What an early fraud warning is
An early fraud warning (EFW) tells you a card issuer has reported a payment as fraud. The reports come from issuers on the Visa, Mastercard and JCB networks: Visa calls them TC40 reports, Mastercard calls them SAFE reports. Stripe shows them on the payment and through Radar.
A warning isn't a dispute. Nothing has been taken from your balance, and you don't have to respond. It's a signal that a fraud dispute may follow. (Stripe docs)
How often it becomes a dispute
Stripe says that if you don't refund, about 40% of Visa and Mastercard early fraud warnings become fraud disputes. The rate varies by network and amount.
Two details catch people out:
- A warning can arrive after the dispute it relates to, because the networks run fraud reports and disputes on separate systems.
- A payment protected by 3D Secure (liability shift) can still get a dispute. Stripe then adds the 3D Secure data as evidence for you.
Refund or wait?
Refunding before a dispute is opened avoids the dispute and its fee. But refunding every warning means refunding many payments that would never have been disputed.
Stripe's own analysis gives a simple rule: refunding makes sense when the payment is about the same as your dispute fee or less, and it's likely not worthwhile when the payment is more than 35% above it. With the $15 US dispute fee, that's payments up to about $20. (Stripe docs)
| Payment | Usually |
|---|---|
| Up to about $20 | Refund: the dispute fee alone would cost about as much as the payment |
| Larger, and you have evidence of real use | Keep it, and get your evidence ready in case a dispute follows |
| Larger, and it looks like real fraud (no use, new account, unusual location) | Refund, and block the card or customer in Radar |
Refund more readily, at any amount, if your dispute rate is already close to the levels where card networks act, since every new dispute counts.
A refund doesn't remove the fraud report
A refund prevents the dispute, but the fraud report stays on your record. The only exception is a reversal, which usually has to happen within about 2 hours of the payment being captured.
That matters for Visa. Its dispute monitoring program, VAMP, counts disputes plus fraud reports against your number of payments. Above 1.5% (with at least 1,500 disputes and reports in a month), a business is flagged as excessive. So for Visa, early fraud warnings count against you even when you refund and no dispute follows. Check your ratio with the free dispute-rate calculator.
If it's a subscription
A fraud report on a subscription payment usually means the next renewal will be disputed too. Cancel the subscription, or at least stop it renewing, before the next charge. Otherwise one warning can turn into several disputes.
If a fraud dispute follows
For software, courses and memberships, the strongest answer to "I didn't make this purchase" is the customer using what they bought: logins, lessons completed and downloads after the payment, ideally from the same IP address or device as checkout. Visa's Compelling Evidence 3.0 can shift liability back to you when earlier, undisputed payments match the disputed one.
What to send: Stripe "Fraudulent" disputes, the Stripe dispute evidence guide, and what Stripe chargebacks cost.
How Flatfight helps
When a fraud dispute arrives, Flatfight imports it, adds evidence Stripe can't see, such as product logins and usage from PostHog, Segment, Teachable or Thinkific, and scores the case so you know whether it's worth Stripe's counter fee. You approve every submission. It costs $9 per won dispute ($19 from $100), or a flat monthly price. Never a percentage of what you win.