Substack is integrated with Stripe through "connect" accounts, which means that individual publishers are the merchant of record responsible for refunds and chargebacks. Substack is set up so writers own their payment relationships, in addition to owning your intellectual property and mailing list. This gives you control and freedom to build your business on your own terms and leave Substack at any time if you choose.
If a paid subscriber disputes their monthly, annual, or founding member subscription charge with their card issuer i.e. a chargeback, this means that the subscriber is questioning the validity of that payment to a writer. There are many reasons why this may have happened, such as not recognizing the charge on their statement or wanting to cancel their subscription.
Disputes typically follow a standard pattern shown here:
See more on how disputes work on Stripe.
What happens if a paid subscriber initiates a chargeback?
If a paid subscriber initiates a chargeback, Substack will notify you, the publisher, via email with the following:
- If you agree with the dispute: If you believe the customer’s claim is valid, the most efficient course of action is to accept the dispute directly through Stripe. This will close the case promptly and avoid any further administrative steps.
- If you disagree with the dispute and have evidence: If you have strong supporting documentation, such as email correspondence with the customer, service or usage logs, signed contracts, or any relevant proof, please submit this evidence through Stripe. Well-organized, persuasive documentation can make a significant difference in the resolution of the dispute.
- If you disagree but lack sufficient evidence: If you believe the dispute is unjustified but do not have meaningful documentation, or you’re unsure how to respond effectively, you don’t need to take any action. Our team will evaluate the case and, if we believe there’s a viable path to contesting the dispute, we will submit a response on your behalf.
Important: In the near future, Stripe will begin to charge a dispute counter fee. If you win the dispute, Stripe returns the disputed fee to you. Substack is unable to cover dispute charges because individual publishers are considered the merchant of record in our current integration.
You can read more about how chargebacks work on Stripe's website.
What happens after evidence is submitted?
After we submit evidence to Stripe, the card issuer will review it and decide with a final decision. Stripe updates the status of the dispute to won or lost and will notify you through the Stripe Dashboard and email as soon as the issuer makes its decision clear.
Per Stripe, “This outcome is final for all parties. You can’t overturn a lost dispute, but your customer also can’t overturn a dispute decided in your favor.”
Ultimately, the cardholder's bank (not Stripe) will review and decide the dispute outcome. This can take up to 3 months.
How can I prevent disputes?
Here are a few things in place to prevent and mitigate chargeback disputes altogether:
- We have a tight service level agreement for refunds. Many refund requests, that meet the refund policy requirements, are automated, so subscribers typically receive service within 24 hours of their request.
- Subscribers can follow these steps to cancel their subscriptions instead of initiating a chargeback. Instructions for readers on how to manage and change their subscription themselves are included in every payment receipt email that a reader receives when they purchase a subscription.
- We have system level fraud prevention mechanisms in place to prevent charges that might end up becoming chargeback disputes.
- As a connect customer with Stripe, you can enable Radar for an extra two cents per transaction, which provides extra protection against fraudulent charges.