Chargebacks are one of the most frustrating challenges facing online merchants today. As a Stripe merchant, you’ve likely encountered the dreaded notification that a customer has disputed a transaction, leaving you to deal with lost revenue, fees, and administrative headaches. That’s where Stripe’s Chargeback Protection comes in – but is it really the comprehensive solution your business needs?
What is Stripe Chargeback Protection?
Stripe Chargeback Protection is a service designed to shield merchants from the financial impact of fraudulent chargebacks. When you opt into this protection, Stripe automatically reimburses you for qualifying disputed transactions, covering both the transaction amount and associated fees.
Here’s how it works: When a customer initiates a chargeback on a protected transaction, Stripe’s system evaluates whether the dispute qualifies for protection. If it does, you receive automatic reimbursement without having to fight the chargeback or provide evidence. The protection is designed to handle what Stripe considers “fraudulent” disputes – essentially cases where a legitimate cardholder’s payment information was used without their consent.
Key Takeaways
- Limited Coverage: Stripe’s protection only covers fraud disputes, not “product not received” or “not as described” chargebacks.
- No Fighting: Stripe reimburses but doesn’t contest disputes, missing opportunities to recover funds and improve your chargeback ratio.
- Stripe-Only: Protection is exclusive to Stripe merchants, creating vendor lock-in and limiting payment processor flexibility.
- Annual Limits: $25,000 yearly cap means growing businesses can quickly exhaust their protection.
- Performance-Based Alternative: Justt offers comprehensive chargeback management across all PSPs with 70%+ win rates and pay-only-when-we-win pricing.
Current Pricing and Coverage (2025)
According to Stripe’s official terms, Chargeback Protection costs 0.4% per eligible transaction, added on top of standard processing fees. This fee applies to all qualifying transactions, regardless of whether a chargeback occurs.
The service includes a $25,000 annual reimbursement cap per merchant account (or €20,000 in Europe). This cap includes both the value of disputed transactions and any associated waived dispute fees. Stripe also notes that these limits may change at their discretion, so it’s important to review the latest terms regularly.
The Hidden Limitations of Stripe Chargeback Protection
While Stripe’s protection might seem comprehensive at first glance, it comes with significant limitations that many merchants discover too late:
It Doesn’t Fight Chargebacks
Perhaps the most critical limitation is that Stripe’s protection excludes disputes categorized as “product not received” or “not as described”. This means it only covers a narrow subset of fraud-related chargebacks. If a customer claims they never received their order or that the product wasn’t as described, you’re on your own.
Limited Fraud Coverage
The protection doesn’t apply to all fraud cases. Post-3D Secure disputes and many other legitimate fraud scenarios fall outside the coverage scope. Additionally, it doesn’t cover recurring payments, which can be a significant gap for SaaS and subscription businesses.
Stripe-Only Restriction
The protection is exclusively available to merchants processing through Stripe. If you use multiple payment processors or want to switch providers, you lose this protection entirely. This creates vendor lock-in that can limit your business flexibility.
No Dispute Resolution Expertise
Stripe’s system may not counter every dispute and lacks access to external data like CRM records or customer communications. When disputes fall outside the protection scope, you’re left to handle them yourself without specialized chargeback management tools or expertise.
Annual Limits Can Be Restrictive
The $25,000 annual limit might seem generous, but for growing businesses or those in high-risk industries, this cap can be reached quickly. Once you hit the limit, you’re fully exposed to chargeback costs for the remainder of the year.
Stripe vs. Justt: A Comprehensive Comparison
| Feature | Stripe Chargeback Protection | Justt Chargeback Automation |
|---|---|---|
| Coverage Scope | Fraud disputes only (narrow subset) | All chargeback types including friendly fraud, product disputes, and authorization issues |
| Dispute Handling | Automatic reimbursement (no fighting) | AI-powered dispute resolution with evidence compilation and submission |
| Success Rate | N/A (doesn’t fight disputes) | 70%+ win rate across all dispute types |
| PSP Compatibility | Stripe only | Works with 70+ payment processors including Stripe, PayPal, Adyen, Square, and more |
| Annual Limits | $25,000 limit | No coverage limits |
| Pricing Model | 0.4% per transaction (all transactions) | Performance-based: pay only when we win |
| Data Integration | Limited to Stripe data | Integrates with CRM, support systems, shipping providers, and more |
| Recurring Payments | Not covered | Fully covered |
| Post-3D Secure | Not covered | Fully covered |
| Real-time Alerts | Basic dispute notifications | Advanced alerts with risk scoring and prevention insights |
| Reporting & Analytics | Basic Stripe dashboard | Comprehensive chargeback analytics and trend analysis |
Why Justt is the Superior Chargeback Management Solution
While Stripe’s protection offers peace of mind for a narrow category of disputes, Justt provides a comprehensive chargeback management platform that addresses the full spectrum of dispute challenges facing modern merchants.
AI-Powered Dispute Resolution
Unlike Stripe’s passive reimbursement approach, Justt actively fights every chargeback using advanced AI algorithms. Our system analyzes hundreds of data points to build compelling evidence packages, resulting in a 70%+ win rate across all dispute types.
True PSP-Agnostic Flexibility
Justt works seamlessly with over 70 payment processors, giving you the freedom to choose the best payment solution for your business without sacrificing chargeback protection. Whether you’re using Stripe, PayPal, Adyen, or any other processor, Justt has you covered.
Comprehensive Coverage
From friendly fraud to complex authorization disputes, Justt handles every type of chargeback. Our platform covers what Stripe doesn’t even attempt to protect against, including product disputes, subscription chargebacks, and post-authentication fraud.
Performance-Based Pricing
Unlike Stripe’s upfront transaction fees, Justt operates on a performance-based model. You only pay when we successfully win a dispute, aligning our success with your ROI. This approach often results in lower overall costs while delivering superior protection.
Advanced Prevention Tools
Beyond fighting existing chargebacks, Justt provides advanced prevention tools including real-time risk scoring, customizable rules engines, and detailed analytics to help you reduce chargeback rates at the source.
Making the Right Choice for Your Business
For merchants serious about comprehensive chargeback protection, relying solely on Stripe’s limited coverage isn’t enough. While Stripe’s protection can serve as a basic safety net for fraud-related disputes, it leaves significant gaps that can cost your business thousands in unprotected chargebacks.
Justt’s comprehensive platform fills these gaps, providing:
- Active dispute resolution for all chargeback types
- Cross-platform compatibility with any payment processor
- Advanced AI-driven evidence compilation
- No annual limits or coverage restrictions
- Performance-based pricing that aligns with your success
The choice between passive reimbursement and active dispute resolution is clear. Modern merchants need a solution that fights for every dollar, not just covers a fraction of potential losses.
Take Action Today
Don’t let limited chargeback protection hold your business back. Using Stripe? Justt can recover what Stripe doesn’t even try to fight.
Book a free consultation to see how Justt can protect your revenue and reduce chargeback costs across all your payment processors.
FAQs
Does Stripe Chargeback Protection work with other payment processors?
No, Stripe Chargeback Protection is exclusively available to merchants processing payments through Stripe. If you use multiple payment processors or switch to a different provider, you lose this protection entirely. This creates vendor lock-in that can limit your business flexibility. In contrast, Justt works with over 70 payment processors, giving you the freedom to choose the best payment solution for your business needs.
What types of chargebacks does Stripe’s protection actually cover?
Stripe’s protection has a narrow focus, covering only disputes categorized as “fraudulent” – essentially cases where a legitimate cardholder’s payment information was used without their consent. It explicitly excludes “product not received,” “not as described,” recurring payment disputes, and post-3D Secure authentication fraud. This means the majority of chargebacks that merchants face aren’t covered by Stripe’s protection.
Is it worth paying 0.4% per transaction for Stripe’s chargeback protection?
The value depends on your chargeback rate and dispute types. Since Stripe charges 0.4% on all transactions (not just disputed ones) and has a $25,000 annual limit, the cost can quickly add up. For many merchants, the limited coverage scope makes this pricing inefficient. Justt’s performance-based model means you only pay when we successfully win disputes, often resulting in lower overall costs while providing comprehensive protection across all chargeback types.
Understanding chargebacks and implementing effective protection strategies is crucial for maintaining healthy payment processing relationships and protecting your bottom line. With the right partner, you can turn chargeback management from a cost center into a competitive advantage.
