Refunds and disputes

Two ways money flows back to a client: refunds (you initiate) and disputes (the client's card issuer initiates a chargeback). They're handled differently. This page covers both.

Refunds

A refund is when you, the contractor, decide to return some or all of a payment to your client.

When to use a refund

The client paid an invoice you later realized was wrong (overbilled hours, wrong rate, duplicate charge).
The client cancelled the project after paying a deposit and you agreed to return it.
You're issuing a goodwill credit for something that went wrong.

How to issue a refund

Open the client from your client list.
Go to their Invoices tab and find the invoice you're refunding.
Click Issue Refund on that invoice's card.
Enter the amount. It starts filled in with everything still refundable, so leave it alone for a full refund or type a smaller number for a partial one.
Add an optional reason. It's for your records and isn't sent to the client.
Click Confirm Refund.

The Issue Refund button only shows on an invoice the client has actually paid, and only while there's still money left to give back. Refund the full amount and the button disappears from that card.

The refund settles back to the client's original payment method (their card or bank) in 5–10 business days for cards, 7–10 for bank payments.

What the client sees

The client gets a notification in their portal titled "Refund of $X issued", which opens their Billing / Pay page. There they'll see:

The refund listed on the Refunds tab.
Total Paid drop by the refunded amount, with a line underneath splitting out what they paid and what came back.

Depending on the receipt settings in your Stripe account, Stripe may also email them its own refund notice.

Partial refunds

You can refund less than the full invoice amount. The invoice card in the client's Invoices tab shows the invoice amount, what was paid, and what's been refunded, so you can always see where a partly-refunded invoice stands.

You can issue multiple partial refunds against the same invoice as long as the total doesn't exceed what was paid.

Refunding a deposit invoice

If you're refunding a deposit because the client cancelled the project, also consider:

Voiding the balance draft invoice (if billing mode was deposit+draft).
Marking the project as cancelled/completed in the client's workspace.

The portal doesn't automatically do these — you decide what to do based on the cancellation circumstances.

Disputes (chargebacks)

A dispute is when a client's card issuer pulls money back from your account because the client reported the charge as unauthorized, didn't recognize it, or claims they didn't receive what they paid for.

What triggers a dispute

Client contacted their bank/card issuer claiming the charge was fraudulent.
Client disputes the quality of service ("never received what I paid for").
The card holder didn't actually authorize the charge (real fraud).

Disputes are out of your control to initiate or prevent — they come from the issuer side.

What happens when a dispute fires

Stripe receives the dispute notification from the card network.
Stripe holds the disputed amount + a fixed dispute fee from your balance.
Stripe tells the portal a charge was disputed.
The portal sends you a notification: Payment dispute opened, with the amount, the client, and the reason, and a reminder to respond in your Stripe dashboard before the evidence deadline. There is no badge added to the original invoice, and the notification does not link straight to the dispute in Stripe.

How to respond

You typically have 7–21 days to submit evidence to Stripe. Open your Stripe dashboard and find the dispute there, where you can:

Upload the signed contract, signed quote, project deliverables, communication history with the client, etc.
Submit a written response explaining the charge was valid.

Stripe forwards your evidence to the card network. The card network rules in 60–75 days. If they side with you, the funds are returned. If they side with the client, you lose the funds + the dispute fee permanently.

Dispute prevention

Always use the built-in signing flow or Docusign for contracts — a signed agreement is the strongest piece of evidence in a dispute.
Keep work logs — time tracking sessions with notes show the work was performed.
Use clear invoice descriptions so the charge is recognizable on the client's statement.
Respond fast to client complaints before they escalate to a dispute.

Where dispute records live

When a client disputes a charge, the portal notifies you so you know to act, and the full dispute lives in your Stripe dashboard. Respond to it there. For your own records, the original invoice stays in the client's workspace.

Refund vs dispute — quick decision

If the client is asking you for their money back: refund. Issue it from the portal. Cheaper, fewer fees, no time pressure.

If the card issuer has already pulled the money: dispute. You can't refund retroactively — the dispute supersedes your refund options.

Don't refund a charge that's already been disputed — it creates an accounting mess. Wait for the dispute to resolve.