# Stripe disputes in NetSuite

Learn about how NetSuite automatically represents Stripe disputes or chargebacks.

The Stripe Connector for NetSuite automatically creates a corresponding object in NetSuite for disputes (or chargebacks) immediately after they occur in Stripe. Depending on your payment flow, the disputes might appear differently.

## How it works

When a customer [disputes](https://docs.stripe.com/disputes.md) a charge, the dispute process occurs as follows:

1. Stripe charges you a processing fee for the dispute and withdraws the full amount of the charge from your Stripe account balance.
1. You respond to the dispute with evidence, which Stripe sends to the bank for evaluation and determination of the dispute outcome.
1. The connector records the dispute fee as a cash-back line item. By default, the dispute fee posts to the same account as your credit card processing fees. You can customize where to post fees by going to **Settings** > **Accounts mapping** > **Dispute fees** in the Stripe app.
1. The connector creates a customer refund and records the fee on the bank deposit.
1. If you applied the customer payment to a NetSuite invoice, the connector also creates a credit memo against the invoice.
1. If you win the dispute, Stripe returns the dispute amount and fee to your Stripe balance.
1. The connector records the returned funds and fee reversal to the bank deposit.

## Dispute reversals

Winning a dispute (or receiving a chargeback reversal) occurs when the bank grants a dispute in your favor. When you win a dispute, Stripe refunds the dispute fee and includes the full amount of the original charge in your next payout.

NetSuite represents this as follows:

- The fee refund appears as an **Other Deposit** line item on the next payout.
- The chargeback reversal appears as an **Other Deposit** line item and posts to your default income account. You can specify which account to post this line item to.

The connector makes sure to properly account for cash from dispute reversals, while allowing you to handle income, revenue recognition, and cash application using your own manual or automated process.

After you win a dispute, you can specify which account to return the disputed charge to. To do so, go to **Settings** > **Accounts mapping** > **Dispute reversals** in the Stripe app.

For example, you can configure the connector to post dispute reversal cash to accounts receivable instead of income. Then you can manually or automatically create journal entries or invoices to represent any income entries associated with the won chargebacks.

## Customize the dispute general ledger impact

To use the global dispute item `Stripe Dispute Item` on credit memos for disputes, ask your implementation partner to enable the **Global item for dispute credit memos** feature in your Stripe app settings. Consult with your implementation partner to understand all accounting and technical implications.

Credit memos are always created if the disputed payment is applied to an invoice. When creating a credit memo for a dispute, the connector includes the original items on the invoice, by default.

If you don’t want to use the original items on the invoice, you can use a `Stripe Dispute Item` instead. Use this approach if you want the dispute to post to a specific account, or you sell physical products and don’t want the dispute’s credit memo to affect NetSuite inventory levels.

The `Stripe Dispute Item` posts to your default income account. You can specify where to post dispute items and credit memos. To do so, edit the account of the item in NetSuite. You can also edit any other aspect of the item, and the connector won’t override those modifications.

## Handle mismatched amounts

The dispute amount might not match the original payment amount in the following cases:

- If the connector isn’t managing payment creation, calculation of the cash amount of the original payment might be incorrect. For example, you might have shipping and tax calculations that aren’t synced correctly from an external system, such as Shopify or Magento.
- If Stripe receives a dispute that’s greater than the original charge amount. For example, you have a [currency-converted payment](https://docs.stripe.com/payments/currencies/localize-prices.md) that’s disputed, but the amount you received is converted to the presentment currency.

If you have a mismatch between the amounts:

- For a single item on the original invoice, the connector adjusts the item to match the dispute amount.
- For multiple items on the original invoice, the connector can’t determine which items to adjust. Instead of using the original items on the invoice, the connector uses a global `Stripe Dispute Item` to represent the full dispute amount on the credit memo.

## Test disputes with the connector

To test disputes, use a [test card](https://docs.stripe.com/testing.md#disputes) to create a dispute in your Stripe test environment.

## See also

- [Deposit automation](https://docs.stripe.com/use-stripe-apps/netsuite/deposit-automation.md)
- [Stripe payouts in NetSuite](https://docs.stripe.com/use-stripe-apps/netsuite/stripe-payouts-netsuite.md)
- [Stripe refunds in NetSuite](https://docs.stripe.com/use-stripe-apps/netsuite/stripe-refunds-netsuite.md)