If you've ever lost a dispute and thought, “Why did Stripe side with the customer?” — you’re not alone.
But here’s the thing: Stripe might not have made that decision at all.
In fact, most payment processors don’t have the final say in chargeback outcomes. Forums are filled with frustrated merchants trying to understand who really makes the call. So let’s break it down — who’s deciding your chargeback fate, and how does the process actually work?
What Happens After a Chargeback is Filed?
When a cardholder files a chargeback, your processor (like Stripe, PayPal, Square, etc.) is notified by the customer’s issuing bank. That bank is the one that issued the card used in the transaction.
Stripe will then alert you and give you a chance to respond with evidence — receipts, shipping confirmation, customer communication, refund policies, and so on. This part of the process is called representment.
After you submit your documents, Stripe packages your evidence and passes it back to the cardholder’s bank.
And here’s where things get misunderstood: Stripe doesn’t decide if you win. The issuing bank does.
So, the Issuing Bank Makes the Decision?
Yes, in the first round of a chargeback, the customer’s bank usually decides the outcome. That bank evaluates the claim and your evidence, and then either upholds the chargeback or reverses it.
They’re judging whether your evidence disproves the cardholder’s claim. If they think your documents are lacking, irrelevant, or unclear, they’ll rule in favor of their own customer.
And let’s be honest — banks are more likely to side with their cardholders unless your evidence is airtight. They're motivated to protect their customers and avoid liability under consumer protection rules.
What About Visa and Mastercard?
The plot thickens when you escalate the dispute.
If you lose the first round and want to keep fighting, some processors let you push the chargeback into pre-arbitration or arbitration, depending on the card network (Visa or Mastercard). At this stage, the decision leaves the hands of the issuing bank and moves to the card network itself.
Here’s how that works:
- Pre-arbitration (Mastercard and sometimes Visa): This is a last-ditch attempt to resolve the dispute without involving the card network as the judge. You either accept liability or provide new evidence.
- Arbitration: If both sides dig in, the case goes to Visa or Mastercard. They’ll evaluate the evidence from both the merchant and the bank, and they’ll make the final decision.
This is the point where your processor has even less control. In fact, processors like Stripe are just middlemen by this stage. They’re passing information back and forth, but the card network has the final word.
And if the card network rules against you, you’ll also get hit with a steep arbitration fee, often several hundred dollars, win or lose.
Why Merchants Still Blame Stripe
It’s easy to assume Stripe is making these decisions because they're the ones delivering the bad news. But they’re just the messenger.
What Stripe does control is how well your evidence is formatted and submitted. Some processors auto-generate evidence from their systems — others require you to upload it manually. Either way, the outcome is decided by someone else entirely.
That said, if Stripe delays forwarding your response or misses a deadline, you could lose the dispute by default. So while they don’t control the verdict, they can affect your chances.
Can You Ever Appeal a Bad Decision?
Sort of, but it’s limited.
If you lose a chargeback, you might be able to push it into arbitration (if your processor allows it). But if the card network has already made a final decision, there’s no true appeal process. Unlike in court, there’s no higher level you can escalate to.
That’s why it’s so important to respond thoroughly the first time. Once you’re past that point, you’re usually stuck with the outcome, whether it feels fair or not.
Final Thoughts: Who Holds the Power?
Let’s recap. The parties who decide your chargeback outcome are:
- The cardholder’s bank, in the first stage.
- Visa or Mastercard, if the dispute goes to arbitration.
- You, in how well you respond, and whether you escalate.
Stripe and other processors are not the judge or jury. They’re more like the courtroom clerks — sending paperwork, meeting deadlines, and updating you along the way.
Knowing this can help you focus your energy in the right place. If you want to win more disputes, your best shot is building strong, clear evidence, not hoping Stripe changes its mind.
If Chargebacks Feel Out of Your Hands, You’re Not Alone
Chargebacks are confusing, time-consuming, and often unfair. Chargeblast helps merchants make sense of the process, respond the right way, and prevent the next one before it even happens. Whether you’re tired of losing to vague claims or just want to automate the mess, we’re here to help.
Let’s stop letting banks call all the shots. Get in touch with us and take back control.
