Bumpa uses Stripe to handle website transactions made in USD, GBP, or CAD.

Because these payments are processed through Stripe, all payment disputes, commonly known as chargebacks, are subject to Stripe's specific regulations. This guide is designed to help you navigate how these disputes function and their impact on your store.

Recently, Stripe modified its chargeback fee policy. It is crucial to understand these updates, as they change the costs associated with payment disputes and highlight how you can minimise potential expenses.

What is a chargeback?

A chargeback occurs when a customer contacts their bank to reverse a payment instead of resolving the issue directly with you. 

Once this happens:

• The money is taken back temporarily

• A dispute is opened

• You will be mandated to provide comprehensive evidence

Common reasons include:

• Item not received by the shopper

• Wrong or damaged product delivered

• The customer does not recognise the transaction

How Stripe Chargeback Fees Work 

Previously, you only had to pay a fee if you lost a dispute. 

However, under the new structure, Stripe now charges fees in two stages:

The new two-tier fee structure

1. When a dispute is filed

As soon as the customer raises a dispute:

• A $15 fee is automatically charged

• This fee applies regardless of the outcome (win or lose)

2. If you counter the dispute

• If you win:

  • You recover the transaction amount and

  • The $15 fee is not refunded

• If you lose:

  • You are charged an additional $15 fee

  • Total dispute-related fees = $30 (i.e., you pay the first dispute fee of $15 and also an additional fee of $15 for losing the dispute, totalling $30)

Note on currency differences

Sometimes, the final disputed amount may differ slightly from the original transaction amount.

This usually happens when:

• The customer’s card is in a different currency

• Exchange rates change during the dispute period

Since disputes can take time to resolve, the final amount is calculated using the exchange rate at the time of resolution, not when the dispute was first filed.

This means the amount returned or deducted may be slightly higher or lower.

Example: contesting a low-value transaction

In this example, contesting a $10 dispute costs $30 in fees alone, which is three times the transaction value:

What this means for your business

• Not all disputes are worth contesting.

• For lower-value transactions, you may spend more on fees than the amount you’re trying to recover.

• Before contesting, always weigh the transaction amount against the realistic risk of losing.

How to Avoid Chargebacks

The best way to deal with chargebacks is to prevent them early.

1. Refund early when needed

If you pay close attention, some customers show signs of dissatisfaction. This can come through their messages, complaints, repeated questions, refund requests, or even threats to dispute a charge.

Once this is clear, act quickly. Contact Bumpa Support immediately to process a refund.

Issuing a refund before the customer escalates to their bank helps you avoid the $15 dispute fee and reduces your overall loss.
Please note that the 7% transaction fee will not be included in your refund. This fee covers payment processing, which has already taken place. The refunded amount will be deducted from your pending settlement.

2. Keep proper records

Always keep complete and accurate records for every transaction. This should include:

• Proof of delivery:  clear confirmation that the customer received the item, including their details

• Customer communication: emails, chats, and any agreements or confirmations

• Full order details and receipts from your Bumpa store

You can also ask customers to confirm delivery or upload proof once the order is fulfilled.

*Having strong records improves your chances of winning a dispute.

3. Communicate clearly

Clear communication helps prevent misunderstandings and reduces disputes.

Make sure you:

• Clearly state delivery timelines on your storefront and social media pages

• Display refund and return policies at checkout

• Send order confirmations and delivery updates

Always respond to customer complaints within 24 hours and resolve issues early, as most chargebacks start from ignored or delayed responses.

4. Provide clear and accurate product descriptions

Many disputes occur because the product does not match the customer's expectations.

Make sure your product listings clearly describe:

• Size and measurements

• Fabric or material type (e.g. cotton, silk, polyester)

• Texture, colour, and fit

• What the customer should expect to receive

Avoid vague descriptions. The more specific and accurate your product details are, the lower the chance of complaints or disputes.

5. Add terms and conditions at checkout

Set clear expectations before the customer completes their order.

Use the Bumpa checkout note to include important terms such as:

• Refund and return policy

• Delivery timelines

• Any conditions that customers should agree to before payment

This ensures customers are informed at the point of purchase and helps protect you in case of disputes. 

6. Watch for high-risk or suspicious orders

Some chargebacks are actual fraud (not just unhappy customers).

Be cautious of:

• Very large or unusual orders

• Rush delivery requests

• Mismatched customer details (e.g. name vs location)

Note: If something feels off, verify before fulfilling the order.