5-50 chargeback fee, and rates your merchant account negatively.
The Stripe chargeback ratio formula:
Chargebacks ÷ total transactions over rolling 90-day period
Below 0.7%: healthy
0.7-1.0%: monitor (Stripe may inquire)
1.0-1.5%: formal warning, account review
Above 1.5%: account closure risk
Stripe's automated systems are aggressive in 2026. Many AU dropshippers received "your account is at risk" emails after a single bad month at 0.9% chargeback rate.
What causes chargebacks
Five primary causes account for 80% of dropshipping chargebacks:
Slow CS response times. Customer waits 48+ hours for a response, gives up, files chargeback (35% of cases).
Late delivery without proactive communication. Order takes longer than advertised; customer assumes scam (20%).
Product not as described. Customer feels misled (15%).
Friendly fraud (customer doesn't recognise charge). Customer didn't remember buying or thought it was their partner; reflexively disputes (15%).
Actual fraud. Stolen card or fraudulent order (15%).
The first 3 causes — accounting for 70% of chargebacks — are entirely within your operational control. Fix CS response times, communicate proactively about shipping, and write accurate product descriptions, and chargeback rates drop below 0.5%.
The prevention stack
Three layers of chargeback prevention:
Layer 1: CS response times (Module 16.1). 4-hour SLA. Customers who get a fast response don't escalate to chargebacks. This single fix accounts for 35% of chargeback prevention.
Layer 2: Proactive shipping communication. Send 3 emails per order:
Order confirmation immediately
Shipping notification when order ships (with tracking)
"Your order should be arriving soon" 1 day before estimated delivery
Customers who receive proactive updates file chargebacks 60% less often than those who don't. Klaviyo handles this automatically.
Layer 3: Soft descriptor on Stripe. "Soft descriptor" is the line that appears on customer's bank statement. Default Stripe descriptor is your business name. Custom descriptor can include phone number or email for direct customer contact.
E.g., "BRAND.COM 0298765432" instead of "Stripe.Charge"
A customer seeing "BRAND.COM" with a phone number is much more likely to call you before disputing than if they see a generic charge they don't recognise. Drops "friendly fraud" chargebacks by 50%+.
Pull the order details: products, shipping address, customer email/phone
Check tracking: was the order delivered? When?
Check CS history: did the customer message us before this dispute?
Pull communications: any threatening language or red flags?
Hour 24-48: Decide whether to fight or settle.
Strong evidence (delivered, customer didn't reach out, no defects reported): Fight. Stripe gives 7-21 days to submit evidence. Win rate ~50% for AU dropshippers with good documentation.
Weak evidence (delayed delivery, customer complained, product issue): Settle. Refund the customer voluntarily and accept the chargeback. Stripe still records the chargeback but you avoid escalation.
The math: a fought chargeback costs A
5-25 in fees regardless of outcome. A lost chargeback costs A$30-50 in fees. The decision is mainly about chargeback ratio impact, not money.
The dispute submission template
When fighting a chargeback in Stripe:
Customer order details (date, products, total, shipping address)
Tracking proof (link, delivery confirmation)
Communications history (no contact from customer before chargeback)
Product description match (screenshot of product page)
Refund policy (link to your policy on store)
Any positive engagement (review left, repeat purchase, etc.)
Stripe's dispute submission form has structured fields. Provide 6-10 pieces of evidence per dispute. AU dropshippers winning 50%+ of disputes typically submit thorough evidence within 48 hours.