How to Protect Your Business from Chargeback Scams

A Must-Read for Small Business Owners Using Stripe or Online Payments

If you're running a business that accepts credit cards, you're at risk for one of the most frustrating forms of modern theft: the chargeback scam.

At MEAN Advertising, we work with dozens of business owners who’ve asked, “Can someone just cancel their payment after I deliver the service?”
The answer is yes — but only if you’re unprotected.

Let’s break down exactly what a chargeback scam is, why it happens, and how to defend yourself with smart systems, policies, and tools — including Stripe’s built-in protection.

🕵️ What Is a Chargeback Scam?

A chargeback occurs when a customer contacts their bank or credit card company and disputes a charge. That bank then pulls the money back out of your account — no questions asked — while they “investigate.”

In a scam scenario, the buyer:

• Makes a legitimate purchase

• Receives the product or service

• Then claims they didn’t authorize the charge or never received it

If you can’t provide sufficient proof, the bank refunds the customer and you lose not only the payment — but also any service or product you delivered. Stripe will also charge you a dispute fee, and too many chargebacks can put your account at risk.

🚨 Who's at Risk?

Chargeback scams can hit anyone, but especially:

• Online coaches and consultants

• E-commerce shops without tracking

• Freelancers and service providers

• Businesses delivering intangible products (like digital downloads, PDFs, or access)

If your service can’t be boxed up and tracked with UPS, you need to protect yourself.

🛡️ How to Protect Your Business from Chargebacks

Here are the steps MEAN recommends for every business — especially those using Stripe, Square, or any card processor.

1. Write a Clear Refund and Cancellation Policy

If your client disputes the charge, Stripe will ask for your terms and conditions. If you don’t have any, you’re automatically less protected.

✅ Include:

• How long customers have to request a refund

• What services are non-refundable

• A cancellation process (and deadline)

💡 Pro Tip: Add a checkbox on your checkout page that says “I agree to the terms and refund policy” with a link.

2. Document Delivery or Service Completion

If you ship products, always:

• Use trackable shipping

• Require delivery confirmation

For services, keep:

• Emails confirming the work was completed

• Screenshots of project progress or results

• IP address, login timestamps, and email opens

Don’t assume “they said thanks” is enough. Keep a paper trail — even for happy clients.

3. Use Stripe Radar and 3D Secure

Stripe has powerful fraud-prevention tools. Turn on:

• Radar rules to block high-risk or suspicious payments

• 3D Secure (extra ID verification)

• AVS (Address Verification) and CVV checks

These give you added evidence in case of a dispute — and sometimes prevent the fraud before it happens.

4. Be Proactive with Communication

Clients are less likely to dispute if they:

• Know what to expect

• Get clear receipts and onboarding emails

• Feel like they can reach you with questions

Chargeback scammers prey on businesses that disappear after the charge. Don’t be one of them.

5. Respond Fast to Disputes

If a chargeback happens, Stripe will notify you.

🕒 You have 7 to 21 days to respond — and you MUST provide evidence.

Include:

• Order details and invoice

• Screenshots of delivery or login

• Signed contracts or checkboxes

• Your refund policy and terms of service

Winning is possible — but only with solid documentation.

🧩 Bonus Protection: Use a Service Agreement

For large projects or higher-priced packages, consider having customers sign a short agreement stating:

“I understand this service is non-refundable after delivery, and I agree not to initiate a chargeback without first contacting [Your Business].”

It adds a layer of defense — and shows intent.

🎯 Final Thoughts from the MEAN Team

Chargebacks aren’t just annoying — they’re expensive. But with the right tools and strategy, you can stop scammers in their tracks and keep your payments protected.

Need help setting this up?
We can help write your refund policy, optimize Stripe, or even create an automation that documents customer interactions automatically.

Because at MEAN, we don’t just build ads.
We build smart systems that protect your revenue.