Chargeback protection for Stripe and Shopify brands

Stripe announced Chargeback Protection in June 2019 at 0.4% per transaction, for businesses in the US and Europe using Stripe Checkout. If a protected charge is disputed as fraud, Stripe covers the disputed amount and the chargeback fee whether or not it fights the dispute.

The terms that govern it are narrower than the announcement suggests:

• It covers credit card charges your customers submit through Stripe Checkout. A custom payment form or an invoice isn't covered.
• It covers fraud disputes only, meaning the cardholder says they didn't authorize the charge: Visa 10.4, Mastercard 4837 and 4840, Discover, Diners and JCB UA02, and a short list of Amex codes. "Item not received", "not as described", and canceled-subscription disputes stay yours.
• Stripe sets a protection limit and can change it. Amounts above the limit are yours.
• Charges you told Stripe to push through after a fraud flag aren't covered, and neither is routing risky orders away from Checkout so only the safe ones get protected.
• New accounts can go through an evaluation period where Stripe holds fraud dispute amounts until you pass its credit and fraud checks.
• If Stripe fights a covered dispute and wins, the money stays with Stripe.

The terms say the fee is whatever Stripe communicates to you by email or in the Dashboard, and Stripe's current pricing page doesn't list the product at all. Check your Dashboard for the rate you'd actually pay.

A fee on every transaction only pays off if your fraud chargebacks cost more than the fee. Stripe charges a $15 fee for each dispute you receive, and another $15 for each one you counter manually, which comes back if you win.

An illustrative example: at a $60 average order, 0.4% is 24¢ an order. A fraud chargeback costs you the $60 plus the $15 fee, so you break even at about 0.32 fraud chargebacks per 100 orders. Below that, you pay more in fees than you get back. The product you shipped is gone in both cases, so leave it out of the comparison.

Run the same arithmetic on your own fraud dispute rate by charge date, which Stripe shows on the Radar page, before you switch it on. If most of your disputes are non-fraud, protection doesn't touch them.

Shopify Protect is free. It protects eligible orders against fraudulent and unrecognized chargebacks, reimburses the order amount and the chargeback fee, and Shopify handles the dispute. The eligibility rules decide how much of your volume it actually covers:

• You have to be in the US with a US Shopify Payments account.
• The order has to go through Shop Pay. Shop Pay Installments orders aren't eligible.
• Every item has to be physical and shipped. One digital product or in-store pickup item disqualifies the order.
• You have to fulfill with valid tracking from a supported carrier within 7 days, and the package has to be in transit within 10.
• Changing the shipping address after checkout voids it.
• Subscription orders are covered on the first order only.

Shopify's chargeback fee on Shopify Payments in the US is $15, returned if you win. Filter your orders by protection status in the admin to see what share of last quarter's orders were covered. If most of your customers don't check out with Shop Pay, most of your orders aren't covered.

Outside Stripe and Shopify, a category of fraud-screening vendors sells what gets searched for as chargeback insurance or a chargeback guarantee. The model is similar across them. The vendor screens every order and returns approve or decline. If an order it approved turns into a fraud chargeback, the vendor pays you back. You pay a percentage of approved volume.

That incentive cuts both ways. The vendor eats the fraud losses, so it gains from declining borderline orders, and you never see the good customers it turned away. Those are false declines, and they rarely show up in the vendor's reporting.

Questions worth asking before you sign:

• Which reason codes are covered, and are "item not received" or friendly fraud claims included or excluded?
• Is there a cap on reimbursement per month or per order?
• What approval rate will they commit to on your traffic, and can you test it on a slice of orders first?
• Can you export every decision with its reason, so you can audit what they declined?
• Do they still let you take card network alerts and refund before a dispute lands?

Protection moves the cost of a fraud chargeback to someone else. The chargeback still happens, and the card networks still count it. Stripe's documentation says monitoring programs don't consider dispute outcomes, and that Mastercard counts a chargeback regardless of refund, liability shift, or outcome.

Visa Acquirer Monitoring Program (VAMP)

Since June 2025, Visa has run one program for fraud and disputes on card-not-present transactions. The VAMP ratio is fraud reports (TC40) plus disputes (TC15), divided by settled transactions in the month. A merchant in the US, Canada, EU or Asia Pacific is Excessive at a ratio of 1.5% or more with at least 1,500 fraud reports and disputes in the month. That threshold dropped from 2.2% on April 1, 2026.

Three details catch brands out:

• Fraud reports count even when no dispute follows. Stripe calls these early fraud warnings, and a transaction that gets both a fraud report and a dispute counts twice.
• Disputes resolved through pre-dispute products, such as Verifi's Rapid Dispute Resolution, are excluded from the count.
• Your acquirer's whole portfolio is flagged at 0.5% and 0.7%, so your processor has reason to call you well before you reach 1.5%.

Mastercard Excessive Chargeback and Excessive Fraud programs

Mastercard divides a month's chargebacks by the previous month's transactions. You're an Excessive Chargeback Merchant at 100 or more chargebacks and a ratio of 1.5% or more, and a High Excessive Chargeback Merchant at 300 or more and 3%. Fines start in the second month, and you exit after three consecutive months below the threshold.

The separate Excessive Fraud Merchant program flags merchants with at least 1,000 ecommerce transactions, more than $50,000 in fraud chargebacks in the month, a fraud chargeback rate above 0.5%, and 3D Secure on 10% or less of Mastercard volume in non-regulated markets like the US. Running 3D Secure on more than a tenth of your volume takes you out of reach of that program.

Stripe also notes that the industry treats dispute activity above 0.75% as excessive, and that a sudden spike can get you flagged before you get there.

Since protection doesn't lower your ratio, the cheaper move at $10M+ is to stop disputes before they're filed. Most of it is setup work you do once.

• Set a statement descriptor customers recognize, such as your domain. Stripe allows 5 to 22 characters. Visa identifies your account by the static part of your descriptor, so a brand with several descriptors can show up as several accounts.
• Take card network alerts. Ethoca, now part of Mastercard, and Verifi's Rapid Dispute Resolution for Visa tell you a dispute is coming so you can refund first. RDR can refund automatically on rules you set, and disputes resolved that way don't count toward your Visa ratio. Don't refund manually on top of an RDR case, or you pay twice.
• Refund payments flagged by an early fraud warning that you haven't shipped. It saves the dispute fee and the product.
• Authorize at checkout and capture after review. Issuers have to report fraud on a captured payment even if you refund it, but not on an authorization you reverse before capture.
• Show your refund and cancellation policy in full at checkout and have the customer agree to it. Stripe warns that issuers may not accept a checkbox that only links to the policy as evidence.
• For subscriptions, put a cancel button in the account page and send a reminder before each renewal. Stripe suggests 7 days before a yearly renewal and 2 to 3 days before a monthly one.
• Ship with tracking and send the tracking number as soon as you have it.

Fraud chargebacks come from orders your fraud rules let through. The same rules, set too tight, decline good customers, which is the other half of the problem and is covered in the false declines guide.

Chargebacks are one of four leaks in the Payments Leak Calculator, next to declined checkouts, failed renewals, and processing fees. Put in your chargebacks per 100 orders and your fee per chargeback, and it shows what preventing or winning a share of them is worth a year.

Find your payments leak