issuer or the bank that administers the customer’s credit card account. There are three ways to approach dispute resolution:

  • Customer payment dispute withdrawal
  • The business accepts the dispute and refunds the amount
  • The card issuer makes a decision.

Benefits of utilizing Stripe

Stripe is one of the most popular third-party payment platforms for online businesses. It caters to businesses of all sizes. It offers efficient and faster payment transactions. Additionally, utilizing Stripe automates tedious manual tasks like:

  • Sending payments
  • Receiving payments
  • Financial record documentation.

Another advantage of using Stripe is its dispute resolution system. It allows businesses to resolve a dispute faster through facilitating communications between the parties. It enables efficient verification as to shipping and evidence of delivery. This is of immense help, especially when the customer claims they never received the product.

Another handy feature of Stripe is its dashboard. It systematically exhibits disputes for businesses to manage them quickly and efficiently. It is a very helpful tool when disputes arise.

Dispute Prevention Strategies

Stripe offers efficient mechanisms to settle disputes. However, it does not prevent them from arising. Consequently, businesses must take proactive measures to ensure that altercations don’t occur in the first place or, at least, to minimize them.

Every business knows the importance of dispute prevention mechanisms. Proactive measures minimize the occurrence of these disputes. This saves time and company resources. It also boosts a company’s reputation by providing measures to encourage customer satisfaction and goodwill.

Terms and Conditions

The terms and conditions of contract are a feature of every transaction that involve a customer making a purchase. Consequently, having well-drafted terms and conditions is important for every online business. It can lessen disputes or clarify the procedure for settling disputes and also a business can rely on the terms to manage a dispute.

In general, terms and conditions include:

  • Shipping mechanics, including courier options
  • Transfer of responsibility to the customer after the shipping process
  • Refundable situations.

Terms and conditions can also be the deciding factor if the customer pursues the dispute through Stripe and the dispute goes to the card issuer for decision-making.

Tracked Shipping

Tracked shipping does cost a company, but it is worth the outlay, especially when settling disputes. It provides supported documentation of the passage of a parcel when a customer claims they never received the parcel. Businesses can provide evidence of tracking to prove that delivery was successful.

Tracked shipping is also one of the most effective ways to provide an answer and a solution to customers in lost-in-transit claims. The tracking documentation will allow businesses to settle disputes as quickly and hassle-free as possible.


Another proactive strategy is having appropriate business insurance. Insurances are convenient in refund and reimbursement scenarios, protecting the company’s financial resources through minimizing risk.

Because Stripe does not arrange for insurance, companies must seek help from a good insurance broker. That way, the company will not run the risk of resource depletion through not having insurances that a prudent business would be expected to put in place.

Key Takeaways

  • Stripe offers features that benefit internet businesses of all sizes. It automates arduous manual tasks and increases the overall efficiency of transactions.
  • Another unique feature of Stripe is its payment dispute resolution mechanism. Not only does it provide a channel for constant communication with the business and card issuer, but also has a dashboard that exhibits disputes for easier tracking and management.
  • While the feature is powerful when a dispute arises, it does not prevent payment altercations from happening in the first place. Consequently, a business still needs to take proactive measures to avoid disputes. Among the most effective proactive strategies are having well-drafted terms and conditions, implementing tracked shipping, and investing in business insurance.

Key takeaways:

  • the increase of academic institutions globally use LMS for eLearning
  • content creators must protect their IP rights through appropriate agreements.


Jaclyn-Mae Floro, BCompSc

Contact W3IP Law on 1300 776 614 or 0451 951 528 for more information about any of our services or get in touch at

Disclaimer. The material in this post represents general information only and should not be taken to be legal advice.

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