Skip to content
Create account
or
Sign in
The Stripe Docs logo
/
Ask AI
Create account
Sign in
Get started
Payments
Finance automation
Platforms and marketplaces
Money management
Developer tools
Get started
Payments
Finance automation
Get started
Payments
Finance automation
Platforms and marketplaces
Money management
Overview
Billing
Tax
Reporting
    Overview
    Select a report
    Filters and settings
    Categories and types
    Connect an accounting tool
    Reports API
    Reports for multiple accounts
    Revenue recognition
      Get started
      How Revenue Recognition works
        Subscriptions and Invoicing
        One-time payments
        Refunds and disputes
      Data freshness
      Pricing
      Multi-currency
      Connect platforms
      Revenue Recognition for Usage-Based Billing
      Revenue contracts
      Reports
      Overrides
      Audit your numbers
      Examples
      Revenue recognition rules
      Revenue Recognition settings
      Map to your chart of accounts
      Performance obligations API
      Import data to Stripe
      Export data from Stripe
    Bank reconciliation
Data
Startup incorporation
HomeFinance automationReportingRevenue recognitionHow Revenue Recognition works

Revenue Recognition with refunds and disputes

Understand how refunds and disputes impact your revenue.

Copy page

Refunds and disputes can happen to any transaction on Stripe, which affects your revenue numbers.

Handling a refund or dispute

Stripe handles refunds and disputes in a similar manner, but the contra revenue generated go to the refunds and disputes accounts respectively.

When a refund or dispute is made,

  • Cash is returned to the customer.
  • Prior recognized revenue is offset by contra revenue in the refund or dispute account.
  • Deferred revenue that hasn’t been recognized is cleared.

This next example is a one-time payment refund.

  • On January 1, a customer made a one-time payment for 90 USD.
  • On February 1, the transaction was refunded.

In this situation, the full amount of 90 USD is recognized as revenue, and subsequently the full amount of 90 USD is added to the refunds contra revenue account.

AccountJanFeb
Revenue+90.00
Refunds+90.00

In this example, the invoice for a subscription was disputed.

  • On January 1, a customer starts a three month subscription for 90 USD, which generates and finalizes an invoice.
  • The customer pays 90 USD.
  • On February 1, the customer disputes the transaction.

In this case, the customer received 31 days worth of service, so 31 USD is placed in the disputes account. The dispute also reduces the cash by 90 USD, and the remaining 59 USD of deferred revenue is cleared. At the end of February, the account balances looks like the following:

AccountJanFeb
Revenue+31.00
DeferredRevenue+59.00-59.00
Cash+90.00-90.00
Disputes+31.00

Winning a dispute

Disputes are different from refunds in one way—you can win disputes.

When you win a dispute,

  • Cash is returned to you.
  • Recognized and deferred revenue don’t change.
  • Cash is offset by an increase in the recoverables account.

In the previous example, assume that you win the dispute on March 1. If you then looked at the account balances at the end of March, you’d see that cash increased by 90 USD, which is offset by recoverables.

AccountJanFebMar
Revenue+31.00
DeferredRevenue+59.00-59.00
Cash+90.00-90.00+90.00
Disputes+31.00
Recoverables+90.00
Was this page helpful?
YesNo
Need help? Contact Support.
Join our early access program.
Check out our changelog.
Questions? Contact Sales.
LLM? Read llms.txt.
Powered by Markdoc